Q1 2021 Re/Max Holdings Inc Earnings Call

Good morning, and welcome to Remax Holdings first quarter 2021 earnings Conference call and webcast. My name is Matt again.

The audio portion of today's call at this time I would like to turn the call over to Andy Schulz Senior Vice President of Investor Relations Mr. Schott.

Thank you operator.

Everyone and welcome to Remax Holdings first quarter 2021 earnings conference call.

Please visit the Investor Relations page of Remax Dot com for all earnings related materials and to access the live webcast and the replay of the call. Today. If you are participating through the webcast. Please note that you will need to advance the slides as we move through the presentation true.

Turning to slide two our prepared remarks and answers to your questions on today's call may contain forward looking statements forward. Looking statements include those related to agent count franchise sales financial measures and outlook brand expansion competition technology housing and mortgage market conditions, including statements about recovery.

Those markets capital allocation dividends strategic and operational plans and business models for.

Looking statements represent managements current estimates.

<unk> Holdings assumes no obligation to update any forward looking statements in the future.

Forward looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ materially from those projected in forward looking statements.

These are discussed in our first quarter 2021 financial results press release and other SEC filings also we will refer to certain non-GAAP measures on today's call. Please see the definitions and reconciliations of non-GAAP measures contained in our most recent quarterly financial results press release, which is available on our website.

Joining me on our call today are Adam Contos, our Chief Executive Officer, Karri, Callahan, our Chief Financial Officer, Nick Bailey, Remax, Chief customer Officer, and Ward Morrison President of motto mortgage with that I'd like to turn the call over to Remax Holdings CEO, Adam Contos Adam.

Thank you Andy and thanks to everyone for joining our call today looking at slide three we continue to gross with a robust housing market and record Mato Grosso helped drive strong financial results for the first quarter.

Ongoing execution of our strategy and the benefits of investments. We've made in recent years are having an impact we're seeing strength in our key leading indicators remax agent growth as well as motto franchise sales and open offices alongside improving financial performance.

During the first quarter, we increased and enhanced our value proposition for both of our franchise networks at a recent Remax convention, we introduced innovative programs and new tools technology and educational resources for the exclusive benefit of our affiliates.

At the same time within our mortgage business, we continue to ramp up our remote acquisition offering affordable dependable loan processing services to more of our motto franchisees each week.

Highlights of the first quarter included revenue of $72 3 million up 3% adjusted EBITDA of $23 2 million up 19% adjusted.

Diluted earnings per share of <unk>, 46 up 18%, although remax agent count increased significantly reaching a new all time high and motto franchise sales continued at a record pace.

Turning to slide for April is generally when prominent industry publications announced their survey results from the prior year.

For both Remax on motto recognition of our track record of outstanding annual performance and consistent industry leadership continues in fact, the high bar, we eclipse each year remains way above the industry norms case in point Remax agents productivity will trends recently announced the result of its 2020 annual Sir.

A large U S. Brokerages one of the most widely followed reports in real estate the real trends 500 ranks brokerages by total residential real estate transaction sites. This.

This year's survey included over 1700 brokerages.

For the 11th consecutive year Remax agents on the survey on average outsold competing agents more than two to one.

Remax agents average 16 transaction size compared to the average for all other competitors at 7.3.

More than two to one GAAP is a clear statement on the quality and expertise of Remax agents.

What's more the 16th side average was higher than last year.

The productivity advantage exists at the brokerage level to what all qualifying firms for the real trends 500 are ranked by average transaction size per agent 42 of the top 50, or Remax brokerages, including 15 of the top 20.

It says a lot about the quality of our franchisees the quality of the agents. They recoup the quality of our tools and services and most importantly, the quality of the customer experience you can expect from Remax globally Remax agents closed over $1 seven to 8 million transaction sides in 2020.

We believe this accomplishment is unsurpassed in the entire industry.

It was also our highest total since 2005 and the second most in the network's history and even with commercial activity removed from that figure nobody in the world sales more real estate on Remax based on residential transaction sides.

Similarly motto mortgage has a numerous accolades for its franchise brand.

In the annual entrepreneur franchise 500 list model rank in the overall top 150 and led the miscellaneous financial services category in first place.

Our momentum continues to day.

Both brands are off to a great start this year and we look forward to sharing more good news as 2021 per seats.

Moving to slide five U S housing market remains very active in March as closings grew more than 14% from a year earlier. According to the Remax National housing reported.

The drivers of the current dynamic that's familiar unusually low interest rates the rise of millennial homebuyers and the prospect of working from anywhere on amplifying demand supply.

Supply and affordability headwinds are the markets primary obstacles.

It's clearly a seller's market right now and homes are selling at a fever pitch, making a tough inventory situation, even more challenging on average homes that sold in March had been on the market just 38 days.

Three weeks less than the March average of 59 days from the past for years.

New listings are coming out of the market, but because houses are selling so fast the inventory total is having a difficult time, keeping pace and many markets buyers are racing to make an offer on the house. They want also on over listing price and that competition creates an attractive environment for sellers. The good news is the incredible level of demand at all.

Large number of transactions occurring.

It is a challenge for both homebuyers and sellers, but remax agents are using their industry, leading experience to help their clients achieve the best outcome.

Any of our affiliates are optimistic that they can have an even better year than they had in 2020 with that I'll turn it over to Nick.

Thanks, Adam and good morning, everyone looking at slide six overall agent count increased significantly growing more than 6% year over year. We added over 8000 agents worldwide. Since March 2020. In fact, we added more agents in the past year than we have in any 12 month period over a decade, our agent count performance outside the U S income.

Canada accelerated and we grew more than 16% year over year, we experienced widespread growth globally with countries in Europe, South America and Africa, among the better performers Canada.

Canada enjoyed similar success as we extended our leading market position up north agent growth accelerated to almost 5% year over year as we added nearly 1000 agents. He was our largest number of agent additions and for years, we saw growth across the country with the Ontario Atlantic region, leading the way in.

In the U S. We're encouraged that our agent count has virtually recovered from the pandemic related losses, we experienced a year ago. Moreover, we're seeing an uplift in agent count on company owned regions in the past few weeks many of our affiliates enjoyed a banner year in sales last year and are expecting similar results. This year armed with an unrivaled strength of our brand and what we believe.

Are the industry's best collection of tools technology and education, we continue to see impressive agent productivity as evidenced by the industry survey Adam referenced earlier.

Turning to slide seven.

<unk> held our annual convention in Orlando, Florida in March for the first time ever we hosted our conference in a hybrid format, featuring a virtual option as well as an in person experience. We had a tremendous response with more than 6000 attendees, both live and virtual from over 60 countries.

During that event, we announced several important additions to our value proposition and perhaps the most notable we announced an alliance that will help fill in industry wide GAAP in health care qualifying Remax affiliates can opt in for personal and family insurance coverage choosing from several options with highly competitive rates. According to the National Association of Realtors 2002.

'twenty Health insurance survey only 2% of agent members obtain their health insurance coverage through a real estate firm.

So this is a unique new offering that is both an opportunity for our agents and a recruiting value add for our franchisees.

At the convention, we also unveiled several new training programs and educational resources valuable marketing partnerships and even more enhancements to our technology suite. The objective is simple, helping remax agents build their business and use the competitive advantages available to them. We're encouraged to see increasing adoption with more than 23000 websites created on the <unk>.

<unk> platform, our growing digital presence is driving business to our agents, including a 70% year over year increase in leads during Q1.

We also highlighted our exclusive first app at the convention and nearly doubled the number of trial users in the next month. We believe the first step is the best tool available for helping agents identify existing contacts who are most likely to sell a home soon.

Value is even more apparent in essential during times like these when the inventory of available homes is so tight in fact, we've expanded our inside sales force and launch targeting marketing campaigns to help agents understand this powerful product and its capabilities.

Our other big announcement was the introduction of our new in House data organization called <unk> 73, which is the marriage of our legacy data initiative and the Geospatial data Science Gadberry group one of our 2020 acquisitions 73 provides the information analytics that power Remax tools and technology like Remax Dot com the Remax app.

Agent websites and more by harnessing the U S real estate industry's fragmented data and making it clean standardize normalize and geo coded on the backend <unk> 73 drives a more seamless user experience on the front end and.

And it really positions remax and its affiliates to offer even more value in a fast moving industry.

Looking ahead, we have more exciting technology developments to come for instance, we're deploying the technology underpinning our first app in a new and exciting manner, but more to come on that later this year.

We're also taking our tech global will be rolling out the boost platform to Canada in the coming months and it's an important step that we've been working on for some time, we believe it will open the gates to global Tech expansion, making yet another important milestone in our rich history with that I will turn it over to ward.

Thanks, Nick looking at slide eight we continued selling franchises at a record pace through the first quarter setting a new annual high for the trailing 12 month period ended March 31.

Hold more than 70 franchises during the past year. Furthermore, since inception to date, we have now sold over 250 franchises an impressive milestone for any franchise concept, let alone one under five years old.

Salary and growth of the motto mortgage network as well as the diversification of motto ownership across a variety of leading real estate brands is exciting and building for.

We're gaining market share on the broker channel right now is more real estate brokers and teams realize the value of having an ancillary mortgage business and embraced the benefits of the franchise model interest in owning a motto office remains high and we are currently running ahead of last year's franchise sales pace, we still anticipate selling between 60 and 80 motto franchises for.

Full year 2021.

Equally exciting is the growing number of motto offices that are open and operating we now have over 150 open model stores and almost 40 states and we're aiming to have 200 offices opened by the end of 2021.

Our model, we set our goals high and we challenge ourselves, it's part of our culture.

For many reasons, we've achieved so much success so quickly.

Coming off a record 2020 during which time the modern network closed nearly $2 $5 billion on loan volume more than doubling our 2019 total.

Our goal in 2021 is the double loan volume again, although many industry pundits are forecasting a slower 2021 as a refi boom phase. We believe we have a good chance to achieve our goal of doubling last year's volume in part because of the model's unique position in the purchase market simply put modest loan originators are often tied directly to a purchase price.

<unk> driven by real estate agents. Additionally, motto L. O's tend to come on board with a lot of local experience and connections to the respective communities attribute considered critical to building a successful purchase pipeline.

We are proud that motto is almost twice the percentage of purchase volume as the industry average if you take 2019 as an example, as a network models volume split roughly 80% purchase and 20% refinance when the industry average was basically 50 50 in 2020, we picked up more refi volume like everybody else, but models balance.

Shifted to 60% purchase 40% refi compared with $35 to 65 average split for the industry. We believe the strength of our existing pipeline will mean that as other lenders pivot back to purchase model should be already a step ahead and prepare to grow further.

Another area of organizational focus for US is the successful integration of lean low we acquired wean low last year in order to solve one of our franchisees primary pain points.

<unk> steady dependable and economic loan processing services.

Currently ramping up resources to handle processing for our anticipated motto loan volume the housing market remains hot so competition for talent is intense our ability to hire as many quality loan processors as quickly as we'd like as our primary challenge alongside Onboarding motto franchisees, Nevertheless for processing and increasing number of low.

On for a growing portion of the motto networks and the volume is expanding week by week.

And class <unk> technology provides the only enterprise solution of its kind on the mortgage brokerage space, while purchase primarily to support motto franchisees, we will continue to serve clients and market its products throughout the mortgage brokerage industry, serving as an additional channel of growth for Remax holdings with that I'd like to turn the call over to Kerry.

Thank you Lauren good morning, everyone moving to slide nine a healthy housing market and ongoing motto expansion helped drive strong financial performance during the first quarter.

Key leading indicators are trending well and we generated revenue earnings and margin growth during Q1, while converting more than 70% of adjusted EBITDA into free cash flow during the past 12 months.

Total revenue was $72 3 million, an increase of approximately $2 million or two 9% compared to the first quarter of 2020 <unk>.

Acquisitions increased overall revenue by two 3% and FX impact was negligible.

Organic revenue was virtually flat for the quarter, but we believe that metric does not capture the improving performance in our core business day.

Further to that point recurring revenue streams, which consist of continuing franchise fees and annual David grew 3% compared to the first quarter of 2020.

Broker fee is also were up over 26% due to the strong housing market Inc.

Contract franchise sales on other revenue was down more than expected primarily due to lower revenue from our annual agent conference a function of COVID-19, and declining legacy revenue.

Putting these two items and the marketing funds organic revenue growth from our core businesses was approximately 4% in line with our mid single digit organic growth expectation for the full year 2021.

Our organic growth expectations exclude any anticipated benefit from lapping the COVID-19 related fee waivers, we extended to our affiliates during the second quarter of last year.

Looking ahead to the remainder of 2021, we expect our organic growth to benefit from multiple drivers more revenue from broker fees due to the healthy housing market, increasing agent count pricing motto expansion and growth from acquisitions, one Cadbury and lean low lap their one year anniversaries and fall into the organic bucket.

Looking at slide 10, selling operating and administrative expenses were $43 7 million in the first quarter of 2021, an increase of $9 million or 26% compared to the first quarter of 2020.

Excluding the marketing funds represented 87% of revenue compared to 65, 7% in the prior year period.

Selling operating and administrative expenses increased primarily due to higher equity based compensation expense from recent acquisitions higher.

Higher bonus expense due to the elimination of the corporate bonus in the prior year and increased personnel costs largely from acquisitions, partially offset by a reduction in travel and event expenses and lower bad debt expense due to strong collection.

The higher stock based compensation expense, we recorded a one time charge of $5 5 million as a result of accelerating the related expense at certain acquisition guidance that was initially expected to be recognized over the original term on the award agreement.

Turning to slide 11, the Companys second quarter and full year 2021 outlook assumes no further currency movements acquisitions or divestitures for.

For the second quarter of 2021, we expect.

Net income to increase 7%, 8% over second quarter 2020 revenue in a range of 74 million for $78 million, including revenue from the marketing funds in the range of $17 5 million for $18 5 million on adjusted EBITDA in the range of $25 5 million for $28 5 million for the for.

Full year 2021, we are increasing our agent count guidance on strength of global agent count growth on <unk>.

Expect remax agent count increased 5% to 6% over full year 2020.

From 4% to 5% revenue in a range of 300 million for $310 million, including revenue from the marketing funds in the range of $71 million for $74 million and adjusted EBITDA on a range of $103 million to $107 million now I'll turn it back to Adam.

Thanks, Gary moving to slide 12, we began the year on a strong position and look forward to continued growth as the year unfolds, we're focused on expanding our value proposition towards networks and helping our affiliates succeed in the marketplace. We believe we have a winning strategy winning brands and winning networks and look forward to seeing a recent investments continue to make them.

Positive impacts on our future results with that operator, let's open it up for questions.

As a reminder, if you'd like to ask a question. Please press star followed by the number one on your telephone keypad.

On your first question is from Ryan with Kevin <unk> with Zelman and Associates. Your line is open.

Hey, good morning, and thank you two questions for me.

So first question I'm curious if you can just share some thoughts around.

The adoption of some of the tech products and services Boosh first et cetera, and maybe how that's been trending relative to your expectations and on the second question will be so you mentioned atomist, 70% I think you said, a 70% year over year increase in leads or maybe this was Nick sorry.

Leads to agents and I guess the question is.

Are you or is there opportunity to more directly monetize that lead flow or is that embedded within kind of the remax value proposition and I guess, what I'm thinking about is.

Some brokerages generate a more favorable splits to the company on company driven leads versus let's say agent driven business. So I guess I'm just curious on your approach for the leads being generated.

And thinking about kind of the economic benefits for Remax is that more on just the general value proposition the agent count dynamics or is there opportunity to further kind of directly monetize those leads that you're generating thank you so much.

Yes, great Hi, Ryan its Nick Thanks for the questions.

First off on tech adoption that continues to grow between Bhushan first and mentioned first that we've had an uptick there were nearing 10% of our membership on a paid product very pleased there and statistically we've released that the average user of the first platform is 50% more productive than a non user so were seeing very strong.

Results as far as boots, we mentioned the number of websites published that continues to increase month over month as do active users that were tracking as do lead. So the platform is continuing.

Not only with adoption, but we've had a lot of that driven by the feature releases and the expansion of the product it's been around just over a year since we launched.

And so those will continue in terms of lead monetization historically when you rewind back to the mid two thousands when we launched the new Dot Com and lead Street one.

One of our competitive advantages has been that we send referral fee free leads to the agents.

And so that has just been part of our culture now in terms of the opportunity to monetize what that those leads look like.

I think that there is some opportunity for that we have had discussions around that.

Does the idea of leads going into an environment to be incubated to be warmed.

To a level that theyre more purchase ready, we're seeing a tolerance from agents to say, they're willing to pay for that incubation type of service versus just monetize off of a cold lead but for the time being right now the leads a referral fee free.

On an increasing to agents.

That makes sense very helpful. Nick Thank you.

Your next question is from Vikram Malhotra with Morgan Stanley. Your line is open.

Thanks for taking the question good morning, everyone.

Just maybe given the given the strength of the housing market I'm wondering if you can give us the update specifically on the U S and your expectations for agent count in the balance of the year. One would think in a very strong market you have new talks coming into the brokerage business just trying it out on their own.

I'm just wondering if you can give us an update on potential share gains what you may be doing in the second half to kind of maybe ramp the agents up even more.

Hey, good morning, Vikram, it's Adam So I'll start and then I'll kind of hand, it off here for a deeper dive into it but when you when you look at agent count and the dynamics in this marketplace. It's first of all it's very high velocity marketplace.

Lot of activity going on but really what we're finding is the agents who are best prepared to deal with that activity with the best backing in their brokerage and the tools and technology available to them are performing at the highest level and take the first App for instance that somebody walks into a remax and they have access to that in the U S. So.

Our our goal internally here is to continue to build the excitement and the reliance upon the tools to give you. The most time with the customers in order to do the best job possible.

The marketplace, though is obviously.

Challenging from a.

Our perspective of the fact that it's very noisy there are just so many new agents doing very little business out there and it's not doing a substantial benefit to the consumer as a result, so you know that's why we continue to lean on our average agent productivity, but.

We see some good excitement in the recruitment occurring in our industry, we see a lot of focus by the brokers on growing their business and we also continue to see great interest in the franchise model and the purchase and expansion of our franchise footprint as a result so.

That's a positive tailwind for the recruitment I'll pass it over to Nick to put a bow on anything else here that I might have missed share. Yes, I think just in general that a strong market and an increase in net total agent count increases the overall Tam of the industry and that's going to help us in any form or fashion with growth. However, we always continue to say.

Though it's.

It's.

It's known that Remax has not home of the brand new agents now it doesn't mean that we have had new agents that have joined US I know we have new agents that are joining us now and we have some of our brokerages that have very strong training programs as do we and they can take advantage of it but based on the.

Average production of a remax agent. They generally have twice as much experience in the business and do twice as many transactions and therefore, when we see the velocity of just licensees in general on the in the industry increase at the rate that it has we're not going to be directly tied to that since we're going at.

After more of a seasoned top producer.

That makes sense.

Two more quick ones just first on the.

On the margins, maybe just give us an update as you for.

The balance of the year.

With motto, increasing and contribution from the newer businesses.

Should we think about the margin ramp for the balance of the year.

Hey, good morning Vikram.

Great question. So I think we're really trending we're really happy with the performance on that.

We're seeing across the key leading indicators. So obviously access some other nonrecurring stuff that hit in the first quarter organic revenue kind of in that 4% and really trending towards that mid single digit organic revenue growth, assuming we continue to see the ramp in the top line that just given the strength of the business model the franchise.

Characteristic you should see the margin pick up in the back half of the year. So with regards to some of the investments still looking at about a two and a half to $3 $5 million of kind of a headwind.

Headwinds to adjusted EBITDA from those this year, but looking to kind of scale and improve.

On the margin performance in the back half so it really kind of targeting the midpoint of the range is and some margin improvement in the back half on a year.

Okay that makes sense and then just last one you mentioned.

In your prepared remarks.

Prospects for work from anywhere you see net clear demand.

<unk> I'm just wondering you know off the top of your head on.

Are there a couple of markets that use you can cite where you're just seeing demand relatively just be very strong specifically because of this phenomenon I'm just wondering if there's a.

A real pick up in certain markets with migration has occurred.

I don't think Theres any market. When you talk about migration are you talking agent counter just home sales in general no whole home sales leads for free as you mentioned.

<unk>.

Are now looking at work from anywhere so you're seeing this translate into.

On for homes I'm, just wondering are there any markets that stand out.

I don't think theres any that stand out specifically.

Last year I think we saw high density population areas, specifically the Bay area, New York City that you saw individuals' moving to suburbs you saw Florida population increase.

And overall now we're starting to see some of those high density areas as they open up in general.

People are coming back so I don't think there's one specific area to point to.

Okay, great. Thanks, so much.

Our next question is from Stephen Sheldon with William Blair. Your line is open.

Good morning, and thanks for taking my questions.

For the health care offering sounds really interesting I guess can you just give some more detail on on when that'll be rolling out and that kind of the structure of the operating.

Yes, Hi, Steven.

Very excited about the healthcare offering we just announced that at our for conference a few weeks ago and it was welcomed with open arms. So that's obviously been a challenge for a 10 99 independent contractors to secure health care, if they don't have.

Spouse or partner within the household and so we found the company debt structures. This on an individual basis and what that means is the entire brokerage doesn't have to be part of the health care program. It is up to each individual agent to have the opportunity to opt in for coverage.

Which is somewhat unique so that's advantage number one the second part of it is the way in which it's structured.

It is with it is backed by one of the big for but it also is outlined in a manner of which family our individual plus <unk> plus family coverage very similar to the way <unk>.

Type of health care offering would be given to employees.

And so the structure marries that of employees, which is what makes it so attractive.

So the rates are extremely competitive the options or competitive it includes dental and vision and all the goodies that most employees get.

And so that's why we believe it's been welcomed with open arms. So we believe not only is it going to help on the retention side, but it is a great recruiting tool for those that need it.

Got it that's good to hear.

On.

And then you know really great to see the pickup in agent growth, especially in Canada can.

Can you talk some about the divergent agent trends between owned and independent operations in the U S and Canada. It seems like a lot of the sequential growth for the last few quarters has come from the independent region. So is there anything the independent regional owners are doing.

Differently I guess.

Yes, I'll start with Canada, I mean, theres not one button that we push when it comes to growth I think it comes down to three things overall.

One recruiting programs that are available to everyone. In the engagement is strong was strong last year and continues to strength in the second part is like we mentioned in the scripted remarks with the value proposition the new offerings that we have the announcement of taking technology to Canada has created a nice excitement.

Debt is helps with brokers going to the market, but let me give you a Canadian specifically and then we'll talk about operating regions versus independent.

Canada's market when the U S. A couple of years ago was not as strong as the U S. Canada overall, especially on the Western side, Ontario, Our Toronto, specifically has been strong economically for the past couple of years, but overall.

The market in Canada is bumping along the pandemic.

Unfortunately, it was very gracious to the Canadian real estate market and it's very strong.

And so they've seen great.

Great confidence come back brokers are confident about the market, which that confidence leads to an increase in recruiting.

So not all just one button in terms of looking at operating regions versus independent of course, we have to look at geographies total accounts et cetera.

And we are working together with the independent regions collectively.

On recruiting programs and systems and so we are seeing pockets of growth even in the.

Owned regions.

Tracking it by state by market and so there are a lot of bright spots in both operated and independent.

We had the opportunity to go through some cleansing of some underperformers in the operated regions last year.

Which impacted <unk>.

Some of our terminations, which office count termination was up.

Because of the cleanser, the non performers, which we believe in turn and we've showed that it directly impacts our ability to re grow in a market when we remove an underperformer.

So I believe in the operating regions, we were more aggressive with cleansing Theyre Underperformers Gen.

In general than the independents.

Very helpful. Thank you.

Your next question is from Tommy Mr. Ryan Your.

Your line is open.

Hey, good morning, guys. Thanks for taking my question.

So as we think over the next couple of quarters in terms of looking at broker fees. The line on the income statement.

Obviously, you're going up against some pretty easy comps from 2020 to perhaps better to look again, its 2019 given outlook for kind of.

How strong this housing market might translate to an increase in broker fees relative to 2019.

Hey, good morning, Tommy So great question definitely strengthened over on housing.

It is obviously a tailwind to broker fee. Obviously, so on here are relatively small portion of our revenue.

And so obviously you know.

Remax tends to be a proxy for the overall U S housing market. Both in terms of average home price and then just our participation within the market in general and so I think if you just look at whatever your estimates are for just for housing.

Actions as well as volume growth, we should track pretty closely with the market because we tend to really be a proxy for adjusted medium median home price and overall on transactions.

Okay, Great. That's helpful and then switching over to Tomatoe, obviously theres been a lot of on the headlines about competition in the broker channel a lot of interest in that as we shift to a purchase market.

I would expect the demand there debt to remain strong have you noticed any of them day kind of headline competition.

Kind of spilling over into even stronger.

Kind of interest on motto.

Yes, I think as the broker channel just gets its due we're seeing more and more interest in it for sure.

And particularly our mottos, we typically do sell the real estate companies. That's our large majority right now and they have that purchase money transaction. So we continue to see great interest from real estate companies, who want to.

Monetize that particular portion of their referral base and the broker channel continues to be one that not only our wholesalers are pushing we're pushing.

Everybody is pushing to try and grow that channel because we think it offers consumers greater choice transparency and we're excited about it.

Thanks, Tim.

Has there been any new competitors to motto or do you still think about outstanding on glass is really the on the national mortgage franchise.

Yes, Theres no real national mortgage franchise out there obviously there are some larger brokerages out there that would consider somewhat our competition but.

We continue to just emphasize sort of R. R pathway and all the tools and services that we provide to our people. So we're just focusing on our model, we really don't see a competitor on the horizon Carlin.

Great. Thanks, a lot.

Yes.

Your next question is from Matt Gaudioso with Compass point Your line is open hey.

Hey, good morning, maybe just following up on Canada, and the announcement to rule out to roll out push there. This year. Just wondering if you can share what kind of technology environment looks like up there are a lot of the same vendors in the U S. Do they also have platforms up there or do you see buege as maybe.

Being an even bigger differentiator for for agents and brokerages in Canada.

Yes. Good question there are a number of providers that do offer services, both in Canada and the U S. I think in terms of overall the systems are disparate in Canada, and so what we'll be bringing with the boost platform is that one ecosystem.

The idea of utilizing <unk> 73 to pull all of the fragmented data across the country together on the front end.

Is very advantageous and once we go live with a similar set of products with CRM website.

Things of that nature.

It will be a competitive advantage to have kind of one system, but similar to the U S. I think candidate experiences. The same thing that the average age and is using multiple systems to conduct their business those of which do not speak to one another.

And so to bring a solution. That's all encompassed in a single ecosystem. We believe is going to be a competitive advantage.

That's helpful.

And then looking at international had another strong quarter there on agent growth.

Wondering if you have any latest thoughts on monetization efforts on the international piece and what the I guess ramp looks like to get a technology offering in place for international agent.

Hey, good morning, it's Adam So we're taking a hard look at really the holistic monetization of the homeownership lifecycle, both in the U S North America, and an outward from there.

So we don't have anything to announce at this point with respect to that however, it is a key strategic focus of the organization to determine.

How the implementation of technology data infrastructure given obviously.

Just a myriad of different data and privacy laws that you encounter by doing so but ultimately that is.

One of our long term goals is is how do we roll out our technology data platforms and the homeownership lifecycle throughout the global infrastructure that Remax has built.

Great. Thanks, so much.

Your final question is from John Campbell with Stephens. Your line is open.

Hey, guys. Good morning. This is James Holly stepping in for John Campbell.

Had a few specific questions around the regions are there any debt you would call out as kind of the specifics around the resurgence that <unk> seen.

Our region specifically.

I don't think there is a.

Specific region.

The market as a whole generally has been you can point to the coast lines at least in the U S have always been where the vast majority of the market lies.

The Midwest in the center of the country.

It's generally kind of steady Eddie but they're experiencing very similar things for the rest of the country with extremely low inventory in and bidding wars and double digit price appreciation in some of those markets. So it's fairly consistent but I think it's just a math.

Matter of.

A lot of people want to live in warm climates.

Around the coastal areas and that's something that's always been.

Part of the industry and we're not seeing anything different.

Okay, and then just a separate question here. So and then could you provide a bit of an update on maybe some of the recent acquisitions and integrations going on like such as Cadbury.

Sure. So you know with regards to other recent acquisitions on a huge focus of ours. This year has been around the successful integration and I think the teams have done a really nice job.

Really on all fronts, so really integrating from a technology perspective, gadberry in with our legacy data platform, combining that and launching that externally to our customer base at our recent agent Convention and then also really harmonizing technology between first and boost.

On the platform there and then on the on the mortgage side, obviously, the integration of low into the motto networks and really expanding there and thats really kind of from a front end customer service perspective, and a technology perspective, and then I think from just a share services and back back on.

Perspective, all of those integrations are substantially complete so definitely a focus this year on as we look to invest in those and really then propel ourselves into 2022.

For outsized profit contribution coming from those acquisitions.

Alright. Thank you appreciate it.

We have no further questions at this time I'll turn the call back to presenters for closing remarks.

Thank you operator, and thank you to everyone for joining our call today have a great weekend.

This concludes today's conference you may now disconnect.

[music].

Okay.