Q1 2025 RE/MAX Holdings Inc Earnings Call
Good morning, and welcome to Remax Holdings first quarter 2025 earnings Conference and webcast. My name is Sally and I will be facilitating the audio portion of today's call. At this time I would like to turn the call over to Andy shows Senior Vice President of Investor Relations.
Andy Schulz: Mr Schulz.
Andy Schulz: Thank you operator, good morning, everyone and welcome to <unk> Holdings first quarter 2025 earnings Conference call.
Andy Schulz: Please visit the Investor Relations section of Www Dot Remax holdings Dot com for all earnings related materials, including our standard earnings presentation and to access the live webcast and the replay of the call today.
Andy Schulz: 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 and open offices financial measures and outlook brand expansion competition technology housing and mortgage market conditions capital allocation credit facility dividends.
Andy Schulz: Share repurchases litigation settlement strategic and operational plans and business models.
Andy Schulz: Forward looking statements represent managements current estimates Remax holdings assumes no obligation to update any forward looking statements in the future.
Andy Schulz: 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 2025 financial results press release and other SEC filings also we will refer to certain non-GAAP measures on today's call. Please see.
Andy Schulz: The definitions and reconciliations of non-GAAP measures contained in our most recent quarterly financial results press release, which is available on our website.
Speaker Change: Joining me on our call today are Eric Carlson, our Chief Executive Officer, and Kerry Callahan, Our Chief Financial Officer Ward Morrison will join us for Q&A.
Speaker Change: I'd like to turn the call over to <unk> Holdings, CEO Erik Karlsson Erik.
Speaker Change: Thank you Andy and thanks to everyone for joining us. This morning, we started the year on a positive note from a financial perspective, as our first quarter results feature higher than expected revenues margins and profits our team's focus on operational excellence continues to help margins enhance overall profitability and strengthen our foundation Cary will provide more details in a few moments.
Speaker Change: Broadly the macroeconomic situation and the real estate market are clouded with uncertainty there are many puts and takes including tariffs rising inventory what could happen with interest rates, even recent debate and change an industry policies.
Speaker Change: Let me spend a moment on that.
Speaker Change: The National Association of Realtors recently modified its clear cooperation policy, which aims to provide more flexibility for home sellers and their agents, while maintaining the transparency and fairness of the MLS system.
Speaker Change: <unk> continues to support transparency and fairness as cornerstones in real estate. The recent introduction of the updated policy provides a balanced approach addressing diverse seller preferences, while preserving the intent of the clear cooperation policy.
Speaker Change: It is imperative that agents ensure transparency with their clients clearly outlining the implications of delaying the marketing of listings and helping them adjust expectations accordingly.
Speaker Change: Ultimately promoted listings to a broader audience remains in the best interest for most buyers and sellers are positioned that remax has consistently held and still supports.
Speaker Change: We are proactively helping our network navigate this change and we remain focused on those things within our control having the number one brand in real estate and the most trusted most productive professionals in the business gives us great confidence and our network's ability to adapt and succeed as they have for over 50 years.
Speaker Change: As we mentioned on our last call 2025 is an important year for Remax holdings and its brands. It's a year of transition continued building innovation evolution in execution.
Speaker Change: Since I arrived we have been working on improving the strength of our foundation people process products from platforms. These efforts.
Speaker Change: Our positioning us for long term success, we are focused on elevating our value proposition to help affiliates win more listings save time and profitably build their business.
Speaker Change: Since our last earnings call, we've unveiled bold new resources to help us achieve these objectives.
Speaker Change: All support our strategy of expanding and modernizing our products and services and enhancing our competitive advantage.
Speaker Change: We made several notable announcements this year involving refresh dynamic branding expanded access to productivity boosting agent education.
User friendly social Influencer platform advanced new marketing resources, a comprehensive global referral system and importantly, an innovative onboarding program called aspire that will help us attract and develop the next generation of top producing remax agents.
Speaker Change: At this year's or for convention in February we unveiled a refresh of our Remax logo type and balloon logo designed to continue efforts to modernize the branding online and on social media.
Speaker Change: Dynamic visual identity will help remax affiliates present themselves in a contemporary way across all digital platforms.
Speaker Change: We're excited to continue rolling out the refresh brand throughout 2025 and beyond.
Speaker Change: We also introduced maxx, engaging and easy to use social influencer platform that provides trending content and shareable posts and features rewards loyalty and gamification components.
Speaker Change: It helps the brand get loud get loud across social channels and throughout the Remax network encouraging agents to embrace the size and scale of the Remax brand, including our tools education and unique culture of highly productive and professional agents.
Speaker Change: We know it is critical for agents to present themselves online in a professional manner. The vast majority of customers start their home buying or selling journey online and three quarters of consumers right accompany at how they show up across digital channels, we're committed to providing tools to modernize how the number one brand in real estate and the most trusted agents in the industry.
Speaker Change: Present themselves across digital platforms.
Speaker Change: These first two programs, our refreshed branding and Max engage helped create a more consistent and professional remax image across the board.
Speaker Change: Exciting new marketing tools are also being deployed including the launch of our global marketing platform that can be customized at the local franchise an agent level. The successful Max Tech lead top tier program and AI powered website enhancements.
Speaker Change: We also recently launched the <unk> app, which enables agents to easily communicate with and maintain wholesale engagement with clients.
Speaker Change: Coming soon a new full service global referral system called Max refer will be available with AI layered in to easily enable a remax agent to find the right referral partner and track everything including the referral fee being paid our worldwide footprint and network of 145000 agents is unmatched and growing as evidenced by the fact.
Speaker Change: Our global agent count grew by over 10% in Q1.
Speaker Change: <unk> will help elevate the customer experience and help us further enhance our global competitive advantage.
Speaker Change: Which brings us to our innovative new Onboarding program designed to help shape. The next generation of top producing remax agents aspire.
Speaker Change: This strategic program combines world class education, the advanced technology solutions, and Max Tech and financial incentives to support agents, who are driven to greatness. We're very excited about aspire for a host of reasons.
Speaker Change: As many of the foundational pieces, we put in place last year, including improved technology and expansive customer feedback loop enhanced analytics and leveraging the power of the network scale aspire has been specifically designed to attract promising recruits increased agent productivity.
Speaker Change: Through both recruiting and retention have a positive impact on agent count.
Speaker Change: Enhanced recruiting represents one of the greatest opportunities to grow agent count. The fact is <unk> broker owners have not recruited as many agents in recent years as they did in the past.
Speaker Change: Many have told us their recruiting efforts would be more effective if remax to provide more assistance and onboarding and share more of the economic risk and recruiting new agents to the brand.
Speaker Change: These recruits could need a little more time to build their skills and increase their productivity to remax levels or transition their book of business. We know we can help those agents who want to be more productive achieve their goals.
Speaker Change: As a result, the educational component of the Aspire program, which is integrated into Max Tech is critically important and valuable.
Speaker Change: According to the <unk> company agents, who complete its 100 days to greatness course average seven closed transaction sides 75000 in gross commission income.
Speaker Change: And a handful of referrals during their first year retention is much higher when agents reached that level of earnings later in the second part of the year Agency inspire program will also benefit from the certified full service professional course, which will help them to become trusted professionals in virtually every aspect of the business.
Speaker Change: The technology piece is very impactful because agents, who use <unk> are nearly twice as productive as those who don't.
<unk> agents in the aspire program, we'll be learning the Max Tech platform as they build their sales skills multiplying the retention factor.
Speaker Change: Early responses and reactions by the network has been quite positive and we look forward to sharing more on our next earnings call.
Speaker Change: We've intentionally picked up the pace of change at Remax as we see many opportunities opportunities to improve the customer experience to expand and elevate our value proposition and diversify and generate more revenue.
Speaker Change: With recent exciting additions to our leadership team in both Canada and the U S. The continued maturation of our lead counts year, Remax media network and conversions mergers and acquisition programs alongside the slew of recently announced initiatives look it's a new day here at Remax and we are open for business now I'll turn it over to Kerry.
Kerry Callahan: Thank you Eric Good morning, everyone. Our first quarter results were a continuation of a trend we have consistently seen over the past year driving better than expected expense management to deliver positive margin and profit performance.
Kerry Callahan: Our topline performance was also solid this quarter, thanks to healthy broker fee revenue. Moreover, strong operational focus and execution helps produce lower than anticipated expenses. Despite the macro condition.
Kerry Callahan: Some of our notable quarterly financial highlights included total revenue of $74 5 million adjusted EBITDA of $19 3 million up one 5% over Q1 of last year adjusted EBITDA margin of 25, 9% an increase of 164 basis.
Kerry Callahan: Over the first quarter of 2024, and adjusted diluted EPS of <unk> 24.
Kerry Callahan: Looking closer at revenue, excluding the marketing fund revenue was $55 6 million a decrease of four 3% compared to the same period last year, driven by negative organic growth of three 2% and adverse foreign currency movements of one 1%.
Kerry Callahan: The decline in organic growth was principally due to lower U S agent count mortgage segment revenue and revenue from previous acquisition.
Kerry Callahan: We offset by higher broker fees.
Kerry Callahan: It's challenging mortgage market continues to impact our mortgage segment and it may take a few more quarters to return to consistent revenue growth. However, there are some positive signs in FY 2024 network wide transactions and volume increased compared to 2023.
Kerry Callahan: Recently, we also experienced a flurry of franchise renewals with long term motto owners recommitting for another seven years.
Kerry Callahan: Lastly, our annual broker and loan originator conference saw its highest attendance since 2019.
Kerry Callahan: These developments are encouraging indicators of the mortgage sectors resiliency and highlights the enduring value and opportunity of being a motto affiliate.
Kerry Callahan: For the fourth consecutive quarter margin performance improved thanks to our focus on ongoing operational efficiency first quarter, selling operating and administrative expenses decreased $2 7 million or five 9% to $43 million. There were many modest puts and takes but the cost reductions were primarily.
Kerry Callahan: Really driven by a decrease in professional fees and certain personnel and events related expenses, partially offset by higher equity based compensation and other technology investments.
Kerry Callahan: We continued to generate positive operating cash flow. However, our first quarter cash generation tends to be a little lower given the seasonality of our industry and our annual investment in <unk>.
Kerry Callahan: Consequently, our total leverage ratio was $3 61 to one as of March 31, almost the same as it was at year end.
Kerry Callahan: We expect <unk> to decrease as we get into the back half of the year as we benefit from stronger seasonal business trends, which should produce higher amount of free cash flow.
Kerry Callahan: We continue to believe our patients from a capital allocation perspective has been treating our priorities remain unchanged and we are strategically reinvesting in the business and building our cash reserves as we work to lower our CLR below three five times.
Kerry Callahan: Now onto our guidance.
Kerry Callahan: Given the uncertainty in the current macro environment, coupled with the challenging real estate market, we have a tougher than usual task when it comes to forecasting future results.
Kerry Callahan: However, we are excited about all of our ongoing initiatives and the momentum we are building.
Kerry Callahan: Our second quarter and full year 2025 outlook assumes no further currency movements acquisitions or divestitures.
Kerry Callahan: For the second quarter of 2025, we expect agent count to increase one five to two 5% over second quarter 2024.
Kerry Callahan: Revenue in a range of 70 to 75 million, including revenue from the marketing funds in a range of $17 million to $19 million and adjusted EBITDA in a range of 22 and a half to $25 5 million for the full year 2025, we still X.
Kerry Callahan: That agent count in a range from negative one to positive 1% over full year 2020 for revenue in a range of 290 to 310 million, including revenue from the marketing funds in a range of 71 to 75 million and adjusted EBITDA and.
Eric Carlson: A range of $90 million to $100 million with that I'll turn it back to Eric for closing comments.
Eric Carlson: Thanks Kerry I just wanted to note that this is ward Morrison his last earnings call. After an impressive 20 year run at Remax motto. When we low word is retiring from Remax holdings next month getting married and heading off to start a new chapter of life.
Speaker Change: We thank him for his many contributions and wish him nothing but the best of luck. Thank you ward with that operator, let's open it up for questions.
Speaker Change: Thank you we are now opening the floor for question and answer session. If you'd like to ask a question. Please press star followed by one on your telephone keypad that star followed by one on your telephone keypad.
Speaker Change: First question comes from the line of Anthony <unk> of Jpmorgan. Your line is now open.
Speaker Change: Thanks, Good morning.
Speaker Change: The first question is on the franchise sales line I know, it's a smaller revenue line, but down a decent amount year over year I was wondering how much of that is maybe just.
Comprehends versus.
Speaker Change: Whether that line item is going to be pressured from some of these other initiatives to come.
Speaker Change: Combined franchises in.
Speaker Change: Help grow teams and other things that might take away from the actual franchise sales.
Speaker Change: Yes, good morning, Toni. Thanks. Thanks for the question. So I think a couple of things as it relates to.
Speaker Change: So the annual conference it was actually a fantastic conference. This year, although attendance was down a little bit I think engagement was significantly up so from a revenue perspective, we were a couple of hundred thousand dollars down the other thing Thats pressuring that line is actually the wind down of some of our prior technology acquisitions, our Danbury acquisition in particular, that's pressuring that line item.
Speaker Change: Goodbye, a little Martha over half a million dollars, we're going to see that continue into Q2, but I think the thing that's really exciting about just the Q1 performance as we've seen the margin performance.
The increase we've obviously been focused on the cost side in 2025 is really about the additional revenue opportunities. So we did have.
Speaker Change: Some of that offset for Gadberry was modestly offset by some of our newer initiatives our lead concierge program a remark media network.
Speaker Change: Program and so I think for US, it's really thinking about how do we continue to grow the existing base the existing business, but also look at those ancillary ancillary revenue opportunities.
Speaker Change: We think ultimately, especially remark media network could be a seven digit revenue opportunity over the long term adjusted dependent it just really kind of depends right now given the macro how long, it's going to pay for that opportunity to ramp up.
Speaker Change: Tony.
Tony: Eric specifically kind of as it relates to maybe units.
Speaker Change: And just the market a bit I mean, I do think that there.
Tony: It's been it's been well documented.
Tony: There'll be some consolidation.
Tony: In the in the industry Youre seeing a little bit of that now I mean, I think it's been focused maybe a little bit more on the mortgage side than the real estate side today.
Tony: I do think that the.
Tony: If you want to talk about.
Tony: Valuations I do think that there is a little bit of.
Tony: No.
Tony: Spread was too large of a spread between the bid and the ask and I think that folks are still riding a little bit high kind of maybe some of those.
Tony: Spike units to the Covid years.
Tony: With all that said.
Tony: Look at it is for US it starts with kind of people process products and platform and like I talked about in the opening remarks.
Tony: One is we're retooling the team too is we definitely are seeing a lot of inbound activity.
Folks wanting to.
Tony: Make something happen with the Remax brand that can be through the broker channel that could be through a specifically.
Tony: I think that.
Tony: In the back half of the year I think that the CMA in the M&A activity will probably pick up I think right. Now also just with the overhang with uncertainty in the market. I think people are just kind of in a little bit of a wait and see attitude on that front and I think that they're also trying to hang on so those those opportunities that would.
Tony: Come to you from being on the edge of bankruptcy.
Tony: Quite.
Tony: There, yet, but I think that.
Tony: Those operators that are struggling that arent reinvesting in the business.
Tony: Yes that would probably come to fruition late Q2 earlier Q3.
Tony: Hopefully that helps.
Speaker Change: Yeah, No that's that's great color.
Tony: And then just my other question is.
Tony: It's just more on the Opex side, you all have done a good job of containing that even in the.
Tony: Even with the backdrop of inflation. So just wondering like how much you think is left potentially to go there before.
Tony: You've just kind of squeezed everything out you can.
Tony: Hey, Toni good morning, So I think that the Opex side I think we have really put in a good discipline around everything that we're doing and we're really trying to be strategic in terms of allocating every dollar that we spend so that we can run the business as efficiently as possible I think it's nice to have seen it show up in the financials, obviously not all.
Tony: This quarter, but it has been a trend, but I think what <unk> been able to.
Speaker Change: To demonstrate and so I think we've made some good decisions to we got a lot of the litigation behind US we are seeing some relief from a professional fee perspective, and Eric mentioned earlier really being thoughtful from a personnel perspective, making sure we've got the right people.
Speaker Change: On the team and really trying to contain everywhere that we can so it continues to be laser focused we continue to look at and everything around our return and it's really been more ingrained in our culture over the last probably 12 to 18 months than it was previously but I think right now we're really focused on turning that around and again focusing on the top line.
Speaker Change: The strong franchise model that we have if we can keep the costs contained and get the topline going youre going to see that really expand from a profit perspective, not only in terms of the absolute dollars, but the margin performance as well.
Speaker Change: Okay. Thanks.
Speaker Change: Best wishes award.
Speaker Change: Your next question comes from the line of Nick Mcandrew of Zelman. Your line is now open.
Speaker Change: Hey, guys. Thanks for taking my questions I just had a couple on the new aspire program and I think it seems like a really encouraging step towards narrowing the gap with some of the more flexible cap based models in the industry and I'm. Just wondering kind of how are you thinking about the competitive positioning of aspire maybe versus some of your peers and is it now good.
Speaker Change: Seat at the table with agent cohorts that might not have considered remax before and maybe just start there. Thank you.
Eric Carlson: Yeah. Thanks, Nick This is Eric I. Appreciate the question the teams kind of what gets worked hard on the on the aspire program and I think I've said on the on the last call. I mean, we are looking to turnover every rock and make sure that our value proposition stacks up.
Speaker Change: At least equal if not better.
Speaker Change: Two our competitors now we still have work to do but youre starting to see some of the fruits of that labor.
Speaker Change: Some of our announcements at our core and aspire is just one of those tools that are in our belt right now to help our brokers be more successful in recruiting agents. So I do think it opens up the top of the funnel.
Speaker Change: Along with other things that we've done like <unk>.
Speaker Change: Showing up a bit differently.
Speaker Change: Social and digital with the brand.
Speaker Change: The other pieces that we're talking about with our Max engage or our platform on our Max Tech. So these are things that our agents and brokers are interested in and so I do think that our top of the funnel is widening people are saying, hey, whats happening at Remax I'll might take another look and part of the challenge and running a small business.
Speaker Change: Obviously, economics, and making investments and be able to have the capital to do that and so we're sharing the financial risk with our brokers.
Speaker Change: To help them, one being able to recruit agents, but I think more importantly is onboard those agents and make sure that there is a path to professionalism and productivity.
Speaker Change: Because as we looked at.
Speaker Change: New agent Onboarding over the last few years.
Speaker Change: You see some higher churn rates and those folks that.
Speaker Change: Or are in the kind of one a 12 month or the 13 to 24 month period.
Speaker Change: And maybe this is Jake just takes me back to my subscriber days in TV, but bringing on folks and having them turn out at a higher rate actually just kind of it waste a lot of time money.
Speaker Change: Not only at HQ, but more importantly, with our brokers. So we want to make sure that we're providing tools processes systems that help our brokers and agents win more listings save time doing it.
Speaker Change: Can make a little bit of additional money and really bring profitability back to brokerages and so aspire not only I think opens up the top of the funnel whether you've thought about.
Speaker Change: The mid and the lower I think it pushes those it'll push those agents into our productivity and performance category that will help them in months six through 12 and 13 through 24. So the success rate will be higher long term and it really I mean, that's what we're that's what we're here to do build long term businesses.
Speaker Change: Yes. Thank you that's really helpful and I guess, one going off of that is I guess, how do you see aspire coexisting with may be your more traditional high performing agents and teams like is this something that could eventually evolve into a suite of flexible models that allow brokers to compete or is it just I'm curious kind of how both models coexist.
Speaker Change: I know you guys really want me to talk about the strategy you don't you.
Speaker Change: But look at looking forward.
Speaker Change: I think I've discussed it before I mean.
Speaker Change: The economics of being part of.
Speaker Change: Remax.
Speaker Change: Obviously, we're looking into those right and so I think aspire is our first step in trying to provide some flexibility in what agents and brokers need to set up a successful remax and gain and build market share in their local community and so.
Speaker Change: More to come on that but we will have flexibility more flexibility in our models more flexibility in our tool set.
Speaker Change: So today aspire can be used along alongside kind of are.
Speaker Change: We'll call it for lack of a better term our standard model that we've had in place for some time.
Speaker Change: As we move forward, you'll see more tools products and services again to help agents and brokers be more successful to build our market share in their local community.
Speaker Change: Great. Thank you guys and congratulations.
Speaker Change: Okay.
Speaker Change: Your next question comes from the line of Stephen Sheldon with William Blair. Your line is now open.
Stephen Sheldon: Hey, Thanks for taking my questions.
Stephen Sheldon: Just kind of following up on the new initiatives, it's great to hear about all of those.
Stephen Sheldon: Can you just give more detail on how the early feedback has been across the system with I guess inspire in others and do you think these initiatives could be enough to stabilize.
Stephen Sheldon: US agent count and an eventual return to growth just any thoughts there.
Stephen Sheldon: I mean, if you bet feedback from positive right adoption rate has been higher than I thought through the month of April.
As you can imagine.
Stephen Sheldon: We have at HQ, we have programs that we put in place to help brokers and agents brokers and then have to adapt those programs to what specifically works in their market is part of really the beauty of the Remax model right having Todd.
Stephen Sheldon: Our national or international umbrella, but then you know very successful.
Stephen Sheldon: Tenured.
Stephen Sheldon: Professional brokers in the local community that can help to adapt our programs to what their specific agents at their specific time of life in the community what the customer demographics with like right. They do those things and so we're working through that with our with our brokers today, but.
Stephen Sheldon: To specifically answer the question I mean look at the adoption rate is.
Stephen Sheldon: Better than I thought so I feel great about that I do think that we are building a value proposition that is making.
Stephen Sheldon: Agents within the Remax network very.
Stephen Sheldon: Very happy and outside of the Remax network look at some of the things that we're providing.
Stephen Sheldon: Thinking again about hey, what's going on over there I would like to be a part of that so we're seeing some some great inbound traffic from agents from other brokerages.
Stephen Sheldon: And it's exciting times, so do I think I mean look at overall real estate has some pressure on us.
Stephen Sheldon: I think that again, we're better positioned than others.
Stephen Sheldon: The professionalism the productivity of our agents and the trust factor that they bring and so in hard times.
Stephen Sheldon: And with consumer.
Stephen Sheldon: Consumer debt demand a bit low I think that our network is poised to be more successful.
Stephen Sheldon: So do I think that we can we can stabilize agent count and get back to growth absolutely I do yeah, and one thing I would add just from a from a numbers perspective.
Stephen Sheldon: With regards to that stabilization when we look at U S agent count in particular in April It was actually the best month of April going back to 2022. So we did lose kind of tens of agents in the U S. In April but it was better than the April performance that we saw both last year and in 2023, and I think that really is hopefully.
Stephen Sheldon: And start really building into the numbers the momentum that Eric was talking about that we're really hearing not only from the network our franchisees and our agents, but also I think to Eric's point, how the how we've shifted the narrative from a broader industry perspective.
Speaker Change: Got it that's helpful and really good to hear.
Speaker Change: Maybe following up on motto in first there Congrats award on the retirement and the great Ron.
Speaker Change: On the revenue trends I think Terry you gave some commentary yes, we saw a bigger decline there than then.
Speaker Change: I think we were expecting was that more about the market backdrop.
Speaker Change: It's a very challenging backdrop, but.
Speaker Change: And was that more about the backdrop or is there anything on the execution side and then just any update on leadership plans there going forward.
Speaker Change: Sure Yeah, I'll kick it off from the beginning so from from a revenue perspective. It is a lot of it is just really macro driven.
Speaker Change: It's obviously, a tough environment for both kind of the legacy motto business as well as what we're seeing in terms of the processing business.
Speaker Change: From <unk> perspective.
Speaker Change: So obviously, our open office count is down a little bit year over year, and so that's really probably the biggest driver there, but as I said in the scripted remarks, we really have seen some stabilization there over on a sequential quarter basis, which is good to see and I know that the engagement that we had.
Speaker Change: Our motto mile. Our event in April with very very positive. So people still see the importance in the field in terms of ancillary services and mortgage.
Speaker Change: That we think is still a tremendous growth opportunity for us, we just kind of got to lead through the macro to.
Speaker Change: Kind of get onto that to the other side of it.
Speaker Change: And then on awards retirement, obviously, we're we're super Sad and sorry to see him go although really excited.
Speaker Change: That is he is able to ride off into the Sunset and start this new chapter.
Speaker Change: Look we have a great team in place at our model when we low.
Speaker Change: So that team.
Speaker Change: Is doing great things right now I think that like.
Speaker Change: First off Ward is irreplaceable I'll say that.
Speaker Change: We do have an active search both internally and externally.
Speaker Change: Obviously with the mortgage market there is a lot of great candidates out there and so we will look both within the walls and outside of the walls and we'll have an announcement on that I hope before our next earnings call.
Speaker Change: Sounds good thank you.
Speaker Change: Your next your next question comes from the line of John Campbell of Stephens, Inc. Your line is now.
Speaker Change: Yeah.
John Campbell: Yes, thanks, good morning, guys.
Speaker Change: I'd like to extend the sentiment toward as well it's been a pleasure working with you all these years and wish you the best.
Speaker Change: So piggybacking off of Tony's question earlier about.
Speaker Change: The ability to grow margins and profits I think thats been for four straight quarters for you guys. Despite the topline pressures.
Speaker Change: It sounds like from Carey's comments, maybe a little bit of a culture corporate shift around a greater focus on cost control. So.
Speaker Change: My question for you is once you guys get back to revenue growth are there are there areas of the business, where you feel like you'll need to revisit from a reinvestment standpoint, and then bigger picture, where do you feel like you can take margins over maybe the medium term just assuming better revenue growth.
Speaker Change: Yes, it's a great question I mean, we are really it has been pretty broad based and I think right now it is the focus right now in terms of where we're allocating dollars in allocating time is really getting back into that value proposition. So really looking at everything from product services tools platforms to really help our agents win more listings being more efficient.
Speaker Change: And really help to drive profitability. So that's really where we're focused right now really are kind of looking more on that in that marketing area from a technology perspective, and also making sure. We've got the right service and support staff to be able to deliver that value out into the field as efficiently and effectively as possible.
Eric Carlson: John This is Eric I would just say look at the investments we're making some are success based like we've talked about in the past, which are are good things for us to sink our teeth in I think the other thing is like.
Speaker Change: As we're as we're kind of rebuilding the foundation of the flywheel.
Speaker Change: Will I think youre spot on obviously, we will be making additional investments to grow the top line, but we'll be very purposeful about those.
Speaker Change: Not only is it cost control and thinking about how to do things more efficiently, but being purposeful in our investments and making sure that we're getting a return on our capital.
Speaker Change: For our shareholders. So.
Speaker Change: More to come on that but.
Speaker Change: We really appreciate the questions you're spot on there.
Speaker Change: Okay I appreciate that and then on the acceleration of international agent growth that's been.
Speaker Change: Great to see.
Speaker Change: Just two questions related just bigger picture on international I guess first just kind of what's driving that momentum and then secondly.
Speaker Change: I think youre getting.
Speaker Change: To roughly I think it was.
Speaker Change: 220 per agent.
Speaker Change: Per year last year that was about 9% of the U S agent.
Speaker Change: Revenue per agent what stops you guys from just being a little bit more aggressive on the international pricing front is there is there a little bit of low hanging fruit and so I can get to overtime.
Speaker Change: Yes.
Speaker Change: Yeah look I mean, I think on the growth on the growth part and the momentum we've got.
Speaker Change: We just have some outstanding operators.
Speaker Change: Out there and I think when you think about the.
Speaker Change: The time that the brand has been there.
Speaker Change: It's gaining momentum in certain markets. Some of that is is the brand and kind of like the groundswell a lot of it is just the outstanding operators, we have I mean I was in Argentina.
Speaker Change: In March visiting one of our operators that were celebrating 20 years.
Speaker Change: John thousands of agents and you can imagine with the Argentinean economy.
Speaker Change: 90, 495% of the deals are all cash but.
Speaker Change: Thousands of agents enthused about.
What it has to be part of the <unk> brand and the opportunity that exists life changing events that happen with agents.
Speaker Change: I want to say our agents are.
Speaker Change: Somewhere in that 354 times as productive as others. So it's really exciting to see and we're seeing growth in South America, we're seeing growth in Portugal.
Speaker Change: And I think that part of it is just obviously the brand and part of it is a big part of it is really the operators and you're right. I mean, I think we're trying to provide an approach where the.
Speaker Change: The operators can be successful with the fees we charge.
Speaker Change: For the.
Speaker Change: For the brand that we provide and theres other opportunities I mean, we've talked about are our marketing.
Speaker Change: Services platform at our four along with our Max engage app.
Speaker Change: Both those are going to be in Spanish and.
Speaker Change: We will have additional worldwide opportunities then may be just the fee traditionally that debt.
Speaker Change: Got you and the team have thought about as it relates to the international business at Remax.
Okay. Thanks for the color I appreciate that.
Speaker Change: Our last question for today comes from the line of Tony Mccoy TB W. Your line is now open.
Speaker Change: Hey, good morning, guys.
Speaker Change: Do you have a real time view of how lean out to the agent market share in the U S is trending.
Speaker Change: To get a sense of if something that declines that you've seen are as much a function of the industry at large or armchair somebody is still kind of re maxim specific things.
Speaker Change: Yes, Tony I mean, we look at market share across multiple different dimensions in terms of agent count and productivity because our agents are twice as productive as the industry average and have been for 17 years looking at percentage of agent count in our or something isn't necessarily as representative.
Speaker Change: I mean, obviously the industry as a whole has contracted.
Speaker Change: Obviously, we're doing what we can to kind of turn the ship in terms of stabilized and returned to growth as we talked about earlier and as I mentioned, we're looking at some of the green shoots in April.
Speaker Change: From that from our efforts really starting to impact that and so I would say that.
Speaker Change: The trends around.
Speaker Change: Our performance from an agent perspective is actually a little bit better than the industry just given.
Speaker Change: The overall productivity in terms of how our agents actually impact the market and the number of transactions that they do.
Speaker Change: Yeah.
Speaker Change: Okay got it thanks.
Speaker Change: And then switching gears.
Speaker Change: With regard to <unk> update to the clear cooperation policy.
Speaker Change: Does the Max corporate have a house view.
Speaker Change: Provides to its franchisees around the revised rule changes I know some players in the industry.
Speaker Change: Anchoring yourself to one extreme or the other.
Speaker Change: Is your view just to kind of let the franchisees maintain compliance with their local MLS, which is where does the new normal rule seat and kind of the decision making too.
Speaker Change: Yes, great Great question Tommy.
Speaker Change: Obviously, we've had some kind of.
Speaker Change: Public statements.
Speaker Change: The industry rags and I think the.
Speaker Change: We chatted a little bit about it on the last call I mean, one is we.
Speaker Change: Obviously, we provide education and guidance to our brokers into our agents.
Speaker Change: Obviously, we want our brokers.
Speaker Change: To comply with all kind of the state local laws rules et cetera, but look at where really we are steadfast on the side of standing for what's best for the consumer.
Speaker Change: And that consumer experience so.
Speaker Change: I think that overall.
Speaker Change: As I said in my opening remarks, we're standing for transplant transparency and the broadest distribution of listings. We think that's best for the vast majority of consumers who are trying to transact in real estate that doesn't mean that there are times when our private listing.
Speaker Change: As needed or by the way being used and we'll be we'll be set up to help our brokers and agents with that process. Some of our brokers use their own private listing processes today, but.
Speaker Change: But we just think the vast majority of.
Speaker Change: Transactions are lithium should be <unk>.
Speaker Change: Greatest greatest distribution, and we're really going to stay on the side of the consumer.
Speaker Change: And the agent experience and so we think that that's served us well for the last 50 years, and we're really thinking about the business long term not for kind of short term profits or to try to win agent count by having.
Speaker Change: Special offers.
We're trying to build something special here again and building the foundation and building a long term view of what's best for brokers agents and consumers.
Speaker Change: Great. Thank you.
Speaker Change: I would now like to hand, the call back to Andy Schulz. Please go ahead.
Speaker Change: Thank you operator, thanks to everyone for joining us on the call. Today. This concludes today's call have a great weekend.
Speaker Change: Thank you for attending today's call you may now disconnect Goodbye.
Speaker Change: Please wait the conference will begin shortly.
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