A robust housing market and agent count growth nudged Re/Max’s profits higher in the second quarter compared to the previous year, the real estate franchisor reported.
Re/Max posted net income of $7.5 million in the second quarter, up 8.2 percent year over year, as revenue rose by 12.5 percent to $48.8 million.
Revenue growth was “primarily due to contributions from the acquired independent regions, agent count growth and fee increases in the Company-owned regions,” Re/Max said in a statement.
The company claimed 116,270 agents worldwide, up by 5.7 percent year over year. Its U.S. and Canada combined agent count rose by 2.8 percent to 84,302 agents.
Looking ahead, Re/Max raised its 2017 agent growth forecast, expecting it to rise 4.5 to 5.5 percent over 2017, “driven by agent count growth outside the U.S. and Canada.” That’s up from its previous guidance of 4 to 5 percent.
Total operating expenses came in at $26.0 million for the quarter, up 14.6 percent compared to a year ago.
“This increase was due to additional amortization expense from the acquired independent regions as well as increased selling, operating and administrative expenses, many of which related to the acquired independent regions and the initial investment in Motto,” Re/Max said.
Motto Mortgage is Re/Max’s new mortgage brokerage franchise. Co-CEO Adam Contos cited Motto Mortgage, an initiative that Re/Max has expressed high hopes for, as a lever of growth — along with Re/Max’s ability to expand its network and reacquire independent regions.