RE/MAX reported $50.8 million revenue in the fourth quarter of 2018, a year-over-year 4.8 percent, according to the company’s Thursday earnings release, beating the consensus estimate of $50.27 million in quarterly revenue. The company also reported $6.3 million in net income in the fourth quarter.
RE/MAX reported adjusted earnings of $0.49 earnings per share, in line with the consensus.
For all of 2018, RE/MAX reported $212.6 million in revenue, a year-over-year increase of 9.8 percent, but below the Zacks consensus estimate of the $219.1 million. The company reported a total net income of $27 million for 2019.
“We are pleased with our fourth quarter performance as our differentiated business model continued to demonstrate its strength in a correcting market,” Adam Contos, RE/MAX CEO said in a statement. “For the full-year 2018, we increased RE/MAX agent count, the number of open Motto franchises, revenue, Adjusted EBITDA and free cash flow while continuing to invest meaningfully in future organic growth opportunities despite a double-digit reduction in U.S. existing home sales to end the year.”
“We believe the agent-centric RE/MAX model is more insulated and resilient than many others in our industry and our expanding Motto business provides another organic growth channel during times like these,” added Contos.
RE/MAX’s total agent increased 4.4 percent year-over-year, ending the year at 124,280 agents, with 84,449 agents in the United States and Canada. The number of Motto Mortgage franchises the company has opened more than doubled to 78 offices at the end of the year.
Franchise fees and annual dues were once again the franchisor’s biggest money maker. Those recurring revenue streams accounted for 67.4 percent of revenue for the fourth quarter of 2018.
RE/MAX recently re-organized its franchise growth initiative, going from 10 regions to four and assigning each franchise under one of four stages of growth. To support that new growth, the company announced three new senior promotions.
“We have great momentum as we enter into the new year,” Contos said in a statement. “Our position of strength enables us to consider smart organizational changes that evolve and improve the business. For instance, we recently reinvented our RE/MAX brokerage support structure to make it more focused and impactful.”
The company also recently announced a new branded video tool platform for agents to create digital business cards and a partnership with Lovepop that will give agents discounts on three-dimensional cards.
Looking ahead, the first booj-developed technology products will roll out this year, according to Contos.
In the first quarter of 2019, the company expects agent count to increase 3.5-4.5 percent year-over-year and revenue to fall in the range of $70 to $73 million. For the full year of 2019, RE/MAX expects agent count in 2019 to increase 2-4 percent year-over-year and revenue in the range of $287 to $291 million.