RE/MAX Holdings (RMAX) Tops Q3 EPS by 4c, Revenues Beat; Offers 4Q Revenue Guidance Above Consensus, FY20 Revenue Mid-Point Outlook Above Consensus

RE/MAX Holdings (NYSE: RMAX) reported Q3 EPS of $0.64, $0.04 better than the analyst estimate of $0.60. Revenue for the quarter came in at $71.07 million versus the consensus estimate of $70.75 million.

Third Quarter 2020 Highlights(Compared to third quarter 2019 unless otherwise noted)

• Total agent count increased 5.1% to 134,769 agents
• U.S. and Canada combined agent count decreased 0.3% to 83,802 agents
• Total open Motto Mortgage franchises increased 27.9% to 133 offices1
• Total Revenue of $71.1 million; Revenue excluding the Marketing Funds increased 0.5% to $53.8 million
• Net income attributable to RE/MAX Holdings, Inc. of $3.6 million and earnings per diluted share (GAAP EPS) of $0.19
• Adjusted EBITDA2 of $30.3 million, Adjusted EBITDA margin2 of 42.7% and Adjusted earnings per diluted share (Adjusted EPS2) of $0.64

"The continued execution of our strategy, coupled with the U.S. housing market's remarkable run, drove our very encouraging results for the third quarter," stated Adam Contos, RE/MAX Holdings Chief Executive Officer. "RE/MAX agent count in both the U.S. and Canada increased sequentially on a month-to-month basis during the third quarter, particularly in Company-owned regions, after stabilizing at the end of the second quarter. Agent count outside the U.S. and Canada surpassed the 50,000 mark during the quarter, and has now doubled in just five years. Many of our RE/MAX agents and brokers are reporting their best years ever, and our Motto Mortgage business also continues to show impressive growth, as its franchise sales through the first nine months of 2020 nearly matched the full-year total for 2019."

Contos continued, "The strategic acquisitions of wemlo and Gadberry Group during the third quarter both tie directly into our strategy of adding value for the RE/MAX and Motto Mortgage networks while broadening and diversifying our revenue and growth opportunities. These acquisitions benefit our memberships, strengthen our technology and data core, and create promising commercial possibilities beyond our networks."

GUIDANCE:

RE/MAX Holdings sees Q4 2020 revenue of $69-72 million, versus the consensus of $68.43 million.

RE/MAX Holdings sees FY2020 revenue of $262.5-265.5 million, versus the consensus of $262.55 million.

The Company's fourth quarter and full-year 2020 Outlook assumes no further currency movements, acquisitions or divestitures.

For the fourth quarter of 2020, RE/MAX Holdings expects:

• Agent count to increase 4.25% to 5.25% over fourth quarter 2019;
• Revenue in a range of $69.0 million to $72.0 million (including revenue from the Marketing Funds in a range of $17.5 million to $18.5 million); and
• Adjusted EBITDA in a range of $20.0 million to $23.0 million.

For the full-year 2020, RE/MAX Holdings expects:

• Agent count to increase 4.25% to 5.25% over full-year 2019;
• Revenue in a range of $262.5 million to $265.5 million (including revenue from the Marketing Funds in a range of $64.0 million to $65.0 million), and
• Adjusted EBITDA in a range of $88.5 million to $91.5 million.

The effective U.S. GAAP tax rate attributable to RE/MAX Holdings is estimated to be between 27% and 29% in 2020.

For earnings history and earnings-related data on RE/MAX Holdings (RMAX) click here.

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