RE/MAX HOLDINGS, INC. REPORTS FIRST QUARTER 2025 RESULTS

Total Revenue of $74.5 Million, Adjusted EBITDA of $19.3 Million , /PRNewswire/ -- First Quarter 2025 Highlights(Compared to first quarter 2024 unless otherwise noted) Total Revenue decreased 4.9% to $74.5 million Revenue excluding the Marketing Funds1 decreased 4.3% to $55.6 million, driven by negative 3.2% organic growth2 and 1.1% adverse foreign currency movements Net loss attributable to RE/MAX Holdings, Inc. of $(2.0) million and loss per diluted share (GAAP EPS) of $(0.10) Adjusted EBITDA3 increased 1.5% to $19.3 million, Adjusted EBITDA margin3 of 25.9% and Adjusted earnings per diluted share (Adjusted EPS3) of $0.24 Total agent count increased 2.0% to 146,126 agents U.S. and Canada combined agent count decreased 5.0% to 75,010 agents Total open Motto Mortgage franchises decreased 7.8% to 224 offices4 RE/MAX Holdings, Inc. (the "Company" or "RE/MAX Holdings") (NYSE: RMAX), parent company of REMAX, 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 ended March 31, 2025. "For the fourth consecutive quarter, our company delivered solid profit and margin performance," said Erik Carlson, RE/MAX Holdings Chief Executive Officer. "We are continually elevating our value proposition, and this quarter we also introduced several new initiatives to help our affiliates win more listings, do so more efficiently, and profitably grow their businesses." Continued Carlson: "Some of our recently announced strategic programs include refreshed dynamic branding, expanded access to productivity-boosting agent education, a user-friendly social influencer platform, new marketing resources, a comprehensive global referral system, and an innovative onboarding program to attract and develop the next generation of top-producing REMAX agents called AspireSM. REMAX has trusted, productive professionals, and we continue to deliver modern, competitive advantages to set our network up to succeed." First Quarter 2025 Operating Results Agent Count The following table compares agent count as of March 31, 2025 and 2024: As of March 31, Change 2025 2024 # % U.S 49,854 53,919 (4,065) (7.5) Canada 25,156 25,036 120 0.5 Subtotal 75,010 78,955 (3,945) (5.0) Outside the U.S. & Canada 71,116 64,332 6,784 10.5 Total 146,126 143,287 2,839 2.0 Revenue RE/MAX Holdings generated revenue of $74.5 million in the first quarter of 2025, a decrease of $3.8 million, or 4.9%, compared to $78.3 million in the first quarter of 2024. Revenue excluding the Marketing Funds was $55.6 million in the first quarter of 2025, a decrease of $2.5 million, or 4.3%, versus the same period in 2024. The decrease in Revenue excluding the Marketing Funds was attributable to a decline in organic revenue of 3.2% and adverse foreign currency movements of 1.1%. The reduction in organic revenue was principally driven by a decrease in U.S. agent count, lower mortgage segment revenue, and a decline in revenue from previous acquisitions (excluding Independent Region acquisitions), partially offset by increased Broker Fees revenue. Recurring revenue streams, which consist of continuing franchise fees and annual dues, decreased $2.2 million, or 5.5%, compared to the first quarter of 2024 and accounted for 66.8% of Revenue excluding the Marketing Funds in the first quarter of 2025 compared to 67.7% of Revenue excluding the Marketing Funds in the prior-year period. Operating Expenses Total operating expenses were $69.1 million for the first quarter of 2025, a decrease of $4.7 million, or 6.3%, compared to $73.8 million in the first quarter of 2024. First quarter 2025 total operating expenses decreased primarily due to lower selling, operating and administrative and depreciation and amortization expenses, partially offset by higher settlement and impairment charges. Selling, operating and administrative expenses were $43.0 million in the first quarter of 2025, a decrease of $2.7 million, or 5.9%, compared to the first quarter of 2024 and represented 77.4% of Revenue excluding the Marketing Funds, compared to 78.7% in the prior-year period. First quarter 2025 selling, operating and administrative expenses decreased primarily due to a decrease in professional fees and certain personnel and events-related expenses, partially offset by higher equity-based compensation expenses and an increase in other technology expenses. Net Loss and GAAP EPS Net loss attributable to RE/MAX Holdings was $(2.0) million for the first quarter of 2025 compared to net loss of ($3.4) million for the first quarter of 2024. Reported basic and diluted GAAP loss per share were $(0.10) each for the first quarter of 2025 compared to basic and diluted GAAP loss per share of ($0.18) each in the first quarter of 2024. Adjusted EBITDA and Adjusted EPS Adjusted EBITDA was $19.3 million for the first quarter of 2025, an increase of $0.3 million, or 1.5%, compared to the first quarter of 2024. First quarter 2025 Adjusted EBITDA increased primarily due to an increase in revenue from Broker Fees and a decrease in professional fees and certain personnel and events-related expenses, partially offset by decreases in U.S. agent count and revenue from previous acquisitions (excluding Independent Region acquisitions), and an increase in other technology expenses. Adjusted EBITDA margin was 25.9% in the first quarter of 2025, compared to 24.3% in the first quarter of 2024. Adjusted basic and diluted EPS were $0.24 each for the first quarter of 2025 compared to Adjusted basic and diluted EPS of $0.20 each for the first quarter of 2024. The ownership structure used to calculate Adjusted basic and diluted EPS for the quarter ended March 31, 2025, assumes RE/MAX Holdings owned 100% of RMCO, LLC ("RMCO"). The weighted average ownership RE/MAX Holdings had in RMCO was 60.6% for the quarter ended March 31, 2025. Balance Sheet As of March 31, 2025, the Company had cash and cash equivalents of $89.1 million, a decrease of $7.5 million from December 31, 2024. As of March 31, 2025, the Company had $439.9 million of outstanding debt, net of an unamortized debt discount and issuance costs, compared to $440.8 million as of December 31, 2024. 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 March 31, 2025, the Company did not repurchase any shares. As of March 31, 2025, $62.5 million remained available under the share repurchase program. Outlook The Company's second quarter and full year 2025 Outlook assumes no further currency movements, acquisitions, or divestitures. For the second quarter of 2025, RE/MAX Holdings expects: Agent count to increase 1.5% to 2.5% over second quarter 2024; Revenue in a range of $70.0 million to $75.0 million (including revenue from the Marketing Funds in a range of $17.0 million to $19.0 million); and Adjusted EBITDA in a range of $22.5 million to $25.5 million. For the full year 2025, the Company 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, May 2, 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/Q4I941158632 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: 1Revenue 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 March 31, 2025 2024 Revenue excluding the Marketing Funds: Total revenue $ 74,467 $ 78,287 Less: Marketing Funds fees 18,864 20,206 Revenue excluding the Marketing Funds $ 55,603 $ 58,081 2The 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). 3Adjusted 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. 4Total 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 BranchiseSM 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 REMAX® brand, and mortgage brokerages within the U.S. under the Motto® Mortgage brand. REMAX 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 REMAX, as measured by total residential transaction sides. Dedicated to innovation and change in the real estate industry, RE/MAX Holdings 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; the Company's outlook for the second quarter and full year 2025; non-GAAP financial measures; housing and mortgage market conditions; operational efficiencies; new initiatives and strategic programs and the expected results thereof; and the Company's value proposition and competitive advantages. 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, including enacted and proposed tariffs and other trade policies which could impact the global economy, (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 March 31, 2025 2024 Revenue: Continuing franchise fees $ 29,351 $ 31,085 Annual dues 7,789 8,225 Broker fees 11,431 10,716 Marketing Funds fees 18,864 20,206 Franchise sales and other revenue 7,032 8,055 Total revenue 74,467 78,287 Operating expenses: Selling, operating and administrative expenses 43,028 45,705 Marketing Funds expenses 18,864 20,206 Depreciation and amortization 6,589 7,852 Settlement and impairment charges 619 — Total operating expenses 69,100 73,763 Operating income (loss) 5,367 4,524 Other expenses, net: Interest expense (7,924) (9,256) Interest income 908 1,001 Foreign currency transaction gains (losses) 283 (372) Total other expenses, net (6,733) (8,627) Income (loss) before provision for income taxes (1,366) (4,103) Provision for income taxes (1,870) (1,504) Net income (loss) $ (3,236) $ (5,607) Less: net income (loss) attributable to non-controlling interest (1,278) (2,254) Net income (loss) attributable to RE/MAX Holdings, Inc $ (1,958) $ (3,353) Net income (loss) attributable to RE/MAX Holdings, Inc. per shareof Class A common stock Basic $ (0.10) $ (0.18) Diluted $ (0.10) $ (0.18) Weighted average shares of Class A common stock outstanding Basic 19,292,210 18,481,848 Diluted 19,292,210 18,481,848 TABLE 2 RE/MAX Holdings, Inc Consolidated Balance Sheets (In thousands, except share and per share amounts) (Unaudited) As of March 31, December 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 89,107 $ 96,619 Restricted cash 77,799 72,668 Accounts and notes receivable, net of allowances 28,748 27,807 Income taxes receivable 7,207 7,592 Other current assets 11,759 13,825 Total current assets 214,620 218,511 Property and equipment, net of accumulated depreciation 7,085 7,578 Operating lease right of use assets 16,371 17,778 Franchise agreements, net 77,452 81,186 Other intangible assets, net 12,587 13,382 Goodwill 237,548 237,239 Income taxes receivable, net of current portion 355 355 Other assets, net of current portion 5,373 5,565 Total assets $ 571,391 $ 581,594 Liabilities and stockholders' equity (deficit) Current liabilities: Accounts payable $ 3,376 $ 5,761 Accrued liabilities 106,388 110,859 Income taxes payable 190 541 Deferred revenue 21,022 22,848 Debt 4,600 4,600 Payable pursuant to tax receivable agreements 779 1,537 Operating lease liabilities 8,747 8,556 Total current liabilities 145,102 154,702 Debt, net of current portion 435,305 436,243 Deferred tax liabilities 8,713 8,448 Deferred revenue, net of current portion 14,175 14,778 Operating lease liabilities, net of current portion 20,446 22,669 Other liabilities, net of current portion 3,173 3,148 Total liabilities 626,914 639,988 Commitments and contingencies Stockholders' equity (deficit): Class A common stock, par value $.0001 per share, 180,000,000 shares authorized; 19,906,921and 18,971,435 shares issued and outstanding as of March 31, 2025 and December 31, 2024,respectively 2 2 Class B common stock, par value $.0001 per share, 1,000 shares authorized; 1 share issuedand outstanding as of March 31, 2025 and December 31, 2024, respectively — — Additional paid-in capital 571,141 565,072 Accumulated deficit (136,008) (133,727) Accumulated other comprehensive income (deficit), net of tax (1,627) (1,864) Total stockholders' equity attributable to RE/MAX Holdings, Inc 433,508 429,483 Non-controlling interest (489,031) (487,877) Total stockholders' equity (deficit) (55,523) (58,394) Total liabilities and stockholders' equity (deficit) $ 571,391 $ 581,594 TABLE 3 RE/MAX Holdings, Inc Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three Months Ended March 31, 2025 2024 Cash flows from operating activities: Net income (loss) $ (3,236) $ (5,607) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 6,589 7,852 Equity-based compensation expense 6,346 5,923 Bad debt expense 1,592 1,314 Deferred income tax expense (benefit) 223 (202) Fair value adjustments to contingent consideration 116 34 Settlement and impairment charges 619 — Non-cash lease benefit (768) (705) Non-cash debt charges 212 215 Other, net 243 (5) Changes in operating assets and liabilities (6,275) 562 Net cash provided by operating activities 5,661 9,381 Cash flows from investing activities: Purchases of property, equipment, and capitalization of software (1,691) (2,619) Other — 189 Net cash used in investing activities (1,691) (2,430) Cash flows from financing activities: Payments on debt (1,150) (1,150) Dividends and dividend equivalents paid to Class A common stockholders (324) (585) Payments related to tax withholding for share-based compensation (4,237) (2,498) Payment of contingent consideration (791) (120) Other financing (29) — Net cash used in financing activities (6,531) (4,353) Effect of exchange rate changes on cash 180 (925) Net (decrease) increase in cash, cash equivalents and restricted cash (2,381) 1,673 Cash, cash equivalents and restricted cash, beginning of period 169,287 125,763 Cash, cash equivalents and restricted cash, end of period $ 166,906 $ 127,436 TABLE 4 RE/MAX Holdings, Inc Agent Count (Unaudited) As of March 31, December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, 2025 2024 2024 2024 2024 2023 2023 2023 2023 Agent Count: U.S Company-Owned Regions 43,543 44,911 46,283 46,780 47,302 48,401 49,576 50,011 50,340 Independent Regions 6,311 6,375 6,525 6,626 6,617 6,730 6,918 6,976 7,110 U.S. Total 49,854 51,286 52,808 53,406 53,919 55,131 56,494 56,987 57,450 Canada Company-Owned Regions 20,227 20,311 20,515 20,347 20,151 20,270 20,389 20,354 20,172 Independent Regions 4,929 4,860 4,878 4,846 4,885 4,898 4,899 4,864 4,899 Canada Total 25,156 25,171 25,393 25,193 25,036 25,168 25,288 25,218 25,071 U.S. and Canada Total 75,010 76,457 78,201 78,599 78,955 80,299 81,782 82,205 82,521 Outside U.S. and Canada Independent Regions 71,116 70,170 67,282 64,943 64,332 64,536 63,527 62,305 61,002 Outside U.S. and Canada Total 71,116 70,170 67,282 64,943 64,332 64,536 63,527 62,305 61,002 Total 146,126 146,627 145,483 143,542 143,287 144,835 145,309 144,510 143,523 TABLE 5 RE/MAX Holdings, Inc Adjusted EBITDA Reconciliation to Net Income (Loss) (In thousands, except percentages) (Unaudited) Three Months Ended March 31, 2025 2024 Net income (loss) $ (3,236) $ (5,607) Depreciation and amortization 6,589 7,852 Interest expense 7,924 9,256 Interest income (908) (1,001) Provision for income taxes 1,870 1,504 EBITDA 12,239 12,004 Settlement and impairment charges (1) 619 — Equity-based compensation expense 6,346 5,923 Fair value adjustments to contingent consideration (2) 116 34 Other adjustments (3) (33) 1,032 Adjusted EBITDA (4) $ 19,287 $ 18,993 Adjusted EBITDA Margin (4) 25.9 % 24.3 % (1) Represents the settlement of an immaterial legal matter and an impairment recognized on an office lease in Canada in the first quarter of 2025. (2) Fair value adjustments to contingent consideration include amounts recognized for changes in the estimated fair value of the contingent consideration liabilities. (3) Other adjustments are primarily made up of employee retention-related expenses from the Company's CEO transition in the prior year and expenses related to prior period organizational restructuring. (4) 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 March 31, 2025 2024 Net income (loss) $ (3,236) $ (5,607) Amortization of acquired intangible assets 4,384 5,470 Provision for income taxes 1,870 1,504 Add-backs: Settlement and impairment charges (1) 619 — Equity-based compensation expense 6,346 5,923 Fair value adjustments to contingent consideration (2) 116 34 Other adjustments (3) (33) 1,032 Adjusted pre-tax net income 10,066 8,356 Less: Provision for income taxes at 25% (4) (2,517) (2,089) Adjusted net income (5) $ 7,549 $ 6,267 Total basic pro forma shares outstanding 31,851,810 31,041,448 Total diluted pro forma shares outstanding 31,851,810 31,041,448 Adjusted net income basic earnings per share (5) $ 0.24 $ 0.20 Adjusted net income diluted earnings per share (5) $ 0.24 $ 0.20 (1) Represents the settlement of an immaterial legal matter and an impairment recognized on an office lease in Canada in the first quarter of 2025. (2) Fair value adjustments to contingent consideration include amounts recognized for changes in the estimated fair value of the contingent consideration liabilities. (3) Other adjustments are primarily made up of employee retention-related expenses from the Company's CEO transition in the prior year and expenses related to prior period organizational restructuring. (4) 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. (5) 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 March 31, 2025 2024 Total basic weighted average shares outstanding: Weighted average shares of Class A common stock outstanding 19,292,210 18,481,848 Remaining equivalent weighted average shares of stock outstanding on a proforma basis assuming RE/MAX Holdings owned 100% of RMCO 12,559,600 12,559,600 Total basic pro forma weighted average shares outstanding 31,851,810 31,041,448 Total diluted weighted average shares outstanding: Weighted average shares of Class A common stock outstanding 19,292,210 18,481,848 Remaining equivalent weighted average shares of stock outstanding on a proforma basis assuming RE/MAX Holdings owned 100% of RMCO 12,559,600 12,559,600 Dilutive effect of unvested restricted stock units (1) — — Total diluted pro forma weighted average shares outstanding 31,851,810 31,041,448 (1) In accordance with the treasury stock method. TABLE 8 RE/MAX Holdings, Inc. Adjusted Free Cash Flow & Unencumbered Cash (Unaudited) Three Months Ended March 31, 2025 2024 Cash flow from operations $ 5,661 $ 9,381 Less: Purchases of property, equipment, and capitalization of software (1,691) (2,619) (Increases) decreases in restricted cash of the Marketing Funds (1) (5,131) (2,219) Adjusted free cash flow (2) (1,161) 4,543 Adjusted free cash flow (2) (1,161) 4,543 Less: Tax/Other non-dividend distributions to RIHI — — Adjusted free cash flow after tax/non-dividend distributions to RIHI (2) (1,161) 4,543 Adjusted free cash flow after tax/non-dividend distributions to RIHI (2) (1,161) 4,543 Less: Debt principal payments (1,150) (1,150) Unencumbered cash generated (2) $ (2,311) $ 3,393 Summary Cash flow from operations $ 5,661 $ 9,381 Adjusted free cash flow (2) $ (1,161) $ 4,543 Adjusted free cash flow after tax/non-dividend distributions to RIHI (2) $ (1,161) $ 4,543 Unencumbered cash generated (2) $ (2,311) $ 3,393 Adjusted EBITDA (2) $ 19,287 $ 18,993 Adjusted free cash flow as % of Adjusted EBITDA (2) (6.0) % 23.9 % Adjusted free cash flow less distributions to RIHI as % of Adjusted EBITDA (2) (6.0) % 23.9 % Unencumbered cash generated as % of Adjusted EBITDA (2) (12.0) % 17.9 % (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 (loss), 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 (loss) is calculated as Net income (loss) 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 (loss) (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 (loss) 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, Inc. ("RIHI"), an entity majority owned and controlled by David Liniger, our Chairman and Co-Founder, and by Gail Liniger, our Vice Chair Emerita and Co-Founder, 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. SOURCE RE/MAX Holdings, Inc. WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

RE/MAX HOLDINGS, INC. REPORTS FIRST QUARTER 2025 RESULTS

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