Q4 2021 Re/Max Holdings Inc Earnings Call
Good morning, and welcome to the remark Holdings' preliminary fourth quarter 2021 earnings conference call and webcast. My name is Savannah, and I will be felt in the audio portion of today's call. At this time I would like to turn the call over to only shop senior Vice President of Investor Relations Mr.
Mr Schulz.
Thank you operator, good morning, everyone and welcome to remark Holdings' fourth quarter and full year 2021 earnings conference call.
Please visit the Investor Relations section at Www Dot Remax holdings 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.
Turning to slide two our prepared remarks, and the 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 capital allocation dividends.
Share repurchases strategic and operational plans and business models.
Forward looking statements represent managements current estimates Remax holdings assumes no obligation to update any forward looking statements in the future.
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 fourth 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.
It is available on our website John .
Joining me on our call today are Adam Contos, our Chief Executive Officer, Steve Joyce Director and incoming CEO Karri, Callahan, our chief financial Officer, and the Presidents and Ceos of our brands, Nick Bailey and Ward Morrison with that I'd like to turn the call over to Remax Holdings CEO , Adam Contos Adam.
Okay.
Thank you Andy and thanks to everyone for joining our call today.
Looking at slide three we exceeded our expectations during the fourth quarter. Our strong performance was driven by better than anticipated results from our acquisitions of Remax Integra is north American regions and solid organic growth contributions from our core operations.
Over the past few years, we have been strategically investing to expand and diversify our revenue and growth opportunities. Our Q4 results affirm that these investments are beginning to pay off.
Here are some of the highlights.
Overall Remax holdings revenue for the fourth quarter was $89 2 million up over 23% largely driven by our July acquisition of Integra.
Excluding the marketing plans, we had 5% organic revenue growth in the fourth quarter.
We generated adjusted EBITDA of $31 1 million up over 30% and we expanded our adjusted EBITDA margin to 34, 8%.
Adjusted EPS increased more than 27% to 60.
Overall agent count grew more than 4000 agents to 142000 agents in total a new record.
And motto opened a record number of offices in 2021 with growth of more than 30%.
Today is my last earnings call as CEO of <unk> Holdings.
Before I turn the call over to Nick I, just want to say what a pleasure. It has been working with our tremendous team there.
<unk> also been an absolute privilege and honor to serve our two amazing networks are remax and motto affiliates are hands down the best entrepreneurs in real estate and it has been the highlight of my professional career to lead them are board members, Steve Joyce will lead Remax holdings until the search for our next CEO is complete.
I cannot think of a better person to pass the baton to that Steve is.
His deep experience and long track record of success in leading publicly traded franchise ores.
The optimal fit to lead our company.
I am confident he will seamlessly step into the CEO chair and add to our momentum.
I am proud of all that we've accomplished over the past few years I know I leave the company in great hands, and I look forward to sharing and its many future successes as a shareholder with that I'll turn it over to Nick.
Thanks, Adam and good morning, everyone moving to slide four although January home sales were robust by historic standards. They were down modestly about 5% relative to last year's pricing start according to the latest <unk> National housing report.
Importantly, the rate of price appreciation paused as the median sales price across a 51 metro surveyed remained steady relative to December sales price homebuyers hope. This is the continuation of a welcome trend as it represents the second month in a row.
Low to no price appreciation.
Perhaps the most notable development from January was that mortgage rates started to tick up interest rates impact consumer confidence and influence their behavior. Some markets are seeing and we start to their spring selling season as buyers and sellers rush to beat any additional rate increases.
Nevertheless rates remain historically attractive and with prices stabilizing recently that is helping offset affordability concerns for the time being.
Some exhausted homebuyers may be discouraged by the prospect of rising rates and choose to sit on the sidelines as a consequence a combination.
Slightly cooled demand with the expected increase of new homes coming to the market like Jesse to take it to start tipping. The overall housing market towards equilibrium in the interim we expect 2022 to be another strong year for housing once again driven by strong demand there is.
Ton of pent up demand from last year, and the prospect of rising rates, Mike Goose that demand in the first half of the year price appreciation trends might follow a similar pattern moving higher faster in the first half of the year and then less in the back half markets with the highest job growth should continue to see the healthy price increases in the coming year.
Looking at slide five overall agent count increased over 3% year over year to a new high of 142000 agents. We've added over 4000 agents worldwide. Since December 2020 highlighted by terrific growth in Canada.
Our agent Count in Canada grew by 2000 agents during 2021, which is a whopping, 10% increase and encouragingly. The increase was broad based as we experienced growth in almost every province highlighted by outsized growth in the Ontario Atlantic region, which contributed notably to the acquired Remax Integra operations in the quarter.
We are tracking to hit 25000 agents and candidate sometime later this year, which would represent a 25% increase from just a few years ago.
Note that on average an agent in our Canadian company on regions generate over $2400 in annual revenue in 2021 that is only about 20% less than we derive annually from a U S based agent in company owned regions.
As a result, we're focused on our combined U S. Acadian agent count growth and use it as a key performance indicator and the fact, we're approaching levels, we havent seen it over a dozen years is cause for optimism in the U S. We had many states. They grew their respective agent counts in 2021, however, due to agent attrition and other states our agent count in the U S finished the year slight.
Down overall increase in our U S agent Count remains our number one company priority and we have several good ideas on how to spur that growth. We will look forward to telling you more about that in the future.
Now switching to the global Arena, our international agent Count increased five 6% to more than 56000 agents, which is a new record that represents growth of more than 10000 agents. During the two year pandemic, which is a tremendous accomplishment under adverse conditions as.
As the pandemic eases, we expect to see our growth outside the U S and Canada begin to accelerate.
I am excited to be heading to Las Vegas. This weekend for our annual International agent complex. Our networks interest in attending has been fantastic and we now expect over 6500 attendees from more than 34 countries to gather learn network share best practices and get Reacquainted with old friends.
Also while we're in Vegas, we also plan to celebrate because in terms of closed transactions 2021 was the best year ever in the history of Remax remax surpassed more than $2 million total transaction sides in 2021 and that is something that no. Other brand has ever done with that I'll turn it over to ward.
Thanks, Nick looking at slide six the fourth quarter was a strong capstone to another year of outstanding growth for motto in 2021, the modern network generated almost $3 5 billion in loan volume and to help nearly 13000 families realize their dreams of homeownership, both metrics far surpassed 2020.
Totals.
Motto is number one goal every year is growing franchise sales, we hit an inflection point in our franchise sales two years ago and I'm happy to say the momentum carried forward through last year. We sold 64 franchises in 2021, just off our record pace set in 2020, and just a few short weeks ago, we sold our 300th franchise since inception, which is a rare and <unk>.
<unk> for any franchise the hits, let alone within the first five five years of its launch motto has averaged at least one franchise sales per week since our founding in October 2016.
And we continue to see strong demand across many customer types. Most motto franchise sales to date, a little over 55% had been to Remax brokers importantly, an increasing number of sales are now the independent real estate brokerages or professionals affiliated with a rival brand representing over 15% of franchise sales to date.
The remaining 30% of sales have been to entrepreneurs investors or owners of related businesses like title insurers.
Extra ordinary growth the motto mortgage brand has experienced and the rapid diversification of franchise ownership is a testament to how compelling our value proposition is.
Potential franchisees know the importance of ancillary business opportunities at how ancillary can help them diversify their revenue streams and fortify their balance sheets with the prospect of rising interest rates potential franchisees are also aware of the counter cyclical nature of our business model and model's unique position in the purchase market.
Simply put matters loan originators are often tied directly to purchase pipelines driven by real estate agents. Additionally models lows tend to come on board with a lot of local experience and connections to their respective communities attributes that are vital to building a successful purchase pipeline as a result motto has a much.
Higher percentage of purchase volume than the industry average. This is a fact not loss on the 70% or so of our motto franchisees, who are either real estate brokers are professionals and are situated close to the real estate transaction.
Robust franchise sales are also leading the strong office openings, which ultimately drive contributions to our overall organic revenue growth. We opened nearly 60, new offices in 2021, a record that represents over 30% annual growth and we have many more openings in the pipeline as of year end, we had 187 independently owned and all.
Operator offices under the motto mortgage brand across 38 States and Washington D C.
Motto team does a terrific job of helping our franchisees navigate the licensing process and the steps needed to get their office is open. It's an important part of our overall value proposition and as the impact of Covid lessens our office openings are ticking up we're.
We're off to a fast start so far in 2022, and we expect to open our 200 motto franchise any day now.
Another big area of organizational focus for our mortgage business. This past year has been the continued development of lean level will be.
Acquired <unk> in the second half of 2020 to solve one of our motto franchisees primary pain points.
Steady dependable and economic loan processing services with the addition of Wingo matter offices now have access to an operationally ingrained third party loan processing team, which is held to the same high standards of customer service that have come to define the motto mortgage brand <unk>.
Last quarter, we introduced windows loan brokerage system, where lbs, which has been designed to address the specific needs of the professional loan originator operating in the mortgage brokerage channel. We are continuing to iterate on the platform and incorporate critical feedback from our network.
Our module affiliates will receive the lbs platform at no additional fee as well as obtain initial discounts on the integrated mean low loan processing offerings.
We will all be <unk> officially launched the mortgage brokerage industry sometime later in 2022 with that I'd like to turn the call over to Kerry.
Thank you Lauren good morning, everyone moving to slide seven fourth quarter revenue grew 23, 1% to $89 $2 million excluding.
Excluding the marketing fund.
Revenue was just over $66 million, an increase of 21, 2%.
This increase was comprised of just over 15% acquisitive growth, 5% organic growth and just under 1% growth from FX.
All acquisitive growth came from last July acquisition of Remax Integra, North American operation, which continues to perform better than we anticipated in every significant metric agent count revenue growth cost synergies and profit.
Notably for the third quarter in a row, we generated mid single digit organic revenue growth ex the marketing funds as expected we are witnessing a trend of organic growth developing and we believe that will continue throughout 2022.
Our 5% organic revenue growth rate this quarter was even more encouraging given that we lap. The historically strong Q4 housing markets. So none of the growth came from brokers.
Many drivers contributed to our top line performance during Q4, including more targeted use of agent recruiting incentives pricing increase event based revenue and motto expansion Canadian notable lineup.
Excluding <unk> legacy runoff, our organic growth improved by almost another 1%.
Looking at slide eight.
Also exceeded the top end of our profit guidance range for the third.
Quarter as our adjusted EBITDA increased almost 31% to $31 1 million fourth quarter adjusted EBITDA increased primarily due to strong contributions from the acquisition of Integra.
Adjusted EBITDA also increased due to incremental revenue from fewer agent recruiting initiatives and a price increase and remarks continuing franchise fees.
Is that by increased travel costs, and our real estate segment and by continued investment in Meanwhile, within our market segment.
Hydro acquisition has been a bright spot in both our Q4 and full year 2021 for functions and we expect that to continue.
We continue to see growth from the other acquisitions, we made over the past two years between one first have ramped slower than expected.
From a profit perspective, our business model has significant leverage mid single digit organic revenue growth again translated into strong profit performance, which was accompanied by margin expansion. Our adjusted EBITDA margin of 34, 8% in Q4 was that 200 basis points compared to 32, 8% in the fourth quarter of <unk>.
'twenty.
Over time, we aim to generate consistent mid single digit organic revenue growth, which should translate into a higher rate of adjusted EBIT growth and typically an even higher rate of earnings growth. That's the beauty of the franchise model.
Before I get to our guidance I wanted to spend a moment on capital allocation.
Since our initial public offering we have consistently stated that returning capital to shareholders with our priority.
It was true in 2013 and it remains true today.
That's why I am pleased with last month's announcement that our board of directors authorized a common stock repurchase program of up to 100 million.
Reflecting confidence in the Companys performance and the strength of our balance sheet we.
We believe the investments we've made over the past few years position us well to continue to grow and generate substantial amounts of free cash flow over the long term.
We continue to balance returning capital to shareholders with strategic investments in the business to create shareholder value and we will continue to prioritize our capital allocation accordingly.
Moving to slide nine the Companys first quarter and full year 2022 outlook assumes no further currency movements acquisitions or divestitures.
The first quarter of 2022, we expect agent count to increase one 5% to two 5% over first quarter 2021 revenue in a range of 88 million to 92 million, including revenue from the marketing funds in a range of $22 million to $24 million and adjusted EBITDA in a range of 25 million.
$28 million.
For the full year 2020 to you we.
Back to agent count to increase 2% to 4% over full year 2021 revenue in a range of 366 million to $376 million, including revenue from the marketing funds in a range of 91 5 million to $95 5 million and adjusted EBITDA in a range of $130 million to 130.
$5 million.
One last item to note with respect to our 2022 expectation due to having a full year of contribution from Integra, We expect our income tax rate used to calculate adjusted net income to increase from 24% to 25%.
Now I'll turn the call over to Steve for closing comments.
Thank you Gerry.
Looking at slide 10 over the past few years, Adam and the leadership team has done an outstanding job investing for growth expanding our services and positioning Remax holdings for continued success in the future.
Company's strategic investments have significantly diversified and broadened our revenue and growth opportunities we.
We solve those investments start to pay off in 2021, and as evidenced by our 2022 guidance, we expect that to continue in the year ahead.
I look forward to working with our talented team to build on our momentum my goals as CEO are straightforward first amplify our growth.
And revitalize our U S agent count in particular by focusing on a few strategic initiatives and second work with our board of directors to identify our next company leader.
I am here to successfully execute on these two critical objectives.
Glad to see them through.
Whether that takes 612 or 18 months I am here for the duration.
I'm excited by both opportunities and look forward to sharing more good news in the coming weeks and months.
With that operator, let's open it up for questions.
And also as a reminder, it is star one if you would like to ask a question, we'll pause for a moment to compile the Q&A roster.
And our first question will come from Ryan Mckenna Me, Kevin from Zelman Associates.
Please go ahead, yes. Thank you very much and good morning, and Steve Nice to hear you on the call as well and Adam Congrats on everything and good luck with everything.
So I wanted to focus a bit on.
Steve What you just mentioned the few core strategic initiatives and Nick touched on this as well, but just curious if you can dig a little deeper there.
Whats the path to kind of returning the U S segment towards growth and with the with the success in Canada and strong growth there I guess any any learnings or things happening within that that market that maybe we can think about is applicable to the U S side of things. Thank you.
Youre welcome and good morning.
Let's see so yes in answer to your to your question candidate is a learning opportunity for us because we've had some great successes, there and a number of the things that they're doing are the types of things that we're thinking about bringing to the U S. Amongst some others. So if you look around the industry.
A number of the folks in in our business had done some interesting things on both retention and on gaining.
Gaining agents and we are has been in the process.
Looking at in determining which of those we want to do you will hear from us in the near term.
As to the things that we're going to do that we think will make a difference in the U S count.
The great thing about the Canadian agent count as those agents are worth 80% of what USA agents worst so that's helping.
Up significantly from the standpoint of the value of the agents we have in house.
But we are totally dedicated.
As Mick said to bringing back.
Growth on the U S agent side as well.
Several levers to pull and we are in the process of determining which levers will be pulled in which order to have the maximum impact on that agent count that will happen over the first quarter. So you can expect to see the results of those kind of coming through.
In 'twenty two.
Fully expect to break.
That agent count back to positive growth as indicated in our guidance for the year, but we do think that there is significant opportunity continuing in Canada as well so the combination of those two.
We think we will continue to benefit us in addition to that.
We believe we've got the opportunity to strongly expanded the mortgage business and we are looking at as others have had other sides of the transaction that we think that we can bring value to our brokers and agents and to the company.
By determining which avenues of those gross to go so we what we wanted to do is bring the U S.
And Canada agent count to a healthy growth perspective on an ongoing basis, but then also continued to grow other revenue streams.
To expand that growth trajectory for the company going forward.
And to expand a little bit on my role so.
We are in a position where I'm here to help change that growth trajectory.
It has been reasonably successful have done it in the last 40.
<unk> 40 years, but several.
Yes.
The three companies I've been associated with the.
The good thing is with Adam and the team they have already put a number of the building blocks in place and have been working on a number of things I think we're going to be able to take advantage of this year, but we believe that we've got a significant opportunity to grow this company at a more rapid pace with a more varied revenue and profit stream that will benefit.
Shareholders in the long term.
That is very helpful. Thank you for for all the detail there.
Ward one for you on the mortgage side.
So obviously seeing good franchise sales and performance in that business I guess, one thing I've noticed.
Is it seems that there's more advertising going on on social media I see motto ads.
Ads here and there. So I guess are you guys ramping up kind of the consumer facing marketing of motto and just economically our costs on the mortgage side similar to the franchise side marketing related in terms of going into like marketing fund kind of pass throughs or would those be in SG&A.
And generally speaking if you can just kind of hit on that whether you guys are pushing towards are just more marketing in general to the consumer and assuming we also towards.
Mortgage and franchise professionals to potentially drive.
More franchise sales. Thank you.
Alright, Thanks, Brian a couple of different things back there. The first one would be yes, we do have a national marketing fund, it's very small compared to the <unk> side of the house as we are getting ramped up.
We do augment some of that with traditional SG&A spend but we're very judicious about it I mean, we're mainly emphasizing digital advertising.
The biggest thing that I think youre seeing is the growth of the network as the network grows we have not only our Facebook or Instagram or social properties that were advertising on but we're also supporting our <unk> or our loan originators and doing their own advertising as well and the offices. So but just recently we rolled out a program.
Called motto Rep, where we're actually doing the social media for our <unk> and our offices. So that's why I think youre seeing some of the increased.
Advertising out there because we are just taking steps to foster that grassroots effort that happens in every franchise, but particularly as this franchise starts to grow.
Very helpful. Thank you.
Our next question is from Stephen Sheldon with William Blair. Please go ahead.
Hey, good morning.
Yes.
Wanted to follow up on kind.
The mortgage and motto I guess, how are you thinking about the profit trajectory for I guess, a combined mortgage business heading into 2022 and it looks like.
Still a drag of about $5 million to adjusted EBITDA in 2021 IL <unk>.
A big factor in profitability Theyre, taking a step back but could you do.
We think about 2022, and 2023 could you approach breakeven profit or even some level of profitability for the combined mortgage operations.
Hey, good morning, Stephen It's Gary Great question, as we think about the mortgage business in general we're very excited about the opportunities. We are continuing to invest in low until that is pushing the breakeven point back a little bit current best estimates in terms of the quarterly profit breakeven is back half.
Back end of this year, so kind of looking at Q4, and then looking at profit contributions from the combined mortgage mortgage segment as we head into 2023.
Got it that's good to hear I appreciate that and then I guess on the international side, great to see Remax expand into some new countries.
How much more potential is there for that and any updates on the potential to boost your revenue per agent and some of these international markets because it seems like that could be.
Really important lever you still have to drive growth and profitability here at some point.
Yeah, Great question. So on the global side, we continue to see good growth were at a record high of over 56000 agents opening four countries.
We look at a number of them that are continuing to grow at a quick clip and the forecast and even looking at this year.
I believe that Argentina, and Brazil, even one of the newest Pakistan opens March one and already has sales and so we will see we believe we will see good growth out of those as far as looking at monetizing the global footprint.
It's been something that continues to be a focus as we've taking taken one avenue as a direction and doing that is the use of technology.
This year, we just launched successfully taking technology out of the U S into Canada for the first time.
We went across borders.
And we believe that that's going to set the foundation for the opportunity.
To possibly use technology as a driver between not only tools and services, but the referral network and look at maximizing or extending that revenue globally in the future.
Great. Thank you.
Our next question will come from John Campbell with Stifel.
Hey, guys. Good morning, Adam I enjoyed working with you.
For all these years and wish you the best of luck.
I don't know if this question, yes, absolutely I don't know if that question makes sense for carrier, Nick but if I look at the full year, 2% to 4% agent growth you guys have done out there.
You've talked to Canada agents may be hitting 25000, or so this year, if I assume a mid to I don't know high single digit or so on the international growth I think.
It may be the swing factor the difference between the two and the four.
Whether you guys are basically going to grow U S agents or not is that a fair way to frame it up.
I think that that's a reasonable look I mean.
As Steve mentioned top priority is reinvigorating that U S agent count growth, but still you have to remember right. There's differences to our model and we're going to look to grow those hundreds of agents in the U S and that's the expectation at least near term because we're focused on the right agent for remarks.
And getting that back on track is obviously a key priority.
Okay. That's helpful. And then I don't know if this is a fair question, but I guess bigger picture longer term.
You guys are pretty confident about the mid single digit organic growth over time and I know every year is going to have a kind of a different market backdrop. If you will but do you guys feel over the next couple of years is that mid single digit growth achievable. If you assume U S agent count is kind of static.
I think one of the things that we've really been focused on over the last couple of years is really diversification and broadening our revenue and profit opportunities and Steve even spoken alluded to that.
Creasing Lee in his previous remarks, and so as we think about that.
There's a lot of different levers that we can pull and so we're not entirely tied to that U S agent count now so we are assuming that the macro hangs in there.
And that the housing market continues to perform reasonably well.
Because we think about kind of three or four 5% we.
We feel confident in that even with kind of a modest agent count growth in the U S.
That's helpful. And then you guys have addressed this in the past.
But it does seem like you're exploring a couple of options or levers as you put it around the U S agent growth and you mentioned Thats our number one priority for the company this year.
I wanted to ask you again, because I think you guys have been asked this before but what is your thought on equity issuance I mean that has been.
Kind of a key tool for some of the faster growth peers is this something that you guys are exploring or is that possibly one of the options.
Yes, I'll take that so that is clearly one of the things that we believe could be a catalyst for us.
And the question is whether or not we plan on using equity going forward, because we will the issue will be.
Where do we want to apply it and it goes broader than just agent recruiting. It also goes to looking at.
At acquisitions.
Those two looking at.
Various.
Different types of new avenues of growth, we want to explore.
And so when we look at the opportunities, particularly as it relates to other revenue streams, we see that as significant obviously around the transaction, but then the other is.
Look I come from a from a background where.
What I was.
Started at Marriott.
<unk> now has 33 brands.
And I went to choice and went from nine brands to 13 brands and so I.
I come from a background, where the utilization of different revenue streams and brands.
He is a regular part of the franchise model.
So.
So I don't I think you should think that we're going to consider all of those options in terms of what are the best investments for US now on the other side, we think one of the strongest investments force immediately facing doses is share repurchase. So you can expect to see us pulling that lever as well, but there is a combination of tools that are available.
This is the one of the things exciting about this company is that we're in great shape financially. We're in great shape from the standpoint of our businesses, we need to make a couple of adjustments. But then the question is choosing which are the strongest and best opportunities to increase total shareholder value and that's what we're all about going forward.
That's a great response I appreciate that Steve.
Our next question will come from Matthew <unk> with Jones trading.
Please go ahead.
Hey, guys. Thanks.
I'm asking a question on behalf of Jason Stewart. So you just mentioned the share repurchase at what price does that look attractive to you guys.
And where would we expect you to go in at.
Okay.
Good morning, obviously good.
Good morning, Carrie why don't you start that I'll jump in.
Look obviously return of capital has continued to be a top priority of ours looking at balancing the dividend and the share repurchases were very confident in the future opportunities and we think there is tremendous value to be delivered given where the stock is trading right now and Youll see US continue to act opportunistically when we think.
We can purchase and deliver the best returns to shareholders.
Yes, so awesome.
Yeah, and I guess the way to think about it is we believe.
Our top priority as total shareholder return, which is why you'll see us pushing strong dividend.
Payments, but also share repurchase when it makes sense, we believe there is tremendous.
Tremendous amount of value in our stock currently so and we believe that that is probably going to be in place for a significant period of time and we plan on taking advantage of it.
That's great. Thank you.
Okay.
Our next question will come from Richard Hill with Morgan Stanley .
Please go ahead hi.
Yes.
Hi, Good morning, everyone. Congrats on a great 2021. This is jose here era and for asking a question for rich.
Just regarding the outlook for both Q1 and full year 'twenty two.
Is there any way you could kind of give a little color I know you guys spoke about Canada and some of the international parts, but kind of the components of each.
Each of the agent count growth rate in terms of where you guys are you expecting then how you came up with that.
One and half to two the highest within 2% to 4%.
Sure. So we really do look at it on a holistic basis over the whole year, obviously agent count can be a little bit cyclical and so looking as I mentioned earlier in terms of U S agent count growth kind of in the hundreds getting up over 25000 agents in Canada, So continuing to see strong acceleration.
There.
And then there'll be a little bit pragmatic in terms of the global growth kind of just to round out the outlook for the year.
Just given.
Kind of what we saw in 2021 and as Nick mentioned, we think there's tremendous upside in global and the global footprint continues to be a key differentiator for us from a competitive advantage perspective.
Great. Thank you.
And our next question comes from Tom <unk> with joint with K B W.
Please go ahead.
Hey, guys. Good morning, Thanks for taking my questions here. So could you guys talk a little bit about some of your technology initiatives I know last quarter, you booked the impairment on the first product, citing some lower adoption rates.
So could you just kind of give us a sense of kind of what products you have out there now that are working and gaining traction which ones.
<unk> been a little bit disappointed with.
Yes, I'll take that.
So we have obviously made some strategic investments.
In technology and I believe 2022 is going to be the year that we maximize the integration and simplification of them we'll.
We'll continue to.
Monetize first but we'll actually be announcing some new initiatives just next week in Las Vegas, Our convention on how these products are going to start to operate together early indications even on the first one we've released over this last month is we've doubled adoption rates even to our base intranet system, which is.
Our front door to everything.
And so as we continue to refine these systems were really following the guidance of our customers.
And a lot of ways, we have feedback that we have.
Great products, but they are running with multiple databases and multiple features that overlap and so as we look at 'twenty. Two this is the opportunity of simplification pulling some of them together.
Figure out which features rise to the top with the highest adoption levels and I believe that that's going to have a really positive impact on our retention rate as well and possibly lower churn. So.
So we're really optimistic about what the roadmap looks like for 'twenty, two and pulling together. These investments that are starting to pay off yes, Nick I agree with everything you just said one thing Tony in response to your question with regards to the impairment that I would note that doesn't take at all away from how we think about first we continue to be very positive about the product.
Seeing adoption, just ramped a little bit slower than what we expected and for better or worse, we have to go through some of the accounting.
The requirements to be able to evaluate that but that doesn't at all take away from how we feel about the product and the fact that we're seeing very positive results from our agents who have adopted it in terms of boosting their productivity continuing to operate in a low inventory environment as well.
Can you use to be another bright spot in terms of agents adopting it so for all the reasons that Nick said, we're still continuing to be positive in and looking at allocating capital to technology in those areas that we think are going to really drive recruiting and retention and deliver value yes.
As you mentioned and I'll throw one other piece in there that when we look at first we believe that that has had an immediate impact due to inventory levels, but we're seeing on average would've remax agent adopt first in their first 90 days, they're getting eight listings. They are 50% more productive than agents agents that use our 50% more productive than not and those that do.
Again, using and increase their productivity by 12%.
And we believe that Thats whats led to in the U S, Canada and global all three sectors.
Increase the average transactions per agent.
Over this past year, and we believe that.
These products are starting to show results just in that way.
Yes.
Thanks, I appreciate the clarification comments there on first and could you just remind us of your latest thoughts on.
The monetization of some of these products with agents is this kind of part of your broader diversification strategy of revenues just kind of your latest thoughts there.
Sure. So from a monetization perspective, we are charging incremental for first because of the value as Nick just mentioned that our agents are being able to drive it to a very modest investment compared to what they might spend in the rest of their portfolio. So obviously looking at having that captive audience continues to be an opportunity in a lever that we might Paul.
In addition to the other diversification efforts that we have successfully executed on in terms of monetizing other products to our networks like the wind low loan processing services.
Other opportunities that we might engage on in the future.
Great. Thanks, Gary.
And that will conclude today's question and answer session I would now like to turn the call over to Mr. Schwartz for any closing remarks.
Thank you Savannah, and thanks to everyone for joining the call today have a great week.
And this will conclude today's conference. Thank you for your participation and you may now disconnect.
Please wait the conference will begin shortly.
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