RE/MAX announced its final earnings for 2019 Thursday, revealing that its revenue last quarter came within a hair of analysts’ expectations for the company.
The report also showed that the company’s total agent count over the course of 2019 increased 5.3 percent.
In a statement, CEO Adam Contos celebrated the increasing agent numbers.
“Recent RE/MAX recruiting initiatives and Motto marketing efforts generated positive results almost immediately, contributing to a bounce back in our U.S. agent count,” Contos said.
He added that everything from the company’s various investments to its growing ranks mean that it is “entering 2020 with momentum.”
Here are key takeaways from the company’s latest earnings report:
$68.2 million: RE/MAX’s revenue last quarter
According to Thursday’s report, the company brought in $68.2 million during the final three months of 2019. That number represents an increase of 34.1 percent compared to the same period in 2018.
The report explains that the increase in revenue was “primarily due to the January 1, 2019 acquisition of the Marketing Funds.” The comment refers to the acquisition of two dozen companies that hold advertising funds collected from RE/MAX affiliates.
RE/MAX picked up the companies from former CEO Dave Liniger.
Thursday’s earnings report also revealed that net income during the final three months of 2019 was $2.9 million. The company further reported earnings per share of $0.16.
$68.26 million: The revenue analysts had expected
Leading into Thursday’s earnings report, analysts had expected RE/MAX to announce $68.26 million in revenue, which would have represented a 34.3 percent year-over-year increase.
RE/MAX got very, very close to that target, but ultimately came just a bit short.
However, analysts had also expected the company to report earnings per share of $0.47 — higher than what it actually did — which would have been a 4.1 percent dip compared to one year prior.
RE/MAX stock Thursday afternoon, before the earnings report’s publication, was trading at just over $40.50 per share — up for the day but down very slightly compared to one year ago.
After the company published the report, its stock price fell very slightly in after hours trading.
$282.3 million: The company’s total revenue for 2019
Over the course of the entire year, RE/MAX ultimately pulled in $282.3 million in revenue, and generated $25 million in net income. The company’s earnings per share over the course of the year were $1.40.
Total 2019 revenue excluding the Marketing Funds fell 1.2 percent year-over-year to $210.0 million.
The report further reveals that at the close of 2019, RE/MAX had $83 million in cash and equivalents, up from $23 million one year earlier, and $225.7 million in outstanding debt. That’s $2.1 million less in debt than the firm had at the end of 2018.
In her statement, RE/MAX chief financial officer Karri Callahan said that the company plans to “make strategic investments” and “deepen our connection with our networks” going forward.
130,889: The number of agents RE/MAX had at the end of 2019
Though revenue fell slightly short of expectations, RE/MAX’s growing agent ranks was one of the company’s highlights in Thursday’s report. In total, the company closed out 2019 with 130,889 agents — a 5.3 percent year-over-year increase.
Callahan said in her statement that agent ranks grew thanks to an incentive program that involved broker-owners waiving some fees for new recruits. Though the program will reduce revenue this year by between $2 million and $3 million, Callahan described it as “an investment in our franchisees’ and agents’ businesses.”
She also said that the program is working, and that “initial returns on this investment are encouraging as evidenced by our fourth quarter U.S. agent count improvement.”
RE/MAX additionally expects to increase its agent count by between 3 percent and 5 percent in 2020.
$71.5 million: RE/MAX’s revenue in the previous quarter
RE/MAX last reported earnings in October, when it revealed it brought in $71.5 million in revenue during the third quarter of 2019. At the time, the company also said that its agent count had increased 3.5 percent year-over-year to 128,258.
However, in just the U.S. and Canada agent count declined during the quarter by 1.9 percent to 84,067.
Net income during the third quarter of 2019 was $9.2 million.
During the second quarter of 2019, RE/MAX brought in $71.4 million in revenue and saw a 3.2 percent year-over-year increase in total agent count.
Update: This post was updated after publication with additional information from RE/MAX’s earnings report.