After reporting solid first-quarter earnings results on Thursday, RE/MAX has turned its attention to the future with its robust tech stack, skyrocketing agent count and growing mortgage and title services, all of which the company believes is setting company up for one of its best years ever in its 48-year history.
“For the 11th consecutive year, REMAX agents, on average, outsold competing agents more than two to one,” CEO Adam Contos said in a post-earnings call on Friday. “RE/MAX agents average 16 transaction sides compared to the average for all other competitors at 7.3.”
“That says a lot about the quality of our franchisees, the quality of the agents they recruit, the quality of our tools and services, and most importantly, the quality of the customer experience you can expect from REMAX globally,” he added. “That momentum continues today, and we look forward to sharing more good news as 2021 proceeds.”
During Q1, RE/MAX grew its revenue 2.9 percent to $72.3 million and remained profitable with a net income of $1.1 million. The company also grew its total agent count 6.4 percent to 140,214 agents, with the majority of the growth happening in international markets outside of the United States and Canada.
The U.S. agent count actually dipped 0.6 percent; however, Contos said he’s confident a booming housing market and RE/MAX’s continued tech, training and agent benefit investments will energize the company’s domestic agent count growth.
“In many markets, buyers are racing to make an offer on the house they want, often over listing price and that competition creates an attractive environment for sellers,” he said while mentioning homes, on average, are selling three weeks faster than 2020. “The good news is an incredible level of demand and a large number of have transactions occurred.”
“RE/MAX agents are using their industry experience to help their clients achieve the best outcome. Our affiliates are optimistic that they can have an even better year than they had in 2020,” he added.
On the tech front, RE/MAX Chief Customer Officer Nick Bailey said the brokerage is expanding its booj platform to Canada, which he said is an important key to RE/MAX’s international growth. “It’s an important step that we’ve been working on for some time. We believe it will open the gates to global tech expansion, making yet another important milestone in our rich history,” he explained.
The company said it will continue to make enhancements to its existing tech, data and marketing platforms, roll out additional education and training tools, and hone in on its overall value proposition with agents and brokers through unique offerings, similar to the company’s newly-minted agent healthcare plan with Aetna.
Lastly, the company said growth at Motto Mortgage has contributed to its agent growth during the first quarter.
“Accelerating growth at the Motto Mortgage network, as well as the diversification of Motto ownership across a variety of leading real estate brands is exciting and building,” Motto Mortgage President Ward Morrison explained. “We’re gaining market share in the broker channel right now, as more real estate brokers and teams realize the value of having an ancillary mortgage business and embrace the benefits of the franchise model.”
As other mortgage companies are predicting a slowdown this year due to rising interest rates and dampened refinancing activity, Morrison said Motto Mortgage is on course to double its loan volume year over year and open 50 new offices by the end of 2021.
“Although many industry pundits are forecasting the slower 2021 as a refi-boom fades, we believe we have a good chance to achieve our goal of doubling last year’s volume in part because of Motto’s unique position in the purchase market,” he said. “Simply put model loan originators are often tied directly to a purchase pipeline driven by real estate agents.”
The company ended the call with forward-looking statements for the second quarter and fiscal year 2021. During Q2, RE/MAX expects to ramp up agent count growth by 7 to 8 percent year over year. Thanks to a red-hot spring homebuying season, the company expects to pull in revenues topping $78 million with an adjusted EBITDA of $25.5 million to $28.5 million.
For FY 2021, the agent count is expected to increase by 5 to 6 percent. Revenues are predicted to rise to upwards of $310 million, as the adjusted EBITDA reaches between $103 million and $107 million.
RE/MAX’s stock has yet to experience a post-earnings boost (NYSE: RMAX). The company’s stock traded at the $37-range most of Thursday and closed at $37.12. However, the company’s stock opened at $35.98 — a 3.07 percent decrease from the previous day. As of Friday morning, RE/MAX’s market cap stood at just over $700 million.