The record quarter was largely driven by the company’s purchase in July of RE/MAX Integra, a $235 million deal that marked the largest franchise acquisition in the brokerage’s history.
RE/MAX Holdings brought in a record of $91 million in revenue during the third quarter, largely driven by the company’s recent acquisition of RE/MAX Integra, according to a statement after markets closed on Monday.
That surge in revenue was up 28 percent year over year or $19.9 million, in contrast to revenue of $71.1 million seen during Q3 2020.
Excluding Marketing Funds — the branch of RE/MAX that holds advertising funds collected from RE/MAX affiliates — revenue rose 25.9 percent to $67.7 million, made up of 6.9 percent organic growth, 18.3 percent growth from acquisitions and 0.7 percent growth from foreign currency movements, the company noted.
The company’s net loss was $25.1 million, or $1.34 per share.
Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was $35 million with an adjusted EBITDA margin of 38.4 percent and adjusted earnings per diluted share (EPS) of $0.71.
RE/MAX, which was founded in 1973 and went public in 2013, increased its agent count during the third quarter by 4.6 percent to 140,936 agents. Across the U.S. and Canada, agent count increased 2.2 percent to a total of 85,656 agents.
Back in the second quarter, the company had increased its revenue by 48 percent year over year to $77.2 million, and its global agent count by 6.3 percent over the course of the quarter to 140,201.
RE/MAX Holdings CEO Adam Contos said the growth was “driven by contributions from the largest Independent Region acquisition in our history, broad-based performance in our core operations, and a healthy housing market.”
“Our performance reaffirmed that the investments we’ve made in recent years have significantly diversified and expanded our revenue and growth opportunities,” he added. “Organic revenue growth excluding the Marketing Funds also was strong, up nearly 7 percent in the third quarter, with much of the incremental revenue translating into profit.”
In July, RE/MAX purchased RE/MAX Integra for $235 million, marking the largest franchise acquisition in the company’s history. At that time, RE/MAX Integra’s North American regions encompassed 19,000 agents and 1,100 offices across Canada and the United States. In its preliminary earnings release, the company noted that the results of the acquisition far exceeded their initial expectations.
“Our two primary brands are vibrant and growing,” Contos said in a statement. “The July acquisition of RE/MAX Integra’s North American operations performed better than expected during the quarter and brought nearly 20,000 agents into our company-owned regions and overall, the RE/MAX network has grown by more than 6,000 agents year over year.”
“Our Motto Mortgage footprint continues to increase as well, with healthy franchise sales and a year-over-year increase in open offices of more than 30 percent,” Contos added.
The company’s positive results thus far has spurred RE/MAX Holdings to increase its adjusted EBITDA forecasts for 2021, the statement noted.
“Looking further ahead, we are excited about our growth prospects in 2022 and beyond,” Contos concluded.
RE/MAX will also host an earnings call on Tuesday, Nov. 23, at 8:30 am ET.