Real estate franchise company RE/MAX (NYSE:RMAX) announced better-than-expected revenue in Q1 CY2025, but sales fell by 4.9% year on year to $74.47 million. Revenue guidance for the full year exceeded analysts’ estimates, but next quarter’s guidance of $72.5 million was less impressive, coming in 1.9% below expectations. Its non-GAAP profit of $0.24 per share was 35.2% above analysts’ consensus estimates.
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RE/MAX (RMAX) Q1 CY2025 Highlights:
- Revenue: $74.47 million vs analyst estimates of $73.53 million (4.9% year-on-year decline, 1.3% beat)
- Adjusted EPS: $0.24 vs analyst estimates of $0.18 (35.2% beat)
- Adjusted EBITDA: $19.29 million vs analyst estimates of $17.62 million (25.9% margin, 9.5% beat)
- The company reconfirmed its revenue guidance for the full year of $300 million at the midpoint
- EBITDA guidance for the full year is $95 million at the midpoint, in line with analyst expectations
- Operating Margin: 7.2%, up from 5.8% in the same quarter last year
- Free Cash Flow was -$1.16 million, down from $4.54 million in the same quarter last year
- Agents: 146,126, up 2,839 year on year
- Market Capitalization: $155.3 million
StockStory’s Take
RE/MAX’s first quarter results reflected higher than anticipated margin and profit performance, with management crediting ongoing operational discipline and a strategic focus on cost control. CEO Erik Carlson emphasized investments in new agent education and marketing technology, noting that recent product rollouts—including refreshed branding and agent tools—are designed to enhance the company’s value proposition and support long-term growth. CFO Karri Callahan highlighted the company’s ability to deliver improved margins through disciplined expense management, despite a challenging real estate market.
Looking ahead, RE/MAX’s leadership maintained full-year revenue guidance above Wall Street expectations and expects agent-focused initiatives such as the Aspire onboarding program to help stabilize and eventually grow agent count. However, management acknowledged continued macroeconomic uncertainty, particularly in the U.S. housing and mortgage sectors, which may affect the pace of recovery. As Carlson explained, “2025 is a year of transition, continued building, innovation, evolution, and execution,” with an emphasis on expanding and modernizing the company’s products and services.
Key Insights from Management’s Remarks
Management attributed the quarter’s results to ongoing cost discipline and the rollout of several strategic initiatives targeting agent productivity and recruitment. These efforts aim to position RE/MAX for future growth, even as the broader real estate market remains pressured by macroeconomic challenges.
- Agent-Focused Initiatives: The launch of the Aspire onboarding program, combining education, technology, and financial incentives, is intended to attract and support new agents while reducing early attrition. Management described early adoption as better than expected, with the program viewed as a step toward greater model flexibility.
- Brand and Digital Refresh: A refreshed RE/MAX logo and balloon branding, alongside digital tools like MAX/Engage and AI-powered features, are being introduced to strengthen the brand’s online presence and support agent marketing efforts. These updates seek to address shifting consumer behaviors and the growing importance of digital engagement in real estate transactions.
- International Agent Growth: RE/MAX reported notable agent count growth outside the U.S., especially in markets like South America and Portugal. Management attributed this to strong local operators and brand momentum, as well as tailored technology and marketing offerings for international affiliates.
- Operational Efficiencies: The company achieved margin improvements through ongoing expense reductions, especially in professional fees and personnel costs. Callahan noted that this cultural shift toward cost management has become ingrained over the last 12–18 months.
- Mortgage Segment Headwinds: The mortgage segment, including Motto and wemlo, continued to face challenges from a tough macro environment. However, recent franchise renewals and high event attendance were cited as signs of underlying resiliency, with management expecting gradual improvement as market conditions stabilize.
Drivers of Future Performance
Management’s outlook for the year centers on leveraging new agent tools, disciplined expense management, and international expansion to offset ongoing macro headwinds in the U.S. housing market. Strategic investments in technology and agent support are expected to foster gradual improvement in agent count and profitability.
- Agent Recruitment and Retention: The Aspire program and related onboarding initiatives are seen as critical to stabilizing and eventually growing agent count, with management aiming to lower early-stage agent churn and enhance productivity.
- Digital and Brand Modernization: Continued investment in digital marketing tools and brand updates is expected to help agents compete more effectively, especially as more homebuyers begin their search online.
- International Expansion: Growth in agent count abroad remains a priority, supported by localized technology offerings and marketing platforms. Management believes international markets present meaningful long-term opportunities for both revenue and profitability.
Top Analyst Questions
- Anthony Paolone (JP Morgan): Asked about franchise sales declines and whether new initiatives might pressure this line. Management cited wind-down of legacy tech acquisitions and emphasized potential of new ancillary revenue streams like RE/MAX Media Network.
- Nick McAndrew (Zelman): Queried competitive positioning of Aspire and its ability to attract agents from cap-based models. CEO Carlson highlighted Aspire’s flexibility and broader appeal to agents previously not considering RE/MAX.
- Stephen Sheldon (William Blair): Probed whether new initiatives could stabilize U.S. agent count. Management reported positive early adoption and noted April’s agent count trends were the best since 2022.
- John Campbell (Stephens Inc.): Asked if margin gains could continue as revenue grows. CFO Callahan stressed a disciplined approach to reinvestment and a focus on purposeful, return-driven spending.
- Tommy McJoynt (KBW): Sought clarity on RE/MAX’s U.S. agent market share and the company’s position regarding recent changes to the National Association of Realtors’ Clear Cooperation Policy. Management reaffirmed its commitment to transparency and broad listing distribution.
Catalysts in Upcoming Quarters
Looking forward, the StockStory team will be watching (1) adoption rates and impact of the Aspire onboarding program on agent recruitment and retention, (2) further progress in digital product rollouts and their effect on agent productivity, and (3) stabilization or improvement in the mortgage segment’s revenue. Continued international agent growth and the company’s ability to manage expenses while pursuing new revenue streams will also be important drivers to track.
RE/MAX currently trades at a forward P/E ratio of 6×. Is the company at an inflection point that warrants a buy or sell? See for yourself in our free research report.
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