Good morning, and welcome to the RE/MAX Holdings Third Quarter 2025 Earnings Conference Call and webcast. My name is Colby, and I'll be facilitating the audio portion of today's call. At this time, I would like to turn the call over to Joe Schwartz, Senior Vice President of Finance and Investor Relations. Mr. Schwartz. Thank you, Operator. Good morning, everyone, and welcome to RE/MAX Holdings Third Quarter 2025 Earnings Conference Call. Please visit the investor relations section of www.remaxholdings.com for all earnings-related materials, including our standard earnings presentation, and to access the live webcast and replay of the call today. Our prepared remarks and answers to your questions in today's call may contain forward-looking statements. Forward-looking statements include those related to agent count, franchise sales and open offices, financial measures and outlook, brand expansion, competition, technology, housing and mortgage market conditions, capital allocation, credit facility, dividends, share repurchases, litigation settlements, strategic and operational plans, and business models. Forward-looking statements represent management's current estimates. RE/MAX Holdings assumes no obligation to update any forward-looking statements in the future. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ materially from those projected in forward-looking statements. These are discussed in our third quarter 2025 financial results press release and other SEC filings. Also, we will refer to certain non-GAAP measures in today's call. Please see the definitions and reconciliations of non-GAAP measures contained in our most recent quarterly financial results press release, which is available on our website. Joining me on our call today are Erik Carlson, our Chief Executive Officer, and Karri Callahan, our Chief Financial Officer. With that, I'd like to turn the call over to them. Erik? Thank you, Joe, and thanks to everyone for joining us this morning. We're pleased that the momentum we've built in the first half of the year continued into the third quarter. Our total RE/MAX agent count reached another all-time high, fueled by steady global growth and our best third quarter U.S. agent count performance in three years. Based on feedback from the membership, we believe our mix of new ideas and products, along with our reinvigorated recent network events, are enhancing our value proposition and generating great energy. At the same time, our constant focus on operational excellence again drove profitability and margin performance that exceeded our expectations. While existing home sales have yet to show sustained signs of recovery, our networks continue to perform resiliently. From a macro perspective, the trends we saw in our RE/MAX national housing report earlier in the year continued in September, as inventory increased 20% over September 2024, marking the 21st consecutive month of year-over-year growth. Additionally, new listings, which had slowed some over the summer, rebounded in September, growing 4.5% over August. We believe these sustained increases are constructive for housing and will help support increased transaction activity. However, affordability remains a challenge, particularly at the lower price points. Further downward movement in mortgage rates would be welcome news. From an industry perspective, this year has seen consolidation activity on both a large and small scale. Given existing industry dynamics, we believe the current state of change creates exciting opportunities for our company and networks. We continue to have a robust franchise sales and conversion pipeline and are building on the momentum of recent additions, including RE/MAX Hawaii, which catapulted RE/MAX to a number two market share position in the state. This momentum is bolstered by our innovations and ongoing enhancements to our value proposition, which have spurred a lot of excitement throughout our networks and the industry. I've never felt more positive about what lies ahead for our company, and we're going to continue to evaluate all opportunities to drive enhanced value for all of our stakeholders. As of September 30th, our worldwide agent count of over 147,500 agents was another record high, and U.S. agent count at its best third quarter in three years. Although we're not where we want to be, the underlying agent fundamentals are encouraging. We said last quarter that May and June were the first two months of the year where our agent recruitment rate increased year-over-year. This positive momentum carried into Q3, where the recruitment rate for each month of the quarter was higher than last year. Producing agents continued to be drawn to RE/MAX, and the quality of our network was reflected in the recently released 2025 Real Trends Verified City Rankings, where we had more agents represented than any other brand. Although Canadian agent count was down slightly year-over-year, we saw modest sequential growth despite a continued challenging housing backdrop. We appreciate that being a broker and an agent is difficult in this market, and historically we know that the number of producing agents in the industry tends to correlate with the level of existing home sales. We're encouraged by the results in both the U.S. and Canada, given the current state of the markets, and our international agent count continues to be a bright spot, surpassing 73,000 agents. Momentum in agent recruiting has been fueled by many of our ongoing initiatives. Our Aspire program continues to be a success, with approximately 1,500 agents benefiting from the program. Although it's still early, Aspire is performing as intended, with an uptick in the recruitment of newer agents and a higher retention rate. Building on the strong reception and feedback from the network on Aspire and leveraging our voice of customer capabilities, we've introduced the Ascend and Appreciate programs in September. These optional economic models offer greater flexibility with respect to how and when a franchisee pays us, further supporting their ability to attract and retain quality agents. While these programs are new, the feedback from the network has been very positive. In addition to providing flexibility with respect to our economic models, we continue to lean heavily into innovation to deliver an elevated experience to all of our affiliates and the consumers they serve. Many of our new offerings, like the recently launched RE/MAX Marketing as a Service platform, leverage the strength of our scale to create new competitive advantages. The platform is a data-driven, AI-powered system that simplifies marketing for all of our affiliates. The offerings include automated listing packages, complimentary and paid campaign options, real-time analytics, and property videos created seamlessly with AI. We'll continue to add innovative products to the platform, all of which are designed to help agents save time, win more listings, and grow their business. This marketing approach is a strategic shift as we're consolidating fragmented efforts into one seamless experience. Although we're just getting started, the initial click-through rates and engagement results are very promising. We're seeing both the number of orders and users increase each week, and the current weekly order value is indicative of a low seven-figure annual run rate. Notably, we are planning to expand the platform into some international geographies outside of the U.S. and Canada, marking a tangible step to capitalize on the scale of our worldwide footprint, enhance the value proposition globally, and diversify our revenue streams. In addition, we continue to innovate on the exciting initiatives we launched last year, leveraging our digital assets. Our Lead Concierge program has been outperforming expectations this year, and we continue to evaluate and add new lead sources. The RE/MAX Media Network is on track with our revised expectations, and we anticipate it will have a seven-digit revenue contribution by the end of 2025. We remain optimistic about the long-term potential of these initiatives. Our story is being told loudly and proudly through the voices of our franchisees and agents, both online and offline. Whether agents are leveraging our Max Engage platform or other mediums, our momentum continues to build. Throughout our many events over the past several months, excitement and a feeling that something is different about RE/MAX has emerged as a constant theme. That excitement is carried forward in our ability to recruit top industry talent to our executive team. We're thrilled to have Vic Lombardo on board as our new president of mortgage services. In his role, Vic will oversee the growth of our mortgage business, including Motto Mortgage, Wemlo, and future evolutions designed to grow our mortgage offerings. In Vic's first two months, he's rolled up his sleeves, dug into the operations, surfacing a number of innovative ideas to drive growth and add additional revenue streams and increase the operational efficiency. We're already putting foundational pieces in place, and we look forward to sharing more details on our strategy in February. While the mortgage market remains challenging, we've seen a modest uptick in refi volumes in the last couple of months. Our franchisees and LOs continue to persevere, and we're optimistic about the growth potential for our mortgage business. In addition to Vic, Tom Flanagan, our new Chief Digital Information Officer, joined us at the end of September. Tom, a member of the 2025 Swanepoel Power 200, is a great cultural fit, and his impressive track record includes 20 years as a real estate innovator and executive in leadership roles covering both technology and marketing. Tom is leaning into the potential of AI, both to improve the customer experience and to make us more efficient in our day-to-day operations. Not only is he an industry-leading technologist, but his experience in ancillary businesses will also be a great asset as we continue to explore future growth strategies. As we look to the future, we continue to lean in our networks and build on our momentum. We're focused on the tremendous opportunities that lie ahead for us, and with a world-class leadership team now in place, we believe we're well-positioned for growth in the current environment. We're focused on what matters: continuing to grow our RE/MAX agent count, especially in the U.S. and Canada, enhance and expand our value proposition, focus on improving our customer experience, grow our mortgage business, and concurrently diversify our top-line drivers as we execute with excellence across our brands. As we move into the last couple of months of the year and prepare for 2026, I want to emphasize that we're in a new era, one defined by clarity, purpose, and action. With that, I'll hand it over to Karri. Thank you, Erik. Good morning, everyone. As Erik mentioned, we are pleased with our third quarter operational results and overall financial performance. Our third quarter profit came in at the high end of our expectations, and our top-line results were solid despite a housing market that continues to be slower than anticipated, highlighting the resilience of our financial model. Some of our notable quarterly financial highlights included total revenue of $73.3 million, adjusted EBITDA of $25.8 million, adjusted EBITDA margin of 35.2%, an increase of 40 basis points over the third quarter of 2024, and adjusted diluted EPS of $0.37. Looking closer at revenue, excluding the marketing funds, revenue was $55.1 million, a decrease of 5.6% compared to the same period last year, driven by a decline in organic revenue of 5.4% and adverse foreign currency movements of 0.2%. The decline in organic growth was principally due to lower U.S. agent count and, to a lesser degree, certain incentives related to modifications to the company's standard fee models, including our Aspire program. This decrease was partially offset by contributions from our marketing services, including our Lead Concierge and RE/MAX Media Network initiatives. As mentioned, margin performance improved thanks to our focus on ongoing operational efficiencies. Third quarter selling, operating, and administrative expenses decreased $3.5 million, or 9.7%, to $32.5 million. This reduction was primarily due to certain lower personnel and events expenses, partially offset by higher investments in technology and our flagship website, and increased bad debt and legal fees. Despite the challenging broader macro and housing environment, our ongoing evaluation of every aspect of our business is paying off. The cash-generative nature of our business converted approximately 60% of adjusted EBITDA to adjusted free cash flow this quarter, and our total leverage ratio decreased to 3.41x as of September 30th. Importantly, our total leverage ratio is now below the 3.5x level at which we are afforded greater flexibility from a capital allocation perspective, and we expect to remain below the 3.5x level at the end of the year. From a capital allocation perspective, our priorities remain unchanged. We are strategically reinvesting in the business and will continue to build our cash reserves. We also believe that we can now evaluate returning capital to shareholders because, at the current price, repurchasing our shares is an attractive use of capital. Now, onto our guidance. We are pleased with our Q3 financial performance and are encouraged by the growing excitement from our network and early returns from our initiatives. However, we remain pragmatic about the realities of the current housing market and continued uncertainties in the broader macro-economic environment. As a result, we are tightening the top end of our full-year revenue and adjusted EBITDA ranges. Our fourth quarter and full-year 2025 outlook assumes no further currency movements, acquisitions, or divestitures. For the fourth quarter of 2025, we expect agent count to increase 0% to 1.5% over fourth quarter 2024, revenue in a range of $69.5 million- $73.5 million, including revenue from the marketing funds in a range of $17 million- $19 million, and adjusted EBITDA in a range of $19 million- $23 million. For the full-year 2025, we now expect agent count to increase 0% to 1.5% over full-year 2024, revenue in a range of $290 million- $294 million, including revenue from the marketing funds in a range of $72 million- $74 million, a change from $290 million to $296 million, and adjusted EBITDA in a range of $90 million- $94 million, a change from $90 million to $95 million. With that, operator, let's open it up for questions. Thank you. We will now begin the question and answer session. If you'd like to ask a question, please press star then the number one on your telephone keypad to raise your hand and enter the queue. If you'd like to withdraw your question at any time, simply press star one again. Thank you. Your first question comes from the line of Anthony Paolone with JP Morgan. Your line is open. Great. Thanks. Good morning. Erik, I think you mentioned there were two programs. You talked about seven-figure contributions potentially. I think it was marketing and maybe it was Aspire, but I was wondering if maybe you can give a little bit more color around. Can we expect to see that level of incremental revenue in 2026? Maybe what would the margin perhaps look like, or just a bit more detail on what that trajectory might be. Yeah. Certainly, Tony. Thanks for being on today. A couple of things. We're talking about is, as you know, over the past four, six quarters, we've really been talking about bringing more value to the network and helping them win more business, do it in less time, and bring some profitability back to brokerages and help agents make a little bit more money. Part of that is our marketing efforts that we rolled out about, I don't know, eight or 10 weeks ago. We're seeing really good engagement on our Marketing as a Service platform. That's one of the platforms that we talked about being a seven-digit revenue opportunity. That certainly is continuing to grow. We're seeing great response, engagement, usage. I think the most important thing, Tony, is it's actually working, right? When you think about the marketing of a listing or an open house or just marketing in general, it's good to see that engagement and that return. We're seeing customers come to our site. We're seeing higher engagement with properties. We're seeing more customers wanting to click through and grab an agent. All these things are good to help our folks kind of win listings. Really, it's a spend that's happening kind of in the market, but in a disaggregated way. What we've done is created a platform through process, technology, and AI to help that spend, one, to lower the cost for agents, but also to be more effective in the marketplace. We think that's a big opportunity, not only in the U.S. and Canada where it's deployed today, but also internationally. We're working on several markets in the fourth quarter to start that rollout to help monetize that international opportunity that you all have so politely pointed out to me many times in the past. In addition, we have the RE/MAX Media Network, which we've spoken about a bit in the past. Part of, obviously, Marketing as a Service is help driving traffic to the website. I will tell you that we're building the plumbing. We've got good infrastructure in place. I think closer to the end of the year, you'll see kind of a new approach for us on.com and.ca. Advertisers are liking what they're seeing. We have work to do, but they're seeing good engagement with their products. We're seeing good engagement from consumers when they have an ad kind of on a site that helps our brand, helps their experience. We're working through kind of the foundational aspects of the program, but that definitely is a seven-digit figure in 2025. It will continue to grow in 2026 and beyond. Yeah, Tony, one thing that I would add in addition to everything that Erik said from a strategic perspective, because we are really excited about the engagement that we're seeing from a Marketing as a Service perspective, the margin profile from just a financial standpoint does look a little bit different than our core business. Kind of looking in that high single-digit, low double-digit margin contribution perspective. With all of that said, we just think there's tremendous opportunity in terms of driving the top line from that perspective, just given the engagement we've seen from the network and the overall performance with consumers who have interacted with the product over the last couple of months. Okay. Tony, on the RMN side, the margin profile will be different too. It'll be higher than our normal margin profile. I see. Okay. Just one other one. On M&A and the sector in general, can you give us any thoughts on where you stand there and also whether or not that has any implications on, you mentioned, your recruitment rate and whether you're seeing people move around as a result of M&A in the space? Yeah. Great question. I think last time we talked about us building momentum within our network and really being focused on our strategy and our value proposition. We're seeing great enthusiasm from the network right now. In my opening remarks, we talked a little bit about some of the events, the last five, six events since the last time we spoke, have been categorized from the network as best event ever, which is really encouraging, meaning the way we're showing up, the tools, the services, the engagement we're providing is resonating with the network. That, along with some of the programs, whether it's Marketing as a Service or some of the new economic models, whether that's Aspire, Ascend, or Appreciate, they're resonating. We're seeing good engagement levels there, and we're seeing good recruitment rates through the Aspire program. With all that being said, there will be continued consolidation in the market. Obviously, since the last time we spoke, there's been a big announcement. We think that just brings additional opportunity for us and could help accelerate our strategy. Obviously, we're open for business. We are seeing a lot of inbound requests, meaning, "Hey, something's happening over at RE/MAX. What is that? I want to talk more about that." Maybe I've got a contract up. Maybe I'm independent, feeling pressure. We are definitely seeing a lot more inbound activity here, which is very encouraging for our franchise sales and our network to capitalize on maybe some of the market conditions, but also just the opportunity on what we've built to join this momentum that we've got on the market right now. Okay, thank you. Your next question comes from the line of Nick McAndrew with Zelman. Your line is open. Hey, guys. Thanks for taking my questions. Erik, maybe one for you to start, I think, just with Aspire, Ascend, and Appreciate now live. Could you maybe just walk through what type of agent you're trying to attract with kind of each of those models and maybe just how franchisees are thinking about those optional models in practice? I mean, are most rolling them out selectively for recruiting or for the existing agent base they already have? If you could just add any color there, that'd be helpful. Thank you. Yeah. Sure thing, Nick. Thanks for the question. A couple of things. One is, as I just mentioned, I think that the models and just the idea that there's choice is resonating with the network. Obviously, brokerages and agents, independent operators, and they have to make the best decision for themselves. I think in the last call, we talked about a little on Aspire, about 2/3 of the folks have joined or are participating. I think the important thing that we're seeing, and by the way, it's still a little bit new, is that there are some positive green shoots, meaning Aspire has not taken away from any of the existing recruitment that we are doing organically for kind of highly professional, productive, more tenured agents. Aspire generally has been seen as kind of incremental. The other great thing that we're seeing is Aspire is definitely coming with higher retention rates than what we previously saw. I think the idea that we've coupled education, kind of a formalized program, and learning technology in order to become a productive professional agent and take some burden off the broker is really helping with that retention rate for agents. We're hoping here in the next two quarters that we'll see that productivity follow. We've got a tried-and-true partnership with the Buffini Group on 100 Days to Greatness, and if those averages play out, we certainly think that we'll have additional productive agents kind of in that network within that 12-month timeframe. Appreciate's a little bit different. Appreciate's really about retirement. Obviously, we've got real estate agents who enjoy retirement through this profession. We want to make sure that there's a place where they can stay at an affordable rate and still capitalize on their book of business, but no, they may not be as productive as they once were kind of in their heyday. We're seeing some adoption of Appreciate. Obviously, that's a program that takes a little bit more time for the funnel to fill as folks tend to have a desire to roll off. On Ascend, we're seeing decent adoption on Ascend for those folks that want to take advantage of a model which provides a lower fixed fee and a higher variable rate. I think part of Ascend for me is also kind of putting our money where our mouth is, meaning we have to be in the business of helping folks win business. That can be leads generated from our website. That can be other sources. That can be on our.com, I mean, a whole different variety. What we're now showing to the network is we're in it with you, right? We'll take some risk on the financial side, but we're going to help you as an agent and a broker to build your business. I think that stance alone has really resonated with a lot of the network. It's just really a philosophy of us leaning in to help support their business. Got it. Yeah, that makes a lot of sense. Thanks, Erik. I guess just to follow up, I think just given all of the investment in digital tools and marketing capabilities this year, whether it's Lead Concierge or the new Marketing as a Service platform, do you have any sense for just whether you're seeing any tangible uptick in productivity of agents or offices that are more actively engaged with these platforms versus those that aren't? Look, I think it's a long sales cycle. Some days you wish you were kind of like a consumer goods company and just selling a bar of soap, but that's not the case. What I said before, Nick, and I think is helpful, is we're seeing additional engagement on listings, right? When you see that type of an activity, that will lend itself to, I think, our team winning more business, and that will help improve productivity. When you roll out programs like these, like increased marketing or Lead Concierge, with our sales cycle, it takes a while to actually see the results. When you set out and you say, "Hey, these are a few things that I'd like to see initially to make sure that the program is kickstarted in the right way," we're seeing all those green shoots, and we're seeing it actually exceed our expectations. We're really optimistic on the work that we've done, which is very purposeful investments, one, not only to help our agents and our brokers, but also to start to tell a different story about revenue diversification for our enterprise. We're really happy with the progress we've made, and we're excited about the reaction from the network and the usage of the tools. Great. Thanks, guys. Your next question comes from the line of Matthew Erdner with JonesTrading. Your line is open. Hey, good morning, guys. Thanks for taking the question. I'd like to kind of shift gears and talk about Motto a little bit. You guys touched on some of the initiatives that you're doing there, but I'd kind of like to get your guys' sense a little more in-depth of kind of the changes you're making there and get an idea of the profitability and if it's not profitable, kind of that outlook towards profitability. Thanks. Yeah. Great question. I think I led you down a path with my opening remarks that we talk more about it in February, but let me give you a little bit of color right now. One is we've, over the past six to 10 weeks since Vic arrived, really taken a new view of the mortgage opportunity. That includes not only Motto and our processing group, which we think that there's opportunities there to do a little bit about what we've done in real estate, quite honestly, and change the model to be a little bit less fixed and more variable. We've got to be in a position to help our network and our LOs really find business and capitalize on business, which not only helps the profitability of their business, but the value of owning a Motto franchise and our value proposition, quite frankly. It's a little early, Matt, to actually kind of go through some of the specifics. What I would tell you is we've got a new outlook not only on the franchise business, but just capitalizing on the mortgage opportunity in general based on the number of transactions, connections with both consumers, agents, brokers, and the footprint that we have, both in the U.S., Canada, etc. We're really excited about some of the items that we're working on right now, but it's just a bit early to talk through the strategy with y'all. Got it. I appreciate that. As a follow-up to that, how do you guys plan on leveraging that agent network that you guys do have, given that you guys are up there pretty much every year in terms of transaction size? The opportunity there is pretty large. Yeah. I mean, I think you're seeing us lean in in a variety of different places. Whether that's providing services like the Marketing as a Service platform, which not only kind of improves agent execution on marketing at a lower price point, but also helps us to obviously improve the monetization event through either the agent or the consumer. The RE/MAX Media Network is a perfect example. Lead Concierge is an example. Obviously, some of the high-level hints that I provided to you on mortgage are also examples. You're just seeing us lean into our business and really think about what else can happen through the agent or the consumer transaction. I think that the other item we're really working on is what happens post-close. I come from a place where we were dead set focused on the consumer experience, and we are focused here on the customer experience for brokers, agents, and that end buyer or seller to improve that not only before the transaction and when they're shopping or researching a particular property or an agent or a brokerage, but also during the transaction to make it as easy as possible to do business with us and our network. Also, to make sure that we're nurturing those folks post-close in a value-added way, not just an email once a month, but making sure that it's meaningful to help them with their home buying and home ownership experience. Got it. That's very helpful. Thank you, guys. Your next question comes from the line of Tommy McJoynt with KBW. The line is open. Hey, good morning, guys. Thanks for taking our questions. The first one is just around, you guys called out the organic revenue impacts as facing some impact from the modifications to the standard fee model. Do you guys want to be able to put some magnitude around that number? Should we think about that as sort of run rating, or does it lap after a year? How should we think about that? Hey, good morning, Tommy. Great question. I think, as Erik said, we're really excited about the Aspire program. It's really driving the benefits that we had hoped for in terms of increased recruitment rates for newer agents. We're seeing a churn decline in that cohort as well. We knew from the very beginning that there would be a little bit of an upfront investment as those agents came on board, got trained up, and then started to produce transactions. We do think it is a little bit of a short-term investment cycle because as those agents continue to get ingrained in our tools and services, start leveraging Marketing as a Service, really lean into our education, and become the trusted professional that is the hallmark of the RE/MAX brand, we think that that will dissipate over time. It was just a little bit of a near-term headwind as they're onboarded. Erik mentioned it's about 1,500 agents, and that's the quantification. We think it is near-term in nature, and we absolutely think it was a prudent choice because, as Erik said, we're really trying to partner with our franchisees, help them build their businesses, and help us really create that flywheel for agents to participate in the other tools and services that we're offering holistically from a brand perspective. Okay. Thanks. In the sort of capital allocation priorities, returning capital through buybacks has been on the list, but toward the lower end for a while now. I guess, is anything different now that would make you guys more interested in buying back shares now? Should we expect to see some buybacks by year-end? Any more commentary around that? Yeah. It's a great question. I think the biggest thing from our perspective right now that was great to see this quarter is we've done a very good job from a deleverage perspective. Our TLR is now below that 3.5x level, so we do have some more flexibility. From a capital allocation perspective, we're continuing to allocate or evaluate all of those options where we think that we're going to allocate capital to the areas where we'll get the highest returns. There's a lot of things going on right now from a strategic perspective in terms of the additional value and services and initiatives that are ongoing. Obviously now with that deleverage, we'd like to get down a little lower, but below that 3.5x. Given where we're trading, we think that returning capital is a great use of capital and more to come. Thanks. Thank you. With no further questions in queue, I'd like to turn the conference back over to Joe Schwartz for any closing comments. Thank you, Operator. That concludes today's call. Thank you all for joining us today. This concludes today's conference call. You may now disconnect.