With 25.9% revenue growth to reach $91 million and increasing its agent count by 1.6% both slightly above projections—franchise behemoth RE/MAX appears poised to weather a less-aggressive market this year as it focuses on its Motto Mortgage franchises and grabs international market share.
“Double-digit organic revenue growth in our core operations and continued strong performance from our acquisition of the RE/MAX INTEGRA North American regions contributed to our first quarter better-than-expected results,” said Steve Joyce, RE/MAX CEO in a statement. “Multiple factors drove our organic growth, most notably higher attendance at our recent annual agent convention, rising home prices and our expanding mortgage business.”
Joyce is taking over full time for departing CEO Adam Contos, who served as co-CEO through Q1 2022 after announcing his departure early this year.
Though the company still saw a net loss of agents in the U.S., growth in Canada and overseas has allowed the company to keep growing internationally. RE/MAX continues to project agent growth, projecting 2% to 4% more this year. The company also grew Motto Mortgage by 27.3%, reaching a total of 191 offices.
While continuing to see payoff from its acquisition of RE/MAX INTEGRA last summer, the company also saw growth in its recurring revenue streams from franchise fees and annual dues, up 24.6% or $8.4 million year-over-year. Total operating expenses were up also, 21.5% at $83.4 million.
In response to a question during the conference call following the report, Joyce said RE/MAX was focusing on organic growth, though he didn’t rule out more acquisitions particularly in the mortgage sector.
“I don’t believe we’re in a position where we need to swing for the fence,” he said.
Acquisitions would likely be adjacent or “tuck-in,” according to Joyce.
Joyce and chief financial officer Karri Callahan also highlighted the company’s networking tools and platforms as being especially important to agents in a low-inventory environment. Agents who adopted the platform were 12% more productive overall, they said.
RE/MAX stock was down 2.25% at market open Friday, trading at $23.80.
Jesse Williams is RISMedia’s associate online editor. Email him your real estate news to jwilliams@rismedia.com.
