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  Title	RE/MAX HOLDINGS, INC. REPORTS FOURTH QUARTER 2024 RESULTS
  ID	7160626
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  Published Date	Feb. 20, 2025, 9:15 p.m.
  Summary	Unlock stock picks and a broker-level newsfeed that powers Wall Street. Upgrade Now RE/MAX HOLDINGS, INC. REPORTS FOURTH QUARTER 2024 RESULTS PR Newswire Thu, Feb 20, 2025, 4:15 PM 17 min read In This
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  Content ID	4490926
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  Content	Unlock stock picks and a broker-level newsfeed that powers Wall Street. Upgrade Now RE/MAX HOLDINGS, INC. REPORTS FOURTH QUARTER 2024 RESULTS PR Newswire Thu, Feb 20, 2025, 4:15 PM 17 min read In This Article: RMAX -11.03% Total Revenue of $72.5 Million , Adjusted EBITDA of $23.3 Million DENVER , Feb. 20 , 2025 /PRNewswire/ -- RE/MAX Holdings, Inc. (PRNewsfoto/RE/MAX Holdings, Inc.) Fourth Quarter 2024 Highlights (Compared to fourth quarter 2023 unless otherwise noted) Total Revenue decreased 5.4% to $72.5 million Revenue excluding the Marketing Funds 1 decreased 3.9% to $53.8 million , driven by negative 3.5% organic growth 2 and 0.4% adverse foreign currency movements Net income attributable to RE/MAX Holdings, Inc. of $5.8 million and earnings per diluted share (GAAP EPS) of $0.29 Adjusted EBITDA 3 increased 1.6% to $23.3 million , Adjusted EBITDA margin 3 of 32.2% and Adjusted earnings per diluted share (Adjusted EPS 3 ) of $0.30 Total agent count increased 1.2% to 146,627 agents U.S. and Canada combined agent count decreased 4.8% to 76,457 agents Total open Motto Mortgage franchises decreased 8.5% to 225 offices 4 Full-Year 2024 Highlights (Compared to full year 2023 unless otherwise noted) Total Revenue decreased 5.5% to $307.7 million Revenue excluding the Marketing Funds 1 decreased 5.4% to $228.7 million , driven by negative 5.2% organic growth 2 and adverse foreign currency movements of 0.2% Net income attributable to RE/MAX Holdings, Inc. of $7.1 million and earnings per diluted share (GAAP EPS) of $0.37 Adjusted EBITDA 3 increased 1.5% to $97.7 million , Adjusted EBITDA margin 3 of 31.8% and Adjusted earnings per diluted share (Adjusted EPS 3 ) of $1.30 Operating Statistics as of January 31, 2025 (Compared to January 31, 2024 , unless otherwise noted) Total agent count increased 1.5% to 145,626 agents U.S. and Canada combined agent count decreased 5.0% to 75,411 agents Total open Motto Mortgage franchises decreased 8.6% to 223 offices 4 RE/MAX Holdings, Inc. (the "Company" or "RE/MAX Holdings") (NYSE: RMAX), parent company of RE/MAX, one of the world's leading franchisors of real estate brokerage services, and Motto Mortgage ("Motto"), the first and only national mortgage brokerage franchise brand in the U.S., today announced operating results for the quarter and year ended December 31 , 2024. "Our continued focus on operational efficiencies contributed to higher-than-forecasted fourth-quarter profit and margin performance, a trend we have seen now for three quarters in a row," said Erik Carlson , RE/MAX Holdings Chief Executive Officer. "With a strengthened leadership team overseeing exciting new initiatives and revenue opportunities, we are entering 2025 with increasing momentum and remain centered on delivering the absolute best customer experience possible." Story Continues Fourth Quarter 2024 Operating Results Agent Count The following table compares agent count as of December 31, 2024 and 2023: As of December 31, Change 2024 2023 # % U.S. 51,286 55,131 (3,845) (7.0) Canada 25,171 25,168 3 0.0 Subtotal 76,457 80,299 (3,842) (4.8) Outside the U.S. & Canada 70,170 64,536 5,634 8.7 Total 146,627 144,835 1,792 1.2 Revenue RE/MAX Holdings generated revenue of $72.5 million in the fourth quarter of 2024, a decrease of $4.1 million , or 5.4%, compared to $76.6 million in the fourth quarter of 2023. Revenue excluding the Marketing Funds was $53.8 million in the fourth quarter of 2024, a decrease of $2.2 million , or 3.9%, versus the same period in 2023. The decrease in Revenue excluding the Marketing Funds was attributable to negative organic revenue growth of 3.5% and adverse foreign currency movements of 0.4%. Negative organic revenue growth was principally driven by a decrease in U.S. agent count and a reduction in revenue contribution from previous acquisitions (excluding independent region acquisitions). Recurring revenue streams, which consist of continuing franchise fees and annual dues, decreased $2.0 million , or 5.0%, compared to the fourth quarter of 2023 and accounted for 69.9% of Revenue excluding the Marketing Funds in the fourth quarter of 2024 compared to 70.7% of Revenue excluding the Marketing Funds in the prior-year period. Operating Expenses Total operating expenses were $68.2 million for the fourth quarter of 2024, a decrease of $18.1 million , or 21.0%, compared to $86.3 million in the fourth quarter of 2023. Fourth quarter 2024 total operating expenses decreased primarily due to lower settlement and impairment charges and lower selling, operating and administrative expenses. Fourth quarter 2024 settlement and impairment charges included an expense of approximately $5.5 million related to the proposed settlement of certain industry class-action lawsuits in Canada . Selling, operating and administrative expenses were $35.8 million in the fourth quarter of 2024, a decrease of $3.4 million , or 8.6%, compared to the fourth quarter of 2023 and represented 66.5% of Revenue excluding the Marketing Funds, compared to 69.9% in the prior-year period. Fourth quarter 2024 selling, operating and administrative expenses decreased primarily due to a decrease in bad debt and events-related expenses, partially offset by higher personnel costs. Net Income (Loss) and GAAP EPS Net income attributable to RE/MAX Holdings was $5.8 million for the fourth quarter of 2024 compared to net loss of ($10.9) million for the fourth quarter of 2023. Reported basic and diluted GAAP earnings per share were $0.31 and $0.29 , respectively, for the fourth quarter of 2024 compared to basic and diluted GAAP loss per share of ($0.60) each in the fourth quarter of 2023. Adjusted EBITDA and Adjusted EPS Adjusted EBITDA was $23.3 million for the fourth quarter of 2024, an increase of $0.4 million , or 1.6%, compared to the fourth quarter of 2023. Fourth quarter 2024 Adjusted EBITDA increased primarily due to a decrease in bad debt and events-related expenses, partially offset by a decrease in U.S. agent count. Adjusted EBITDA margin was 32.2% in the fourth quarter of 2024, compared to 30.0% in the fourth quarter of 2023. Adjusted basic and diluted EPS were $0.32 and $0.30 , respectively, for the fourth quarter of 2024 compared to Adjusted basic and diluted EPS of $0.30 each for the fourth quarter of 2023. The ownership structure used to calculate Adjusted basic and diluted EPS for the quarter ended December 31, 2024 , assumes RE/MAX Holdings owned 100% of RMCO, LLC ("RMCO"). The weighted average ownership RE/MAX Holdings had in RMCO was 60.1% for the quarter ended December 31, 2024 . Balance Sheet As of December 31, 2024 , the Company had cash and cash equivalents of $96.6 million , an increase of $14.0 million from December 31, 2023 . As of December 31, 2024 , the Company had $440.8 million of outstanding debt, net of an unamortized debt discount and issuance costs, compared to $444.6 million as of December 31, 2023 . Share Repurchases and Retirement As previously disclosed, 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 December 31, 2024 , the Company did not repurchase any shares. As of December 31, 2024, $62.5 million remained available under the share repurchase program. Outlook The Company's first quarter and full year 2025 Outlook assumes no further currency movements, acquisitions, or divestitures. For the first quarter of 2025, RE/MAX Holdings expects: Agent count to increase 1.0% to 2.0% over first quarter 2024; Revenue in a range of $71.0 million to $76.0 million (including revenue from the Marketing Funds in a range of $18.0 million to $20.0 million ); and Adjusted EBITDA in a range of $16.0 million to $18.5 million . For the full year 2025, the Company now expects: Agent count to change negative 1.0% to positive 1.0% over full year 2024; Revenue in a range of $290.0 million to $310.0 million (including revenue from the Marketing Funds in a range of $71.0 million to $75.0 million ); and Adjusted EBITDA in a range of $90.0 million to $100.0 million . Webcast and Conference Call The Company will host a conference call for interested parties on Friday, February 21, 2025 , beginning at 8:30 a.m. Eastern Time . Interested parties can register in advance for the conference call using the link below: https://registrations.events/direct/Q4I941153786 Interested parties also can access a live webcast through the Investor Relations section of the Company's website at http://investors.remaxholdings.com . Please dial-in or join the webcast 10 minutes before the start of the conference call. An archive of the webcast will be available on the Company's website for a limited time as well. Basis of Presentation Unless otherwise noted, the results presented in this press release are consolidated and exclude adjustments attributable to the non-controlling interest. Footnotes: 1 Revenue excluding the Marketing Funds is a non-GAAP measure of financial performance that differs from U.S. Generally Accepted Accounting Principles ("U.S. GAAP") and a reconciliation to the most directly comparable U.S. GAAP measure is as follows (in thousands): Three Months Ended Year Ended December 31, December 31, 2024 2023 2024 2023 Revenue excluding the Marketing Funds: Total revenue $ 72,467 $ 76,600 $ 307,685 $ 325,671 Less: Marketing Funds fees 18,652 20,589 78,983 83,861 Revenue excluding the Marketing Funds $ 53,815 $ 56,011 $ 228,702 $ 241,810 2 The Company defines organic revenue growth as revenue growth from continuing operations excluding (i) revenue from Marketing Funds, (ii) revenue from acquisitions, and (iii) the impact of foreign currency movements. The Company defines revenue from acquisitions as the revenue generated from the date of an acquisition to its first anniversary (excluding Marketing Funds revenue related to acquisitions where applicable). 3 Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EPS are non-GAAP measures. These terms are defined at the end of this release. Please see Tables 5 and 6 appearing later in this release for reconciliations of these non-GAAP measures to the most directly comparable GAAP measures. 4 Total open Motto Mortgage franchises includes only "bricks and mortar" offices with a unique physical address with rights granted by a full franchise agreement with Motto Franchising, LLC and excludes any "virtual" offices or Branchise SM offices. About RE/MAX Holdings, Inc. RE/MAX Holdings, Inc. (NYSE: RMAX) is one of the world's leading franchisors in the real estate industry, franchising real estate brokerages globally under the RE/MAX ® brand, and mortgage brokerages within the U.S. under the Motto ® Mortgage brand. RE/MAX was founded in 1973 by Dave and Gail Liniger , with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. Now with more than 145,000 agents in nearly 9,000 offices and a presence in more than 110 countries and territories, nobody in the world sells more real estate than RE/MAX, as measured by total residential transaction sides. Dedicated to innovation and change in the real estate industry, RE/MAX launched Motto Franchising, LLC, a ground-breaking mortgage brokerage franchisor, in 2016. Motto Mortgage, the first and only national mortgage brokerage franchise brand in the U.S., has over 220 offices across more than 40 states. Forward-Looking Statements This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are often identified by the use of words such as "believe," "intend," "expect," "estimate," "plan," "outlook," "project," "anticipate," "may," "will," "would" and other similar words and expressions that predict or indicate future events or trends that are not statements of historical matters. Forward-looking statements include statements related to agent count; Motto open offices; franchise sales; revenue, including new revenue opportunities; the Company's outlook for the first quarter and full year 2025; non-GAAP financial measures; housing and mortgage market conditions; operational efficiencies; litigation settlement; the Company's expectations around its leadership team and new initiatives; our belief that we are entering 2025 with increased momentum; and our focus on delivering the best customer experience possible. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily accurately indicate the times at which such performance or results may be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. These risks and uncertainties include, without limitation, (1) changes in the real estate market or interest rates and availability of financing, (2) changes in business and economic activity in general, (3) the Company's ability to attract and retain quality franchisees, (4) the Company's franchisees' ability to recruit and retain real estate agents and mortgage loan originators, (5) changes in laws and regulations, (6) the Company's ability to enhance, market, and protect its brands, (7) the Company's ability to implement its technology initiatives, (8) risks related to the Company's leadership transition, (9) fluctuations in foreign currency exchange rates, (10) the nature and amount of the exclusion of charges in future periods when determining Adjusted EBITDA is subject to uncertainty and may not be similar to such charges in prior periods, and (11) those risks and uncertainties described in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission ("SEC") and similar disclosures in subsequent periodic and current reports filed with the SEC, which are available on the investor relations page of the Company's website at www.remaxholdings.com and on the SEC website at www.sec.gov . Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Except as required by law, the Company does not intend, and undertakes no obligation, to update this information to reflect future events or circumstances. TABLE 1 RE/MAX Holdings, Inc Consolidated Statements of Income (Loss) (In thousands, except share and per share amounts) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2024 2023 2024 2023 Revenue: Continuing franchise fees $ 29,788 $ 31,373 $ 122,011 $ 127,384 Annual dues 7,843 8,243 32,188 33,904 Broker fees 11,657 11,544 51,816 51,012 Marketing Funds fees 18,652 20,589 78,983 83,861 Franchise sales and other revenue 4,527 4,851 22,687 29,510 Total revenue 72,467 76,600 307,685 325,671 Operating expenses: Selling, operating and administrative expenses 35,770 39,131 152,258 171,548 Marketing Funds expenses 18,652 20,589 78,983 83,861 Depreciation and amortization 7,072 8,178 29,561 32,414 Settlement and impairment charges 5,483 18,783 5,483 73,783 Change in estimated tax receivable agreement liability 1,219 (381) 1,219 (25,298) Total operating expenses 68,196 86,300 267,504 336,308 Operating income (loss) 4,271 (9,700) 40,181 (10,637) Other expenses, net: Interest expense (8,562) (9,364) (36,258) (35,741) Interest income 903 1,102 3,738 4,420 Foreign currency transaction gains (losses) (893) 36 (1,461) 419 Total other expenses, net (8,552) (8,226) (33,981) (30,902) Income (loss) before provision for income taxes (4,281) (17,926) 6,200 (41,539) Provision for income taxes 8,361 (453) 1,877 (56,947) Net income (loss) $ 4,080 $ (18,379) $ 8,077 $ (98,486) Less: net income (loss) attributable to non-controlling interest (1,725) (7,472) 954 (29,464) Net income (loss) attributable to RE/MAX Holdings, Inc $ 5,805 $ (10,907) $ 7,123 $ (69,022) Net income (loss) attributable to RE/MAX Holdings, Inc. per share of Class A common stock Basic $ 0.31 $ (0.60) $ 0.38 $ (3.81) Diluted $ 0.29 $ (0.60) $ 0.37 $ (3.81) Weighted average shares of Class A common stock outstanding Basic 18,921,229 18,253,608 18,780,200 18,111,409 Diluted 19,985,471 18,253,608 19,293,827 18,111,409 Cash dividends declared per share of Class A common stock $ — $ — $ — $ 0.69 TABLE 2 RE/MAX Holdings, Inc. Consolidated Balance Sheets (In thousands, except share and per share amounts) (Unaudited) As of December 31, December 31, 2024 2023 Assets Current assets: Cash and cash equivalents $ 96,619 $ 82,623 Restricted cash 72,668 43,140 Accounts and notes receivable, current portion, net of allowances 27,807 33,427 Income taxes receivable 7,592 1,706 Other current assets 13,825 15,669 Total current assets 218,511 176,565 Property and equipment, net of accumulated depreciation 7,578 8,633 Operating lease right of use assets 17,778 23,013 Franchise agreements, net 81,186 101,516 Other intangible assets, net 13,382 19,176 Goodwill 237,239 241,164 Income taxes receivable, net of current portion 355 — Other assets, net of current portion 5,565 7,083 Total assets $ 581,594 $ 577,150 Liabilities and stockholders' equity (deficit) Current liabilities: Accounts payable $ 5,761 $ 4,700 Accrued liabilities 110,859 107,434 Income taxes payable 541 766 Deferred revenue 22,848 23,077 Current portion of debt 4,600 4,600 Current portion of payable pursuant to tax receivable agreements 1,537 822 Operating lease liabilities 8,556 7,920 Total current liabilities 154,702 149,319 Debt, net of current portion 436,243 439,980 Deferred tax liabilities 8,448 10,797 Deferred revenue, net of current portion 14,778 17,607 Operating lease liabilities, net of current portion 22,669 31,479 Other liabilities, net of current portion 3,148 4,029 Total liabilities 639,988 653,211 Commitments and contingencies Stockholders' equity (deficit): Class A common stock, par value $.0001 per share, 180,000,000 shares authorized; 18,971,435 and 18,269,284 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively 2 2 Class B common stock, par value $.0001 per share, 1,000 shares authorized; 1 share issued and outstanding as of December 31, 2024 and December 31, 2023, respectively — — Additional paid-in capital 565,072 550,637 Accumulated deficit (133,727) (140,217) Accumulated other comprehensive income (deficit), net of tax (1,864) 638 Total stockholders' equity attributable to RE/MAX Holdings, Inc. 429,483 411,060 Non-controlling interest (487,877) (487,121) Total stockholders' equity (deficit) (58,394) (76,061) Total liabilities and stockholders' equity (deficit) $ 581,594 $ 577,150 TABLE 3 RE/MAX Holdings, Inc Consolidated Statements of Cash Flows (In thousands) (Unaudited) Year Ended December 31, 2024 2023 2022 Cash flows from operating activities: Net income (loss) $ 8,077 $ (98,486) $ 10,757 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 29,561 32,414 35,769 Equity-based compensation expense 18,855 19,536 22,044 Bad debt expense 1,359 6,784 2,581 Deferred income tax expense (benefit) (2,102) 49,387 (183) Fair value adjustments to contingent consideration (225) (533) (133) Settlement charge 5,483 55,150 — Impairment charge - goodwill — 18,633 7,100 Impairment charge - leased assets — — 6,248 Loss on sale or disposition of assets, net 190 406 1,320 Non-cash lease benefit (2,928) (2,847) (2,108) Non-cash loss on lease termination — — 1,175 Non-cash debt charges 863 860 861 Payment of contingent consideration in excess of acquisition date fair value (360) — — Change in estimated tax receivable agreement liability 1,219 (25,298) (702) Other, net (220) 62 47 Changes in operating assets and liabilities Accounts and notes receivable, current portion 7,505 (8,442) 2,789 Other current and noncurrent assets 712 6,461 5,163 Other current and noncurrent liabilities 1,542 (20,249) (17,533) Payments pursuant to tax receivable agreements (504) (440) (3,240) Income taxes receivable/payable (6,505) 298 (871) Deferred revenue, current and noncurrent (2,870) (5,432) 58 Net cash provided by operating activities 59,652 28,264 71,142 Cash flows from investing activities: Purchases of property, equipment and capitalization of software (6,622) (6,419) (9,932) Other 746 776 (1,568) Net cash used in investing activities (5,876) (5,643) (11,500) Cash flows from financing activities: Payments on debt (4,600) (4,600) (4,600) Distributions paid to non-controlling unitholders — (8,655) (13,832) Dividends and dividend equivalents paid to Class A common stockholders (599) (13,553) (18,186) Payments related to tax withholding for share-based compensation (3,075) (4,367) (6,524) Common shares repurchased — (3,408) (34,101) Payment of contingent consideration — (1,234) (1,120) Other financing 1 — — Net cash used in financing activities (8,273) (35,817) (78,363) Effect of exchange rate changes on cash (1,979) 831 (1,550) Net increase (decrease) in cash, cash equivalents and restricted cash 43,524 (12,365) (20,271) Cash, cash equivalents and restricted cash, beginning of period 125,763 138,128 158,399 Cash, cash equivalents and restricted cash, end of period $ 169,287 $ 125,763 $ 138,128 TABLE 4 RE/MAX Holdings, Inc. Agent Count (Unaudited) As of December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, December 31, 2024 2024 2024 2024 2023 2023 2023 2023 2022 Agent Count: U.S. Company-Owned Regions 44,911 46,283 46,780 47,302 48,401 49,576 50,011 50,340 51,491 Independent Regions 6,375 6,525 6,626 6,617 6,730 6,918 6,976 7,110 7,228 U.S. Total 51,286 52,808 53,406 53,919 55,131 56,494 56,987 57,450 58,719 Canada Company-Owned Regions 20,311 20,515 20,347 20,151 20,270 20,389 20,354 20,172 20,228 Independent Regions 4,860 4,878 4,846 4,885 4,898 4,899 4,864 4,899 4,892 Canada Total 25,171 25,393 25,193 25,036 25,168 25,288 25,218 25,071 25,120 U.S. and Canada Total 76,457 78,201 78,599 78,955 80,299 81,782 82,205 82,521 83,839 Outside U.S. and Canada Independent Regions 70,170 67,282 64,943 64,332 64,536 63,527 62,305 61,002 60,175 Outside U.S. and Canada Total 70,170 67,282 64,943 64,332 64,536 63,527 62,305 61,002 60,175 Total 146,627 145,483 143,542 143,287 144,835 145,309 144,510 143,523 144,014 TABLE 5 RE/MAX Holdings, Inc. Adjusted EBITDA Reconciliation to Net Income (Loss) (In thousands, except percentages) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2024 2023 2024 2023 Net income (loss) $ 4,080 $ (18,379) $ 8,077 $ (98,486) Depreciation and amortization 7,072 8,178 29,561 32,414 Interest expense 8,562 9,364 36,258 35,741 Interest income (903) (1,102) (3,738) (4,420) Provision for income taxes (8,361) 453 (1,877) 56,947 EBITDA 10,450 (1,486) 68,281 22,196 Settlement charge (1) 5,483 150 5,483 55,150 Impairment charge - goodwill (2) — 18,633 — 18,633 Equity-based compensation expense 4,412 5,486 18,855 19,536 Acquisition-related expense (3) — 103 — 263 Fair value adjustments to contingent consideration (4) 75 (154) (225) (533) Restructuring charges (5) 1,286 (35) 1,227 4,210 Change in estimated tax receivable agreement liability (6) 1,219 (381) 1,219 (25,298) Other adjustments (7) 416 660 2,860 2,131 Adjusted EBITDA (8) $ 23,341 $ 22,976 $ 97,700 $ 96,288 Adjusted EBITDA Margin (8) 32.2 % 30.0 % 31.8 % 29.6 % (1) Represents the settlements of certain industry class-action lawsuits. (2) During the fourth quarter of 2023, in connection with our annual goodwill impairment test, we concluded that the carrying value of the Mortgage reporting unit within the Mortgage segment exceeded its fair value, resulting in an impairment charge to the Mortgage reporting unit goodwill. (3) Acquisition-related expense includes personnel, legal, accounting, advisory and consulting fees incurred in connection with acquisition activities and integration of acquired companies. (4) Fair value adjustments to contingent consideration include amounts recognized for changes in the estimated fair value of the contingent consideration liabilities. (5) During the fourth quarter of 2024, the Company restructured its support services intended to further enhance the overall customer experience. Additionally, 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. (6) Change in estimated tax receivable agreement liability is a result of a valuation allowance on deferred tax assets recorded during 2024 and 2023. (7) Other adjustments are primarily made up of employee retention related expenses from the Company's CEO transition. (8) Non-GAAP measure. See the end of this press release for definitions of non-GAAP measures. TABLE 6 RE/MAX Holdings, Inc. Adjusted Net Income (Loss) and Adjusted Earnings per Share (In thousands, except share and per share amounts) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2024 2023 2024 2023 Net income (loss) $ 4,080 $ (18,379) $ 8,077 $ (98,486) Amortization of acquired intangible assets 4,621 5,741 19,706 23,040 Provision for income taxes (8,361) 453 (1,877) 56,947 Add-backs: Settlement charge (1) 5,483 150 5,483 55,150 Impairment charge - goodwill (2) — 18,633 — 18,633 Equity-based compensation expense 4,412 5,486 18,855 19,536 Acquisition-related expense (3) — 103 — 263 Fair value adjustments to contingent consideration (4) 75 (154) (225) (533) Restructuring charges (5) 1,286 (35) 1,227 4,210 Change in estimated tax receivable agreement liability (6) 1,219 (381) 1,219 (25,298) Other adjustments (7) 416 660 2,860 2,131 Adjusted pre-tax net income 13,231 12,277 55,325 55,593 Less: Provision for income taxes at 25% (8) (3,307) (3,069) (13,831) (13,898) Adjusted net income (9) $ 9,924 $ 9,208 $ 41,494 $ 41,695 Total basic pro forma shares outstanding 31,480,829 30,813,208 31,339,800 30,671,009 Total diluted pro forma shares outstanding 32,545,071 30,813,208 31,853,427 30,671,009 Adjusted net income basic earnings per share (9) $ 0.32 $ 0.30 $ 1.32 $ 1.36 Adjusted net income diluted earnings per share (9) $ 0.30 $ 0.30 $ 1.30 $ 1.36 (1) Represents the settlements of certain industry class-action lawsuits. (2) During the fourth quarter of 2023, in connection with our annual goodwill impairment test, we concluded that the carrying value of the Mortgage reporting unit within the Mortgage segment exceeded its fair value, resulting in an impairment charge to the Mortgage reporting unit goodwill. (3) Acquisition-related expense includes personnel, legal, accounting, advisory and consulting fees incurred in connection with acquisition activities and integration of acquired companies. (4) Fair value adjustments to contingent consideration include amounts recognized for changes in the estimated fair value of the contingent consideration liabilities. (5) During the fourth quarter of 2024, the Company restructured its support services intended to further enhance the overall customer experience. Additionally, 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. (6) Change in estimated tax receivable agreement liability is a result of a valuation allowance on deferred tax assets recorded during 2024 and 2023. (7) Other adjustments are primarily made up of employee retention related expenses from the Company's CEO transition. (8) The long-term tax rate assumes the exchange of all outstanding non-controlling interest partnership units for Class A Common Stock that (a) removes the impact of unusual, non-recurring tax matters and (b) does not estimate the residual impacts to foreign taxes of additional step-ups in tax basis from an exchange because that is dependent on stock prices at the time of such exchange and the calculation is impracticable. (9) Non-GAAP measure. See the end of this press release for definitions of non-GAAP measures. TABLE 7 RE/MAX Holdings, Inc. Pro Forma Shares Outstanding (Unaudited) Three Months Ended Year Ended December 31, December 31, 2024 2023 2024 2023 Total basic weighted average shares outstanding: Weighted average shares of Class A common stock outstanding 18,921,229 18,253,608 18,780,200 18,111,409 Remaining equivalent weighted average shares of stock outstanding on a pro forma basis assuming RE/MAX Holdings owned 100% of RMCO 12,559,600 12,559,600 12,559,600 12,559,600 Total basic pro forma weighted average shares outstanding 31,480,829 30,813,208 31,339,800 30,671,009 Total diluted weighted average shares outstanding: Weighted average shares of Class A common stock outstanding 18,921,229 18,253,608 18,780,200 18,111,409 Remaining equivalent weighted average shares of stock outstanding on a pro forma basis assuming RE/MAX Holdings owned 100% of RMCO 12,559,600 12,559,600 12,559,600 12,559,600 Dilutive effect of unvested restricted stock units (1) 1,064,242 — 513,627 — Total diluted pro forma weighted average shares outstanding 32,545,071 30,813,208 31,853,427 30,671,009 (1) In accordance with the treasury stock method. TABLE 8 RE/MAX Holdings, Inc. Adjusted Free Cash Flow & Unencumbered Cash (Unaudited) Year Ended December 31, 2024 2023 Cash flow from operations $ 59,652 $ 28,264 Less: Purchases of property, equipment and capitalization of software (6,622) (6,419) (Increases) decreases in restricted cash of the Marketing Funds (1) (2,028) 13,825 Adjusted free cash flow (2) 51,002 35,670 Adjusted free cash flow (2) 51,002 35,670 Less: Tax/Other non-dividend distributions to RIHI — (12) Adjusted free cash flow after tax/non-dividend distributions to RIHI (2) 51,002 35,658 Adjusted free cash flow after tax/non-dividend distributions to RIHI (2) 51,002 35,658 Less: Debt principal payments (4,600) (4,600) Unencumbered cash generated (2) $ 46,402 $ 31,058 Summary Cash flow from operations $ 59,652 $ 28,264 Adjusted free cash flow (2) $ 51,002 $ 35,670 Adjusted free cash flow after tax/non-dividend distributions to RIHI (2) $ 51,002 $ 35,658 Unencumbered cash generated (2) $ 46,402 $ 31,058 Adjusted EBITDA (2) $ 97,700 $ 96,288 Adjusted free cash flow as % of Adjusted EBITDA (2) 52.2 % 37.0 % Adjusted free cash flow less distributions to RIHI as % of Adjusted EBITDA (2) 52.2 % 37.0 % Unencumbered cash generated as % of Adjusted EBITDA (2) 47.5 % 32.3 % (1) This line reflects any subsequent changes in the restricted cash balance (which under GAAP reflects as either (a) an increase or decrease in cash flow from operations or (b) an incremental amount of purchases of property and equipment and capitalization of developed software) to remove the impact of changes in restricted cash in determining adjusted free cash flow. (2) Non-GAAP measure. See the end of this press release for definitions of non-GAAP measures. Non-GAAP Financial Measures The SEC has adopted rules to regulate the use in filings with the SEC and in public disclosures of financial measures that are not in accordance with U.S. GAAP, such as revenue excluding the Marketing Funds, Adjusted EBITDA and the ratios related thereto, Adjusted net income, Adjusted basic and diluted earnings per share (Adjusted EPS) and adjusted free cash flow. These measures are derived based on methodologies other than in accordance with U.S. GAAP. Revenue excluding the Marketing Funds is calculated directly from our consolidated financial statements as Total revenue less Marketing Funds fees. The Company defines Adjusted EBITDA as EBITDA (consolidated net income before depreciation and amortization, interest expense, interest income and the provision for income taxes, each of which is presented in the unaudited consolidated financial statements included earlier in this press release), adjusted for the impact of the following items that are either non-cash or that the Company does not consider representative of its ongoing operating performance: loss or gain on sale or disposition of assets and sublease, settlement and impairment charges, equity-based compensation expense, acquisition-related expense, gain on reduction in tax receivable agreement liability, expense or income related to changes in the estimated fair value measurement of contingent consideration, restructuring charges and other non-recurring items. Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of revenue. Because Adjusted EBITDA and Adjusted EBITDA margin omit certain non-cash items and other non-recurring cash charges or other items, the Company believes that each measure is less susceptible to variances that affect its operating performance resulting from depreciation, amortization and other non-cash and non-recurring cash charges or other items. The Company presents Adjusted EBITDA and the related Adjusted EBITDA margin because the Company believes they are useful as supplemental measures in evaluating the performance of its operating businesses and provides greater transparency into the Company's results of operations. The Company's management uses Adjusted EBITDA and Adjusted EBITDA margin as factors in evaluating the performance of the business. Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools, and you should not consider these measures in isolation or as a substitute for analyzing the Company's results as reported under U.S. GAAP. Some of these limitations are: these measures do not reflect changes in, or cash requirements for, the Company's working capital needs; these measures do not reflect the Company's interest expense, or the cash requirements necessary to service interest or principal payments on its debt; these measures do not reflect the Company's income tax expense or the cash requirements to pay its taxes; these measures do not reflect the cash requirements to pay dividends to stockholders of the Company's Class A common stock and tax and other cash distributions to its non-controlling unitholders; these measures do not reflect the cash requirements pursuant to the tax receivable agreements; these measures do not reflect the cash requirements for share repurchases; these measures do not reflect the cash requirements for the settlements of certain industry class-action lawsuits and other legal settlements; although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often require replacement in the future, and these measures do not reflect any cash requirements for such replacements; although equity-based compensation is a non-cash charge, the issuance of equity-based awards may have a dilutive impact on earnings per share; and other companies may calculate these measures differently so similarly named measures may not be comparable. The Company's Adjusted EBITDA guidance does not include certain charges and costs. The adjustments to EBITDA in future periods are generally expected to be similar to the kinds of charges and costs excluded from Adjusted EBITDA in prior quarters, such as gain or loss on sale or disposition of assets and sublease, settlement and impairment charges, equity-based compensation expense, acquisition-related expense, gains or losses from changes in the tax receivable agreement liability, expense or income related to changes in the fair value measurement of contingent consideration, restructuring charges and other non-recurring items. The exclusion of these charges and costs in future periods will have a significant impact on the Company's Adjusted EBITDA. The Company is not able to provide a reconciliation of the Company's non-GAAP financial guidance to the corresponding U.S. GAAP measures without unreasonable effort because of the uncertainty and variability of the nature and amount of these future charges and costs. Adjusted net income is calculated as Net income attributable to RE/MAX Holdings, assuming the full exchange of all outstanding non-controlling interests for shares of Class A common stock as of the beginning of the period (and the related increase to the provision for income taxes after such exchange), plus primarily non-cash items and other items that management does not consider to be useful in assessing the Company's operating performance (e.g., amortization of acquired intangible assets, gain on sale or disposition of assets and sub-lease, non-cash impairment charges, acquisition-related expense, restructuring charges and equity-based compensation expense). Adjusted basic and diluted earnings per share (Adjusted EPS) are calculated as Adjusted net income (as defined above) divided by pro forma (assuming the full exchange of all outstanding non-controlling interests) basic and diluted weighted average shares, as applicable. When used in conjunction with GAAP financial measures, Adjusted net income and Adjusted EPS are supplemental measures of operating performance that management believes are useful measures to evaluate the Company's performance relative to the performance of its competitors as well as performance period over period. By assuming the full exchange of all outstanding non-controlling interests, management believes these measures:facilitate comparisons with other companies that do not have a low effective tax rate driven by a non-controlling interest on a pass-through entity; facilitate period over period comparisons because they eliminate the effect of changes in Net income attributable to RE/MAX Holdings, Inc. driven by increases in its ownership of RMCO, LLC, which are unrelated to the Company's operating performance; and eliminate primarily non-cash and other items that management does not consider to be useful in assessing the Company's operating performance. Adjusted free cash flow is calculated as cash flows from operations less capital expenditures and any changes in restricted cash of the Marketing Funds, all as reported under GAAP, and quantifies how much cash a company has to pursue opportunities that enhance shareholder value. The restricted cash of the Marketing Funds is limited in use for the benefit of franchisees and any impact to adjusted free cash flow is removed. The Company believes adjusted free cash flow is useful to investors as a supplemental measure as it calculates the cash flow available for working capital needs, re-investment opportunities, potential Independent Region and strategic acquisitions, dividend payments or other strategic uses of cash. Adjusted free cash flow after tax and non-dividend distributions to RIHI is calculated as adjusted free cash flow less tax and other non-dividend distributions paid to RIHI (the non-controlling interest holder) to enable RIHI to satisfy its income tax obligations. Similar payments would be made by the Company directly to federal and state taxing authorities as a component of the Company's consolidated provision for income taxes if a full exchange of non-controlling interests occurred in the future. As a result and given the significance of the Company's ongoing tax and non-dividend distribution obligations to its non-controlling interest, adjusted free cash flow after tax and non-dividend distributions, when used in conjunction with GAAP financial measures, provides a meaningful view of cash flow available to the Company to pursue opportunities that enhance shareholder value. Unencumbered cash generated is calculated as adjusted free cash flow after tax and non-dividend distributions to RIHI less quarterly debt principal payments less annual excess cash flow payment on debt, as applicable. Given the significance of the Company's excess cash flow payment on debt, when applicable, unencumbered cash generated, when used in conjunction with GAAP financial measures, provides a meaningful view of the cash flow available to the Company to pursue opportunities that enhance shareholder value after considering its debt service obligations. 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