A drop in expenses was enough to offset falling revenue from franchise fees and annual dues that make up about 70 percent of RE/MAX’s revenue, the company said on Thursday.
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RE/MAX saw its revenue fall 5.4 percent in the final three months of last year, capping off its 10th consecutive quarter of falling revenue as it lost agents in the U.S. and trimmed office space, the company reported on Thursday.
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The firm saw the number of agents in the U.S. continue to slide, as it lost about 3,800 agents in the country while adding more overseas. That number continued falling this year, RE/MAX said, as total agent count in the U.S. and Canada fell to 75,411.
The company said it remained focused on becoming more efficient, and it reported turning a profit in the quarter.
“Our continued focus on operational efficiencies contributed to higher-than-forecasted fourth-quarter profit and margin performance, a trend we have seen now for three quarters in a row,” RE/MAX Holdings CEO Erik Carlson said in a statement. “With a strengthened leadership team overseeing exciting new initiatives and revenue opportunities, we are entering 2025 with increasing momentum and remain centered on delivering the absolute best customer experience possible.”
RE/MAX pulled in $72.5 million in the fourth quarter, a decline of $4.1 million from the same time a year before.
The company cut its operating expenses by 21 percent during the quarter, trimming $18.1 million in expenses.
The lowered expenses were enough to help the company turn a $5.8 million profit in the quarter, which was up from a $10.9 million loss a year earlier.
The drop in expenses was enough to offset a slide in an important revenue stream for the company: franchise fees and annual dues. The company said the decline was primarily driven by the loss of agents in the U.S., as well as a drop in revenue from previous acquisitions.
Declines in agent count can spell trouble for RE/MAX, which gets about 70 percent of its revenue from franchise fees and annual dues.
Still, RE/MAX’s total agent count is up significantly over the past decade. The company reported having 146,627 agents in total; that’s up 67 percent compared to 2011.
RE/MAX reported a continued decline in the total number of Motto Mortgage franchises, which fell by 8.5 percent in the quarter, to 225.
RE/MAX reported holding $96.8 million in cash at the end of the year, up $14 million from a year earlier. It holds $440.8 million in outstanding debt.
The company said it expects to earn between $71 million and $75 million in the first quarter of this year. That would represent another decline of between 4 percent and 9 percent compared to the first quarter of 2024.
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