Real estate franchise giant RE/MAX continued to grow in the second quarter of the year, posting higher revenues and expanded profits even as the company downgraded expectations for 2022 amid a slowing home market.
The company brought in $92.2 million in revenue from April to June, a 1.3 percent increase from the previous quarter and 19.3 percent higher than the same period last year, according to its earnings report released Thursday. The company’s profits rose to $5.8 million in the second quarter of the year — up from $1.5 million in the first three months of 2022.
RE/MAX’s agent count also grew by 2.7 percent to 143,939.
“Our strong second-quarter results demonstrate the strength and resilience of our 100%-franchise model, particularly amid shifting housing market conditions,” RE/MAX Holdings CEO Steve Joyce said in a statement accompanying the report. “RE/MAX INTEGRA’s North American regions again contributed meaningfully to both our top-line and bottom-line performance. Motto, which opened its 200th franchise during the quarter, continues to grow and RE/MAX agent count reached another record high driven by Canadian and global growth.”
Despite these gains, the company reduced its outlook for the full year’s financial numbers in light of a housing market that has slowed more quickly than expected as mortgage rates rebounded from their previous lows.
Agent count — previously expected to rise by somewhere between 2 percent and 4 percent in 2022 — is now expected to rise by somewhere between 1 percent and 2.5 percent.
Expectations for the company’s 2022 revenues and adjusted EBITDA were likewise adjusted downward.
The company’s revenues had been on an upswing in recent months, fueled by modest increases to its agent count, big home price growth and a big acquisition.
RE/MAX reported a $1.5 million profit in the first quarter of 2022 as its revenues ticked up to $91 million from $89 million in the closing months of 2021. Revenue was also up significantly year-over-year, from $72 million in the first quarter of 2021.
The company pointed to strong organic revenue growth and the purchase of RE/MAX Integra North American regions — the largest in the company’s history — for much of the earnings gains in the first three months of 2022.
RE/MAX had also been pushing to expand its mortgage franchise business, which Joyce said in April had the potential to expand much faster than the company had initially planned. The company’s Motto Mortgage brand had expanded to more than 200 offices in the second quarter of the year.
“We would like to get 1,000 open offices much sooner than our current growth trajectory forecast,” Joyce said in May. “We believe Motto and Wemlo are each capable of generating $50 million or more in annual revenue.”