Re/max Holdings, Inc. · NYSE:RMAX
Re/max — Q1 2023 Earnings Presentation
23 slides from Re/max's earnings presentation, May 5, 2023
Slide 1: First Quarter 2023 Earnings
RE/MAX RE/MAX Holdings, Inc. First Quarter 2023 Earnings May 5, 2023
Slide 2: Forward-Looking Statements
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,
Slide 3: Q1 2023 Highlights
Q1 2023 Highlights Total Revenue of $85.4 Million, Adjusted EBITDA of $19.9 Million, Adjusted EPS of $0.26 Q1 2023 Operating Highlights Q1 2023 Financial Highlights = Total agent count grew 1,118 agents, or = Revenue was $85.4 million, a decrease of 0.8%, YOY to 143,523 agents 6.2% = Agent count in
Slide 4: Motto Mortgage franchise opportunity and revenue target
—e $24,570,129 ~5% of ~1.2 million annual loans Offices as of March 31, jj I a 2023 j : — $4,500 monthly continuing franchise fee ~60,000 loans annually $50 Million Annual Revenue Target $50 Million Annual Revenue Target -10,000 loans originated from the Motto network in 2022 Ry MOTIS wemlo. | sz fe
Slide 5: RE/MAX agents average double the sales of other agents
TO RE/MAX agents average double the sales of other agents in the RealTrends 500 survey*of large brokerages. Unstoppable Starts Here” RE/MAX (HOLDINGS, INGY “Transaction sides per agent calculated by RE/MAX based on 2023 RealTrends S00 data, citing 2022 transactions sides for the 1,561 largest partic
Slide 6: Conversions, Mergers, and Acquisitions
Conversions, Mergers, and Acquisitions 6
Slide 7: Revenue
Revenue Total Revenue down 6.2%, Negative Organic Revenue growth of 5.0% Date 2023 2022 increase/<Decrease) % Continuing franchise fees $32.1 $33.5 ($1.4) (4.2%) Revenue ($M) Annual dues $8.6 $8.9 ($0.3) (3.4%) Broker fees $10.9 $15.1 ($4.2) (27.8%) Marketing Funds fees $21.3 $22.9 ($1.5) (6.6%) Fra
Slide 8: Selling, Operating and Administrative Expenses
Selling, Operating and Administrative Expenses Total Selling, Operating and Administrative expenses up 2.7% Year to Date Increase/(Decrease) % Personnel $25.0 $26.7 ($1.7) (6.3%) Professional fees $3.4 $4.8 ($1.4) (29.4%) Lease costs $2.0 $2.3 ($0.4) (15.2%) Other 33.8% Selling, Operating & Administ
Slide 9: Looking Ahead - Q2 2023 and FY 2023 Outlook
Looking Ahead - Q2 2023 and FY 2023 Outlook Focused on Growing our Business, our Brands, and our Networks Q2 2023 Outlook' Full Year 2023 Outlook! For the second quarter of 2023, RE/MAX For the Full Year 2023, the Company Holdings expects: expects: = Agent count to change -0.5% to 0.5% = Agent count
Slide 10: A Leading Dual-Brand Franchisor with Compelling Growth Opportunities
A Leading Dual-Brand Franchisor with Compelling Growth Opportunities 1010
Slide 11: Thank You
THANK YOU RE/MAX HOLDINGS, INC
Slide 12: Growing Our Global Network
Growing Our Global Network Year-over-Year Agent Count Growth of 0.8% RE/MAX Agent Count Change Year-over-Year HH March 31, 2022 MH March 31, 2023 +0.8% YoY (41,118 agents) 142,405 143,523 -3.1% YoY (-2,639 agents) +6.6% YoY (+3,757 agents) Total RE/MAX U.S. & Canada Outside U.S. & Canada 12
Slide 13: Agent Count Change Year-over-Year
Agent Count Change Year-over-Year March 31, 2023, over March 31, 2022 +6.6% +2.6% -5.4% (+3,757 Agents) (+628 Agents) (-3,267 Agents) Agents Outside U.S. & Canada Agents in Canada Agents in the U.S. Total agent count grew 1,118 agents, or 0.8%, YoY to 143,523 agents RE/MAX 13
Slide 14: Adjusted EBITDA of $19.9 Million
Adjusted EBITDA! of $19.9 Million Adjusted EBITDA Margin! of 23.3% Adjusted EBITDA! ($M) Adjusted EBITDA Margin! $27.9 $19.9 38.1% 30.7% ware v fo a y V a (p oa oe s oe ee ae e N nN > Y “ De > ie} fe} e e les ey Ss For Q1 2023: = Adjusted EBITDA was $19.9 million for the first quarter of 2023, a dec
Slide 15: Strong Balance Sheet Bolsters Ability to Reinvest and Return Capital to Shareholders
Strong Balance Sheet Bolsters Ability to Reinvest and Return Capital to Shareholders Balance Sheet & Leverage * Cash balance of $96.8 million on March 31, 2023, down $11.9 million from December 31, 2022 = $447.4 million in outstanding debt! and no revolving loans outstanding = Total Debt / Adjusted
Slide 16: Industry Forecasts
Industry Forecasts DIN Monthly Existing Home Sales! (Thousands) Annual Existing Home Sales!:23 (Millions) mFannieMae mNAR ys yoga gaeh® ach? yo? wo gact ww? 2021 2022 20230 Home Price Appreciation23 (YoY) Housing Starts - Single Family4 (Thousands) =Fannie Mae =NAHB mFannie Mae mNAR 18.9% 18.2% 2021
Slide 17: Mortgage Finance Forecasts
Mortgage Finance Forecasts Loan Originations' ($’s in billions) $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 RE/MAX DIN mPurchase mRefinance 2021 2022e 2023e "Source: Mortgage Bankers Association - MBA Mortgage Finance Forecast April 2023 Mortgage & Interest Rates! —+-30-Year Fixed -—#10-Year Treasury
Slide 18: Agent Count and Revenue excluding the Marketing Funds
As of March 31, December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, 2023 2022 2022 2022 2022 2021 2021 2021 2021 Agent Count: U.S. Company-Owned Regions 50,340 51,491 52,804 53,415 53,338 53,946 54,578 48,025 48,041 Independent Regions 7,110 7,228 7,311 7,410
Slide 19: Adjusted EBITDA Reconciliation
Three Months Ended March 31, 2023 2022 Net income (loss) $ (679) $ 2,945 Depreciation and amortization 8,033 8,985 Interest expense 8,245 3,651 Interest income (1,004) (19) Provision for income taxes 392 1,205 EBITDA 14,987 16,767 (1) Impairment charge - leased assets — 3,735 Equity-based compensati
Slide 20: Adjusted Net Income and EPS Reconciliation
Three Months Ended March 31, 2023 2022 Net income (loss) $ (679) $ 2,945 Amortization of acquired intangible assets 5,758 6,169 Provision for income taxes 392 1,205 Add-backs: Impairment charge - leased assets (1) — 3,735 Equity-based compensation expense 4,451 5,637 Acquisition-related expense (2)
Slide 21: Cash Flow from Operations and Adjusted Free Cash Flow
Three Months Ended March 31, 2023 2022 Cash flow from operations $ 3,064 $ 16,502 Less: Purchases of property, equipment and capitalization of software (1,489) (3,723) (1) (Increases) decreases in restricted cash of the Marketing Funds 2,136 (4,760) Adjusted free cash flow (2) 3,711 8,019 Adjusted f
Slide 22: Non-GAAP Financial 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 inc
Slide 23: Non-GAAP Financial Measures (continued)
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 provi