Real estate mega franchisor RE/MAX posted solid revenue growth for Q2 2022, hitting its targets as the company brought in $92.2 million, but also saw fractional year-over-year loss in its United States agent count—even as it continues to make significant gains internationally.
With 1.7% organic growth, net income coming in at $5.8 million and total agent count growing 2.7%—also in line with projections—RE/MAX Holdings CEO Steve Joyce said the company is showing “strength and resilience” against “shifting housing market conditions.”
“We intend to leverage these strengths to actively seek the best opportunities that will support our future growth,” said Joyce, who took over as CEO at the beginning of this quarter, in a statement.
RE/MAX also announced a cash dividend of $0.23 per share earlier this week.
At the same time, however, the company adjusted its full year guidance down “to reflect current housing market conditions.” As sales and home price growth have slowed across the industry, RE/MAX is among many real estate companies that have been hunkering down, preparing for a broad market pullback.
The firm’s full year 2022 outlook for agent count was adjusted to 1% – 2.5%, down from 2% – 4%. Revenue projections were moved to between $354 million and $364 million, down from $366 million – $376 million.
RE/MAX stock was down sharply in early trading, losing over 5% at the opening bell Friday—though by around 10:30 a.m ET, it had rebounded and was trading close to flat.
Despite this, Joyce claimed that RE/MAX’s model has positioned the company to succeed in “virtually any kind of market,” specifically touting contributions from RE/MAX Integra, acquired last summer, and Motto Mortgage, which opened its 205th office this quarter. He also highlighted strategic initiatives announced last month, investing in the mortgage side of the business, building incentives to attract top teams and switching up the company’s tech stack (while also laying off a significant number of workers mostly from tech-related jobs).
“We believe that these initiatives, coupled with our strong business model, will position us well to generate profitable growth over the long term and should help mitigate the impact of additional market volatility,” Joyce said.
Joyce had previously said he was aiming to amplify growth, particularly in the United States. The company still lost 1,603 net agents in Q2 2022, or 2.6%, while gaining a significant share in Canada—1,788, or 7.8%. RE/MAX’s agent count across the rest of the world grew 6.5%, or 3,553 agents.
Revenue from franchise fees and annual dues was up significantly in Q2, $7.3 million, or 20.4%.
“Our strong second quarter results demonstrate the strength and resilience of our 100%-franchise model,” Joyce said.
Looking ahead, RE/MAX’s outlook for Q3 remained steady, with the firm aiming to increase agent count by 1.5% – 2.5% year-over-year, and revenue in a range of $87 million – $91 million.