RE/MAX Q3 2025 Earnings Call: Contradictions Emerge on Agent Recruitment, Brokerage Growth, Motto Mortgage Strategy, and Productivity Tools

Date of Call: October 31, 2025

Financials Results

• Revenue: $73.3M total revenue in Q3 2025; excluding marketing funds revenue was $55.1M, down 5.6% YOY (organic revenue down 5.4%; adverse FX -0.2%)
• EPS: $0.37 adjusted diluted EPS (Q3 2025; company did not provide YOY EPS comparison)

Guidance:

• Q4 2025: agent count +0% to +1.5% vs Q4 2024; revenue $69.5M–$73.5M (marketing funds $17M–$19M); adjusted EBITDA $19M–$23M.
• Full-year 2025: agent count +0% to +1.5% vs FY2024; revenue $290M–$294M (marketing funds $72M–$74M; prior range had $290M–$296M); adjusted EBITDA $90M–$94M (prior upper $95M).
• Guidance assumes no further currency movements, acquisitions or divestitures.

Business Commentary:

• Agent Growth and Network Engagement:
• RE/MAX Holdings' worldwide agent count reached a record high of over 147,500 agents, with the U.S. agent count performing at its best in three years.

• The growth was driven by steady global expansion and U.S. market recovery, alongside new initiatives like the Aspire program which enhanced the value proposition and network engagement.

• Marketing and Revenue Diversification:

• The Marketing as a Service platform is expected to contribute a low 7-figure annual run rate, with a margin profile in the high single-digit to low double-digit range.

• The platform's success is attributed to increased engagement and effectiveness in marketing efforts, which help agents win more listings and save time.

• Operational Efficiency and Margin Improvement:

• Third-quarter adjusted EBITDA margin improved by 40 basis points to 35.2%, despite a slower-than-anticipated housing market.

• This was achieved through operational efficiencies, such as reduced personnel and event expenses, despite increased investments in technology and legal fees.

• Capital Allocation and Share Repurchase:

• RE/MAX Holdings plans to evaluate returning capital to shareholders due to attractive share repurchase opportunities since the total leverage ratio decreased to 3.41x.

• The decision is based on strategic reinvestment and cash reserve building, with a focus on maximizing shareholder value.

• Mortgage Business and Leadership:

• RE/MAX appointed Vic Lombardo as President of Mortgage Services, aiming to grow its mortgage business and increase operational efficiencies.
• The appointment is part of a strategic effort to capitalize on the extensive RE/MAX network and expand into new mortgage offerings and opportunities.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted multiple positives: “momentum...continued,” a record worldwide agent count of over 147,500, and Q3 profit "at the high end of our expectations." CFO noted adjusted EBITDA $25.8M and adjusted EBITDA margin 35.2%, up 40 bps YOY, and total leverage ratio fell to 3.41x (below 3.5x), enabling capital allocation flexibility. Management repeatedly described strong early engagement with new products and optimistic growth prospects.

Q&A:

• Question from Anthony Paolone (JPMorgan Chase & Co, Research Division): Can you give more color on the 7-figure contributions from marketing/other programs and expectations for 2026, and what the margin profile might look like?
  Response: Marketing as a Service and RE/MAX Media Network are already low 7-figure contributors in 2025 and are expected to grow in 2026; Marketing as a Service margins are expected in the high-single to low-double-digit range, while the Media Network will have higher-than-normal margins.

• Question from Anthony Paolone (JPMorgan Chase & Co, Research Division): Thoughts on M&A activity in the sector and whether it's affecting recruitment or agent movement?
  Response: Industry consolidation creates opportunities; RE/MAX is seeing increased inbound interest and a robust franchise sales/conversion pipeline, which is accelerating recruitment momentum.

• Question from Nick McAndrew (Zelman & Associates LLC): With Aspire, Ascend and Appreciate live, which agent segments do each target and how are franchisees using them (recruiting vs existing base)?
  Response: Aspire targets newer agents (~1,500 enrolled), is incremental and improves retention; Appreciate is for retiring/low-activity agents; Ascend offers lower fixed fees/higher variable splits for agents wanting that economics; franchisees are adopting selectively for recruiting and retention.

• Question from Nick McAndrew (Zelman & Associates LLC): Are you seeing tangible productivity uplifts from Lead Concierge or Marketing as a Service among engaged agents/offices?
  Response: Early 'green shoots'—increased listing engagement and consumer clicks—suggest the tools are improving lead flow and should boost productivity over time, though effects take longer due to long sales cycles.

• Question from Matthew Erdner (JonesTrading Institutional Services, LLC, Research Division): Can you expand on initiatives at Motto and the path to profitability?
  Response: New leadership is repositioning Motto and the mortgage opportunity toward a more variable (less fixed) model focused on helping LOs generate business; strategy is early-stage and specifics will be shared in February.

• Question from Matthew Erdner (JonesTrading Institutional Services, LLC, Research Division): How will you leverage your agent network to grow mortgage and other services?
  Response: The company will monetize the network via digital products (Marketing as a Service, Lead Concierge, Media Network), drive referrals across agent-consumer transactions and focus on meaningful post-close engagement to increase lifetime value.

• Question from Thomas Mcjoynt-Griffith (Keefe, Bruyette, & Woods, Inc., Research Division): Can you quantify the organic revenue impact from modifications to the standard fee model and is this a run-rate or near-term effect?
  Response: The impact is a near-term headwind tied to onboarding ~1,500 Aspire agents; it's an upfront investment that should dissipate as agents train, become productive and adopt other services.

• Question from Thomas Mcjoynt-Griffith (Keefe, Bruyette, & Woods, Inc., Research Division): Any change in buyback appetite now that leverage is lower—should we expect buybacks by year-end?
  Response: With total leverage ratio below 3.5x, capital allocation flexibility has improved and returning capital (share repurchases) is attractive at current prices; management will evaluate opportunities, with more to come but no specific year-end commitment given.

Contradiction Point 1

Agent Recruitment and Aspire Program Impact

It involves the effect of the Aspire program on agent recruitment and productivity, which directly impacts the company's growth and financial performance.

Can you quantify the impact of fee model changes on organic revenue and is it a run-rate or a lapse after a year? - Thomas McJoynt-Griffith (Keefe, Bruyette, & Woods, Inc., Research Division)

2025Q3: The Aspire program resulted in a short-term headwind due to onboarding costs for 1,500 agents. However, as agents integrate and become productive, this impact is expected to dissipate. - Karri Callahan(CFO)

How much of the reduced guidance range is due to lower variable brokerage fee-driven volumes versus lower recurring fees from the agent count? - Thomas Patrick McJoynt-Griffith (Keefe, Bruyette, & Woods, Inc., Research Division)

2025Q2: The Aspire program has accelerated recruiting but will take time to deliver significant revenue. - Karri R. Callahan(CFO)

Contradiction Point 2

Agent Engagement and Productivity Improvement

It involves the impact of digital tools and marketing capabilities on agent productivity, which is crucial for improving the company's overall performance and revenue generation.

Is there a measurable increase in agent productivity from using digital tools and marketing capabilities? - Nick McAndrew (Zelman & Associates LLC)

2025Q3: The increased engagement on listings is promising. While it's a long sales cycle, we're seeing encouraging signs. - Erik Carlson(CEO)

How many agents are actively using 1, 2, or more of the agent-facing tools? Does full integration with all tools increase agent stickiness? - Nick McAndrew (Zelman & Associates LLC)

2025Q2: It's too early to determine the impact of tool engagement on retention. However, there's good adoption of tools like the global referral platform, MAXEngage, and lead concierge, indicating agents find value in the services offered. - W. Erik Carlson(CEO)

Contradiction Point 3

Brokerage Fees Revenue Growth Expectation

It involves projections for brokerage fees revenue growth, which is a critical component of the company's financial performance.

Can you quantify how modifications to standard fee models affect organic revenue and whether the impact is a run-rate or lapses after a year? - Thomas McJoynt-Griffith (Keefe, Bruyette, & Woods, Inc., Research Division)

2025Q3: Brokerage fee revenue increased 1% year-over-year. On a local currency basis, we realized 2% growth. - Karri Callahan(CFO)

What factors affect the 2025 revenue guidance, specifically brokerage fees and recurring revenues? - Thomas Mcjoynt-Griffith (KBW)

2024Q4: Broker fees are projected to grow in low single digits year-over-year. - Karri Callahan(CFO)

Contradiction Point 4

Motto Mortgage Strategy and Profitability

It highlights changes in the strategy for Motto Mortgage and expectations for achieving profitability, which are critical for RE/MAX's financial performance.

Can you detail the changes to Motto Mortgage and its profitability path? - Matthew Erdner (JonesTrading Institutional Services, LLC, Research Division)

2025Q3: We've shifted to a variable model, aiming to better support our network and LOs. The strategy includes leveraging the agent network for mortgage opportunities. We're excited about the potential and will provide more details in February. - Erik Carlson(CEO)

How long until Motto Mortgage's restructuring generates positive EBITDA? - Anthony Paolone (JPMorgan Chase & Co, Research Division)

2025Q1: We will also be moving Motto Mortgage to a variable model as we continue to fine-tune this offering to best support our network and LOs. We will provide more detail on this in the second quarter. - Erik Carlson(CEO)

Contradiction Point 5

Agent Productivity and Marketing Tools

It involves the impact of digital tools and marketing capabilities on agent productivity, which is crucial for the company's growth and revenue.

Have you seen an increase in productivity from agents using digital tools and marketing? - Nick McAndrew (Zelman & Associates LLC)

2025Q3: The increased engagement on listings is promising. While it's a long sales cycle, we're seeing encouraging signs. We're focused on providing tools that help agents win more listings and improve productivity. - Erik Carlson(CEO)

Can you provide data on the productivity gains from your agents and how much they've increased over the past few years? - Vivek Arya (Bank of America Securities)

2025Q1: We see the leverage from the digital tools that we've put in the hands of agents as the most significant driver of productivity long-term. - Erik Carlson(CEO)