Thanks in part to rising home prices and a recent lucrative acquisition, RE/MAX on Thursday revealed that its revenue jumped 25.9 percent year over year during the first quarter of 2022 — beating the company’s also-strong performance from one quarter prior and tying an earlier benchmark.
The company’s latest earnings report specifically shows that RE/MAX brought in $91 million in revenue between January and March of this year. That beat the $89.2 million in revenue RE/MAX earned between October and December 2021, as well as the $72.3 million it earned during the first quarter of last year.
The revenue numbers also roughly tie the third quarter of 2021, when RE/MAX set a company record of $91 million in revenue. However, during that quarter, RE/MAX reported a net loss of $25.1 million.
During the first three months of 2022, on the other hand, the company managed to earn a profit of $1.5 million. That’s up slightly compared to the first quarter of 2021, when RE/MAX reported a profit of $1.2 million.
Thursday’s report also reflects RE/MAX Holdings’ final quarter under the leadership of longtime CEO Adam Contos. The company announced Contos’ departure in January. He then served as co-CEO with Steve Joyce in March while handing off the reins. Contos finally departed RE/MAX after nearly two decades at the end of March.
In Thursday’s report, Joyce attributed the latest quarter’s strong numbers to “double-digit organic revenue growth in our core operations and continued strong performance from our acquisition of the RE/MAX Integra North American regions.”
The company bought RE/MAX Integra’s North American regions last year in a deal that was the largest ever in the company’s history.
Joyce also said in the report that the company’s numbers have risen thanks to “higher attendance at our recent annual agent convention, rising home prices and our expanding mortgage business.”
The overall picture that emerges is one of a company that is managing to grow both profit and revenue, albeit at a slower pace in the latter case.
RE/MAX also reported minor increases to its agent count. Overall, the company had a total of 142,405 agents worldwide as of March 31, which is an increase of 1.6 percent compared to one year earlier. In just the U.S. and Canada, RE/MAX grew its agent count by 0.5 percent in the first three quarters of the year to 85,160.
Heading into Thursday’s earnings report, RE/MAX stock was trading for just under $25 per share. That was up for the day, but down for the year so far, with shares topping out above $30 as January began.
RE/MAX had a market cap of approximately $469 million as of the close of the markets Thursday.
Other details in Thursday’s earnings report include the fact that RE/MAX’s Motto Mortgage brand increased its number of franchises by 27.3 percent. Motto Mortgage now has a total of 191 offices. Joyce said in the report that “Motto Mortgage franchise sales reaccelerated during the first quarter” of 2022.
During an earnings call on April 29, Joyce said he predicts the mortgage businesses have the ability to expand much faster than current projections and have the ability to eventually gross $50 million annually.
“We would like to get 1,000 open offices much sooner than our current growth trajectory forecast,” Joyce said. “We believe Motto and Wemlo are each capable of generating $50 million or more in annual revenue.”
RE/MAX also currently has $118.5 million in cash and cash equivalents, the report notes, down about $7.8 million from the end of the prior quarter.
In the report, Joyce indicated that RE/MAX’s focus going forward is “on strategic moves which will help us increase our U.S. agent count and accelerate the expansion of our mortgage business.”
“We continue to evaluate the best opportunities,” he concluded, “both organic and inorganic, to drive our near- and longer-term growth.”
RE/MAX will also host an earnings call on Friday, April 29, at 8:30 am EDT.
Update: This post was updated after publication with additional information from RE/MAX’s earnings report, and with additional background about company history and operations.