Slides
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RE/MAX Holdings, Inc. Investor Presentation April 2025
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Forward-Looking Statements This presentation 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; operating expenses; non-GAAP financial measures; housing and mortgage market conditions and forecasts; growth; competitive advantages of the Company’s brands; capital allocation (including share repurchases and dividends); litigation settlement; reinvestment in the business; strategic initiatives; and acquisitions. 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 attractand 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, including the RE/MAX and Motto Mortgage 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.
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Leading Dual-Brand Franchisor With Many Competitive Advantages 1Motto Mortgage was ranked 494 in the 2025 Entrepreneur magazine Franchise 500® and was named first in Entrepreneur's category for Miscellaneous Financial Services. Both the overall and category ranking are based on an analysis of over 150 data points in the areas of costs and fees, support, size and growth, and brand strength, from franchise disclosure and related documents of 1,366 participating franchise systems across the United States and Canada 2As measured by residential transaction sides 3Source: Transaction sides per agent calculated by RE/MAX based on 2024 RealTrends Verified Best Brokerages data, citing 2023 transaction sides for the 1,327 largest participating U.S. brokerages that closed 500 transaction sides, excluding 65 who did not report or publish active licensees. RE/MAX average: 11.8. Competitors: 5.2. 4#1 Most Trusted Real Estate Agents in the USA. Voted most trusted Real Estate Agency brand by American shoppers based on BrandSpark American Trust Survey 5RE/MAX has a presence in more than 110 countries and territories 6Source: MMR Strategy Group study of unaided awareness
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Successful Franchisors ▪ Unique product or service offering ▪ Brand name and market share ▪ Training and productivity tools ▪ Group purchasing power Key Success Factors of Franchisors Hallmarks of a Successful Franchise Business
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The Real Estate Brokerage Franchisor
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RE/MAX Leads National Full-Service Brokerage Brands and Franchises in Agent Productivity *Data is full-year or as of year-end 2023, as applicable. Except as noted, Coldwell Banker, Century 21, ERA, Sotheby’s and Bette r Homes and Gardens data is as reported by Anywhere Real Estate Inc. on SEC 10 -K, Annual Report for 2023; other competitor data is from company websites and industry reports. 1Transaction sides per agent calculated by RE/MAX based on data from 2024 RealTrends Verified Best Brokerages, citing 2023 transaction sides for the 1,327 participating U.S. brokerages that closed 500 transacti on sides, excluding 65 who did not report or publish active licensees. Coldwell Banker includes Anywhere Advisors Group. For the following competitors, averages were calculated by RE/MAX based on the 2024 RISMedia Power Broker Top 1,000, citing 2023 totals for residential transaction sides and agents for the 1,000 largest participating U.S. brokerages ranked by sales volume: Compass. 2Totals for Sotheby’s, Coldwell Banker, Century 21, ERA, Better Homes & Gardens and RE/MAX include commercial transactions. 3MMR Strategy Group study of unaided awareness among buyers, sellers, and those planning to buy or sell; asked, when they thin k of real estate brands, which ones come to mind?
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104,826 111,915 119,041 124,280 130,889 137,792 141,998 144,014 144,835 146,627 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Total Agent Count Growth: 2015 - 2024 Total Network Agent Count ▪ Over 40,000 agents added to network from 2015-2024 ▪ Over 50,000 agents in U.S. ▪ Over 25,000 agents in Canada ▪ Over 70,000 agents outside the U.S. and Canada
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Unmatched Global Footprint RE/MAX Global Footprint Agents by Geography The RE/MAX brand has a presence in over 110 countries and territories RE/MAX Regional or Franchise Presence As of December 31, 2024 As of December 31, 2024 Outside the U.S. and Canada 70,170 Agents Canada 25,171 Agents U.S. 51,286 Agents
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144,835 80,299 64,536 146,627 76,457 70,170 Total RE/MAX U.S. & Canada Outside U.S. & Canada Total Agent Count Agent Count Change Year-over-Year December 31, 2023 December 31, 2024 (+1,792 agents) +1.2% YoY -4.8% YoY (-3,842 agents) +8.7% YoY (+5,634 agents) Year-over-Year Agent Count Increased 1.2% Record Agent Count as of December 31, 2024
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Unique and Effective Agent-Centric RE/MAX Model Traditional Brokerage Revenue Driven by Commission ❑ Owned & operated by brokerage ❑ 30-40% of commission goes to broker1 ❑ Commission rate typically determined by brokerage, not agent ❑ Lack of autonomy within brokerage ❑ Marketing dictated by brokerage The RE/MAX Model ◼ RE/MAX is 100% franchised ◼ Recommended 95% agent commission2 ◼ Ability for agents to negotiate commission rates with sellers in many cases ◼ Entrepreneurially driven agents ◼ Multiple support channels: brand, marketing & education Revenue Driven by Agent Count 1In some cases, with a cap 2Excludes agents participating in the Aspire program
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Our Agents and Franchisees are in Business FOR Themselves, But NOT by Themselves 1MMR Strategy Group study of unaided awareness. 2Voted most trusted Real Estate Agency brand by American shoppers based on the BrandSpark® American Trust Study, years 2022-2024 and 2019. 3Voted most trusted Real Estate Agency brand by Canadian shoppers based on the BrandSpark® Canadian Trust Study, years 2021-2024, 2019 and 2017 4Transaction sides per agent calculated by RE/MAX based on 2024 RealTrends Verified Best Brokerages data, citing 2023 transaction sides for the 1,327 largest participating U.S. brokerages that closed 500 transaction sides, excluding 65 who did not report or publish active licensees. RE/MAX average: 11.8. Competitors: 5.2. 5More visits than any other national real estate franchisor website, according to ComScore report of 2023 data for U.S. real e state franchisor among website visits in the “Business and Consumer Services/Real Estate” category 6Based on a study of agents who participated in at least one RU course during their first year at RE/MAX Affiliation with #1 Name in Real Estate1 Attractive Agent & Franchise Economics Entrepreneurial Culture Lead Referral System Education Programs ◼ RE/MAX University®; 24/7 on demand and certification education courses ◼ New agents who engaged in RE/MAX University®, on average, closed more transactions and earned more commissions6 ◼ Recommended 95% / 5% split with broker vs. 70% / 30% or 60% / 40% at traditional brokerages ◼ Sell more, earn more ◼ Relatively low initial franchisee fee Differentiated Agent-Centric Approach Attracts Entrepreneurial Agents and Franchisees ◼ Most trusted agents in the U.S. and Canada2,3 ◼ RE/MAX agents average double the sales of other agents in the 2024 Real Trends Verified 500 survey of large brokerages4 ◼ Founded by industry “mavericks” ◼ Agent-centric model ◼ Negotiates own commission rates, self-promote, etc. ◼ We believe we generate more free leads than any other national real estate brokerage brand ◼ Global agent network facilitates agent-to-agent referrals ◼ #1 real estate franchisor website5; global websites attract buyers and sellers
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Revenue Model Revenue Streams from Agent to Franchisee to RE/MAX1 asdas Company-Owned Regions in U.S. & Canada RE/MAX Franchises / Brokerages Agents 1Illustrative of the majority of Company-Owned Regions in the U.S. 2Annual dues are currently a flat fee of US$410/CA$410 per agent annually for our U.S. and Canadian agents. The average per ag ent for the year ended December 31, 2024, in both Independent Regions and Company -Owned Regions reflects the impact of foreign currency movements related to revenue received from Canadian agents. 3In Company-Owned Regions we receive approximately $820 less per agent in Canada than we do for agents in the U.S. due to foreign currency impacts and different broker fee structures. 4Broker fees in a limited number of locations (mainly the acquired U.S. regions from RE/MAX INTEGRA, Texas, and parts of Canad a) are capped at certain commission levels. In the Eastern half of Canada, generally, no broker fee is charged. Continuing Franchise Fee Broker Fee 1% of Commissions Fixed Monthly Management Fee Recommended 5% of Commissions Annual Dues $410 / Agent Per Year ~$2,570 / Agent Average ~$1,470 / Agent Average ~$720 / Agent Average ~$380 / Agent Average Annual DuesBroker Fee4Continuing Franchise Fees 2024 Annual Revenue per Agent to RE/MAX (U.S. & Canada)2,3
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Revenue Model 2024 Annual Revenue per Agent to RE/MAX (U.S. & Canada)2 Independent Regions in U.S. & Canada RE/MAX Franchises / Brokerages Agents Continuing Franchise Fee Broker Fee 1% of Commissions Fixed Monthly Management Fee Recommended 5% of Commissions Annual Dues $410 / Agent Per Year ~$770 / Agent Average ~$290 / Agent Average ~$120 / Agent Average ~$360 / Agent Average Annual DuesBroker Fee4Continuing Franchise Fees 1Illustrative of Independent Regions in the U.S. 2Annual dues are currently a flat fee of US$410/CA$410 per agent annually for our U.S. and Canadian agents. The average per ag ent for the year ended December 31, 2024, in both Independent Regions and Company-Owned Regions reflects the impact of foreign currency movements related to revenue received from Canadian agents. The ratio of Canadian agents to U. S. agents in Independent Regions has increased as a result of U.S. Independent Region acquisitions. Independent Regions 15%-30% of Continuing Franchise Fee Broker Fee Initial Franchise Fee Revenue Streams from Agent to Franchisee to Independent Region to RE/MAX1
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RE/MAX Aspire – New Agent Onboarding Program Education Agents required to complete courses designed to improve productivity Marketing Agents unlock marketing benefits after achieving certain milestones Agents leverage Max/Tech® powered by BoldTrail to enhance productivityTechnology Economics Franchisee fees related to new agents are 100% variable in the first twelve months1 1Economic model is generally based on agent productivity up to a maximum annual payment by the franchisee of $5K per agent, plus a tran saction fee An optional, enhanced onboarding program designed to build the next generation of top-producing RE/MAX agents combining education, marketing and technology offerings alongside an attractive economic model Designed to incentivize recruiting leveraging extensive franchisee feedback
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Franchise Sales Help Drive Agent Growth ▪ Target geographies in the U.S. and Canada where RE/MAX share is below network average ▪ Selling to entrepreneurial brokers who will grow the business Global Franchise Sales Consistently Strong 752 929 903 1,059 1,120 1,030 1,033 1,069 963 948 799 98,010 104,826 111,915 119,041 124,280 130,889 137,792 141,998 144,014 144,835 146,627 80,000 100,000 120,000 140,000 160,000 180,000 200,000 0 200 400 600 800 1,000 1,200 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Franchise Sales Agents
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Mortgage
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▪ 100% franchised mortgage brokerage business ▪ Not a lender and does not underwrite loans ▪ Offers convenience to home buyers by bringing real estate agents and licensed loan originators together under one roof ▪ Motto Mortgage loan originators access a variety of quality loan options from multiple leading wholesalers ▪ Core operational team is scaling as Motto grows ▪ Franchises can be purchased by select qualified candidates both within and outside of RE/MAX network Motto Mortgage Fact Sheet
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Franchise Sold License Obtained Franchisee Ramps to Paying $4,650 Monthly Royalty Fee Attend Training Estimated 12 to 14 months Illustrative of the expected sequence and timing of events for a new Motto Mortgage franchisee. Actual sequence and timing of events may vary. Franchise Opens Motto Mortgage Timeline
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Motto Is a Compelling Growth Opportunity Each Motto office that has been open for more than one year brings in approximately the same amount of annual revenue as a 22-agent RE/MAX office in a Company-Owned region1. 1Based on 2024 revenue per agent in a Company-Owned region.
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212121 ◼ Significant expansion of Motto Mortgage value proposition ◼ Complementary business with exciting growth opportunities beyond current offerings ◼ Access to dependable, efficient mortgage loan processing services at attractive prices for Motto Mortgage franchisees ◼ Helps solve one of the biggest pain points for Motto Mortgage franchisees and the mortgage brokerage industry as a whole: inefficient mortgage loan processing Facts Benefits to Motto Mortgage ◼ wemlo℠ is reshaping the mortgage loan processing in the mortgage broker channel ◼ wemlo has developed the first enterprise-grade tech solution for mortgage brokers, combining third-party mortgage loan processing with an all-in-one digital platform ◼ wemlo’s streamlined platform improves mortgage loan processing by integrating pricing, lender onboarding services, document collection/verification, processing, e-closing, compliance, and more ◼ wemlo earns revenue through the fees it charges for processing mortgage loans on a per-file basis
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$2,536 $4,542 $6,610 $10,051 $12,388 $13,993 $14,609 $(3,436) $(2,709) $(2,255) $(5,321) $(6,368) $(6,920) $(5,073) $(10,000) $(5,000) $- $5,000 $10,000 $15,000 2018 2019 2020 2021 2022 2023 2024 $ in 000's Revenue Adjusted EBITDA Mortgage Segment Continues to Expand Year-over-Year Revenue Growth of ~4% 1Loss increased in FY2021 and FY2022 primarily due to investment in wemlo. 2Adjusted EBITDA is a non-GAAP measure and excludes all adjustments attributable to the non -controlling interest. See the Appendix for definitions and reconciliations of non-GAAP measures. 11 2
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Financials
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34%Relatively High Adjusted EBITDA Margins2,3 30% 32% 1Revenue excluding the Marketing Funds was $228.7 in 2024, $241.8 million in 2023, and $263.1 million in 2022. 2Adjusted EBITDA, Adjusted EBITDA margins and Adjusted Net Income are Non -GAAP measures. See Appendix for definitions and reconciliations of non-GAAP measures. 3The Marketing Funds have no impact to Adjusted EBITDA as revenue from the Marketing Funds is offset by an equal amount of exp enses; however, there is an impact to Adjusted EBITDA margin due to higher revenue from the Marketing Funds. ($M) As of December 31 ($M) As of December 31 24 ($M) As of December 31 Annual Financial Performance Revenue1 Adjusted EBITDA2 Adjusted Net Income2 $353 $326 $308 0 100 200 300 400 2022 2023 2024 $122 $96 $98 0 40 80 120 160 2022 2023 2024 $68 $42 $41 0 20 40 60 80 100 2022 2023 2024
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Quarterly Financial Performance Revenue1 Adjusted EBITDA2 Adjusted Net Income2 Generating High Margins ($M) As of December 31($M) As of December 31 Relatively High Adjusted EBITDA Margins1 30% 24% 36% 35% 32% 1Adjusted EBITDA, Adjusted EBITDA margins and Adjusted Net Income are Non -GAAP measures. See Appendix for definitions and reconciliations of Non-GAAP measures. ($M) As of December 31 $77 $78 $78 $78 $72 0 20 40 60 80 100 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 $23 $19 $28 $27 $23 0 10 20 30 40 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 $9 $6 $13 $12 $10 0 5 10 15 20 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024
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Revenue by Stream and Geographic Area 2024 Revenue Streams1 2024 Revenue by Geographic Area1 Large Recurring Revenue Base Franchise Sales & Other Revenue Broker Fees Annual Dues Continuing Franchise Fees Recurring fees and dues (i.e., Continuing Franchise Fees and Annual Dues) accounted for 67% of revenue1 in 2024 ~94% of 2024 revenue1 was generated in the U.S. and Canada Outside the U.S. and Canada Canada United States 1Excludes revenue from Marketing Funds 10%
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Balance Sheet, Capital Allocation & Liquidity Balance Sheet & Leverage Capital Allocation & Liquidity ▪ Cash balance of $96.6 million on December 31, 2024, up $14.0 million from December 31, 2023 ▪ $440.8 million in outstanding debt1 and no revolving loans outstanding ▪ Total Debt / TTM Adjusted EBITDA2 of 4.5:13 ▪ Net Debt / TTM Adjusted EBITDA2 of 3.5:14,5 ▪ The Company has 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. ▪ The Company's Total Liquidity Ratio (“TLR”) was 3.57:15,6 as of December 31, 2024. 1Net of unamortized debt discount and debt issuance costs 2Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP numbers and exclude all adjustments attributable to the non -controlling interest. See the Appendix for definitions and reconciliations of non -GAAP measures. 3Based on twelve months ended December 31, 2024, Adjusted EBITDA of $97.7M and total debt of $440.8M, net of unamortized debt discount and debt issuance costs 4Based on twelve months ended December 31, 2024, Adjusted EBITDA of $97.7M and net debt of $344.2M, net of unamortized debt di scount, debt issuance costs and unrestricted cash balance on December 31, 2024 5The $5.5 million litigation settlement is not excluded from consolidated EBITDA when calculating the Total Leverage Ratio (“T LR”) pursuant to the RE/MAX, LLC Senior Secured Credit Facility, based on the applicable definitions of consolidated EBITDA and indebtedness as defined therein. 6The Company’s TLR is calculated pursuant to the RE/MAX, LLC Senior Secured Credit Facility for the trailing twelve -month period ending December 31, 2024, based on the applicable definitions of Consolidated EBITDA and indebtedness as defined therein.
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$60 $51 $51 $46 5 15 25 35 45 55 65 Operating Cash Flow Adjusted Free Cash Flow Adjusted Free Cash Flow after Distributions to RIHI Unencumbered Cash Generated Annual Adjusted EBITDA1 Conversion to Adjusted Free Cash Flow1 Full Year 2024 $’s in Millions As % of Adj. EBITDA1 61% 1 Adjusted EBITDA and Adjusted Free Cash Flow are non-GAAP measures and exclude all adjustments attributable to the non-controlling interest. See the Appendix for definitions and reconciliations of non-GAAP measures. 2Adjusted Free Cash Flow = Operating Cash Flow – Capital Expenditures -/+ changes in restricted cash of the Marketing Funds 3Adjusted Free Cash Flow after Distributions to RIHI = Adjusted Free Cash Flow – Tax and other discretionary non-dividend distributions paid to RIHI to enable RIHI to satisfy its income tax obligations 4Unencumbered Cash Generated = Adjusted Free Cash Flow after Distributions to RIHI – Quarterly debt principal payments – Annual excess cash flow payment on debt; see Appendix for reconciliation of Non -GAAP measures 52% 52% 47% 2 3 4
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RE/MAX Holdings, Inc. A Leading Dual-Brand Franchisor with Compelling Growth Opportunities #1 Name in Real Estate1 (US/Canada) and Unmatched Global Footprint2 Large Network of Offices with Nearly $2.7 Billion in 2024 Annual Loan Volume Highly Productive Network of More Than 145,000 Agents First-and-Only National Mortgage Brokerage Franchise in U.S. Most-Trusted Agents in the U.S. and Canada3,4 Top Franchise as part of Entrepreneur’s Franchise 500® list5 RMAX: Recurring Revenue, High Margins & Strong Free Cash Flow 1Source: MMR Strategy Group Study of unaided brand awareness 2RE/MAX has a presence in more than 110 countries and territories 3Voted most trusted Real Estate Agency brand by American shoppers based on the BrandSpark® American Trust Study, years 2022-2024 and 2019. 4Voted most trusted Real Estate Agency brand by Canadian shoppers based on the BrandSpark® Canadian Trust Study, years 2021-2024, 2019 and 2017 5Motto Mortgage was ranked 494 in the 2025 Entrepreneur magazine Franchise 500® and was named first in Entrepreneur's category for Miscellaneous Financial Services. Both the overall and category ranking are based on an analysis of over 150 data points in the areas of costs and fees, support, size and growth, and brand strength, from franchise disclosure and related documents of 1,366 participating franchise systems across the United States and Canada.
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Appendix
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Housing Starts - Single Family3,5 (Thousands) Monthly Existing Home Sales1 (Thousands) Annual Existing Home Sales2,3 (Millions) Home Price Appreciation3,4 (YoY) Industry Forecasts 4.09 4.06 4.15 4.09 4.09 4.47 2023 2024e 2025e Fannie Mae NAR 948 1005 993949 1010 1012 2023 2024e 2025e Fannie Mae NAHB 5.5% 5.8% 3.5% 6.4% 3.8% 1.3% 2023 2024e 2025e Fannie Mae MBA 1Source: NAR (National Association of Realtors) – Existing Home Sales, numbers presented are not seasonally adjusted; December 2017 through December 2024 2Source: NAR (National Association of Realtors) – U.S. Economic Outlook, October 2024 3Source: Fannie Mae – Economic and Strategic Research – Housing Forecast, January 2025 4Source: Mortgage Bankers Association – MBA Mortgage Finance Forecast, January 2025 5Source: NAHB (National Association of Home Builders) – Housing and Interest Rate Forecast, February 2025
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Mortgage Finance Forecasts Loan Originations1 ($’s in billions) Mortgage & Interest Rates1 1Source: Mortgage Bankers Association – MBA Mortgage Finance Forecast, January 2025 $1,239 $1,288 $1,392 $219 $491 $660 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 2023 2024e 2025e Purchase Refinance 7.3% 6.7% 6.5% 4.4% 4.4% 4.5% 2023 2024e 2025e 30-Year Fixed 10-Year Treasury
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RE/MAX Holdings, Inc. Agent Count and Revenue Excluding Marketing Funds 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 Net change in agent count compared to the prior period 1,144 1,941 255 (1,548) (474) 799 987 (491) (286) As of 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 (1) Non-GAAP measure. See the end of this presentation for definitions of non-GAAP measures. Three Months Ended December 31, 2024 2023 Year Ended December 31, 2024 2023
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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 % Footnote: (1) (2) (3) (4) (5) (6) (7) (8) Represents the settlements of certain industry class-action lawsuits. 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. Fair value adjustments to contingent consideration include amounts recognized for changes in the estimated fair value of the contingent consideration liabilities. 2024 2023 2024 2023 Three Months Ended December 31, Year Ended December 31, Change in estimated tax receivable agreement liability is a result of a valuation allowance on deferred tax assets recorded during 2024 and 2023. Other adjustments are primarily made up of employee retention related expenses from the Company’s CEO transition. Acquisition-related expense includes personnel, legal, accounting, advisory and consulting fees incurred in connection with acquisition activities and integration of acquired companies Non-GAAP measure. See the end of this presentation for definitions of non-GAAP measures 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. RE/MAX Holdings, Inc. Adjusted EBTIDA Reconciliation to Net Income (Reflects RE/MAX Holdings with 100% ownership of RMCO, LLC) $ in 000’s
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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 Footnote: (1) (2) (3) (4) (5) (6) (7) (8) (9) 2024 2023 2024 2023 Three Months Ended Year Ended December 31, December 31, Change in estimated tax receivable agreement liability is a result of a valuation allowance on deferred tax assets recorded during 2024 and 2023. Other adjustments are primarily made up of employee retention related expenses from the Company’s CEO transition. 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. Non-GAAP measure. See the end of this presentation for definitions of non-GAAP measures. Represents the settlements of certain industry class-action lawsuits. 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. Acquisition-related expense includes personnel, legal, accounting, advisory and consulting fees incurred in connection with acquisition activities and integration of acquired companies. Fair value adjustments to contingent consideration include amounts recognized for changes in the estimated fair value of the contingent consideration liabilities. 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. RE/MAX Holdings, Inc. Adjusted Net Income & Adjusted Earnings per Share (Reflects RE/MAX Holdings with 100% ownership of RMCO, LLC) $ in 000’s
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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% Footnote: (1) (2) Non-GAAP measure. See the end of this presentation for definitions of non-GAAP measures. Year Ended 2024 2023 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. December 31, RE/MAX Holdings, Inc. Adjusted Free Cash Flow & Unencumbered Cash Generation $ in 000’s
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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. 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 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.
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Non-GAAP Financial Measures (continued) 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 must 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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Thank You!