Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Jul. 29, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2022 | |
Entity File Number | 001-36101 | |
Entity Registrant Name | RE/MAX Holdings, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 80-0937145 | |
Entity Address Line One | 5075 South Syracuse Street | |
Entity Address City or Town | Denver | |
Entity Address State or Province | CO | |
Entity Address Postal Zip Code | 80237 | |
City Area Code | 303 | |
Local Phone Number | 770-5531 | |
Title of 12(b) Security | Class A Common Stock, $0.0001 par value per share | |
Trading Symbol | RMAX | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001581091 | |
Amendment Flag | false | |
Common Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 18,770,797 | |
Common Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 118,132 | $ 126,270 |
Restricted cash | 35,677 | 32,129 |
Accounts and notes receivable, current portion, net of allowances | 36,198 | 34,611 |
Income taxes receivable | 2,421 | 1,754 |
Other current assets | 17,217 | 16,010 |
Total current assets | 209,645 | 210,774 |
Property and equipment, net of accumulated depreciation | 10,467 | 12,686 |
Operating lease right of use assets | 30,274 | 36,523 |
Franchise agreements, net | 131,983 | 143,832 |
Other intangible assets, net | 32,387 | 32,530 |
Goodwill | 268,054 | 269,115 |
Deferred tax assets, net | 51,418 | 51,314 |
Income taxes receivable, net of current portion | 754 | 1,803 |
Other assets, net of current portion | 11,711 | 17,556 |
Total assets | 746,693 | 776,133 |
Current liabilities: | ||
Accounts payable | 6,019 | 5,189 |
Accrued liabilities | 76,887 | 96,768 |
Income taxes payable | 2,499 | 2,546 |
Deferred revenue | 26,431 | 27,178 |
Current portion of debt | 4,600 | 4,600 |
Current portion of payable pursuant to tax receivable agreements | 3,672 | 3,610 |
Operating lease liabilities | 6,672 | 6,328 |
Total current liabilities | 126,780 | 146,219 |
Debt, net of current portion | 445,586 | 447,459 |
Payable pursuant to tax receivable agreements, net of current portion | 26,856 | 26,893 |
Deferred tax liabilities, net | 14,378 | 14,699 |
Deferred revenue, net of current portion | 18,569 | 18,929 |
Operating lease liabilities, net of current portion | 41,621 | 45,948 |
Other liabilities, net of current portion | 9,362 | 6,919 |
Total liabilities | 683,152 | 707,066 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Additional paid-in capital | 526,122 | 515,443 |
Accumulated deficit | (21,958) | (7,821) |
Accumulated other comprehensive income, net of tax | 309 | 650 |
Total stockholders' equity attributable to RE/MAX Holdings, Inc. | 504,475 | 508,274 |
Non-controlling interest | (440,934) | (439,207) |
Total stockholders' equity | 63,541 | 69,067 |
Total liabilities and stockholders' equity | 746,693 | 776,133 |
Common Class A | ||
Stockholders' equity: | ||
Common stock | 2 | 2 |
Common Class B | ||
Stockholders' equity: | ||
Common stock |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 |
Common Class A | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 180,000,000 | 180,000,000 |
Common stock, shares issued | 18,753,835 | 18,806,194 |
Common stock, shares outstanding | 18,753,835 | 18,806,194 |
Common Class B | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 1,000 | 1,000 |
Common stock, shares issued | 1 | 1 |
Common stock, shares outstanding | 1 | 1 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue: | ||||
Total revenue | $ 92,172 | $ 77,246 | $ 183,176 | $ 149,541 |
Operating expenses: | ||||
Selling, operating and administrative expenses | 40,781 | 38,816 | 88,612 | 82,492 |
Marketing Funds expenses | 22,909 | 18,042 | 45,760 | 36,187 |
Depreciation and amortization | 9,113 | 6,846 | 18,098 | 13,654 |
Settlement and impairment charges | 2,460 | 6,195 | ||
Total operating expenses | 75,263 | 63,704 | 158,665 | 132,333 |
Operating income (loss) | 16,909 | 13,542 | 24,511 | 17,208 |
Other expenses, net: | ||||
Interest expense | (4,032) | (2,124) | (7,683) | (4,222) |
Interest income | 159 | 19 | 178 | 182 |
Foreign currency transaction gains (losses) | (160) | (363) | 20 | (383) |
Total other expenses, net | (4,033) | (2,468) | (7,485) | (4,423) |
Income (loss) before provision for income taxes | 12,876 | 11,074 | 17,026 | 12,785 |
Provision for income taxes | (2,601) | (714) | (3,806) | (662) |
Net income (loss) | 10,275 | 10,360 | 13,220 | 12,123 |
Less: net income (loss) attributable to non-controlling interest | 4,446 | 5,099 | 5,940 | 5,699 |
Net income (loss) attributable to RE/MAX Holdings, Inc. | $ 5,829 | $ 5,261 | $ 7,280 | $ 6,424 |
Common Class A | ||||
Net income (loss) attributable to RE/MAX Holdings, Inc. per share of Class A common stock | ||||
Basic | $ 0.31 | $ 0.28 | $ 0.38 | $ 0.35 |
Diluted | $ 0.30 | $ 0.28 | $ 0.38 | $ 0.34 |
Weighted average shares of Class A common stock outstanding | ||||
Basic | 18,997,397 | 18,719,477 | 18,965,911 | 18,608,005 |
Diluted | 19,153,349 | 18,941,343 | 19,182,477 | 18,904,036 |
Cash dividends declared per share of Class A common stock | $ 0.23 | $ 0.23 | $ 0.46 | $ 0.46 |
Continuing franchise fees | ||||
Revenue: | ||||
Total revenue | $ 34,128 | $ 26,955 | $ 67,627 | $ 52,329 |
Annual dues | ||||
Revenue: | ||||
Total revenue | 9,016 | 8,869 | 17,936 | 17,541 |
Broker fees | ||||
Revenue: | ||||
Total revenue | 19,317 | 17,453 | 34,402 | 29,406 |
Marketing Funds fees | ||||
Revenue: | ||||
Total revenue | 22,909 | 18,042 | 45,760 | 36,187 |
Franchise sales and other revenue | ||||
Revenue: | ||||
Total revenue | $ 6,802 | $ 5,927 | $ 17,451 | $ 14,078 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Condensed Consolidated Statements of Comprehensive Income | ||||
Net income (loss) | $ 10,275 | $ 10,360 | $ 13,220 | $ 12,123 |
Change in cumulative translation adjustment | (1,067) | 207 | (585) | 286 |
Other comprehensive income (loss), net of tax | (1,067) | 207 | (585) | 286 |
Comprehensive income (loss) | 9,208 | 10,567 | 12,635 | 12,409 |
Less: Comprehensive income (loss) attributable to non-controlling interest | 3,962 | 5,196 | 5,696 | 5,834 |
Comprehensive income (loss) attributable to RE/MAX Holdings, Inc., net of tax | $ 5,246 | $ 5,371 | $ 6,939 | $ 6,575 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Class A Common Stock | Common Class A | Common Class B Common Stock | Common Class B | Additional paid-in capital | Retained earnings (accumulated deficit) | Accumulated other comprehensive income (loss), net of tax | Non-controlling interest | Total |
Beginning balance, Value at Dec. 31, 2020 | $ 2 | $ 491,422 | $ 25,628 | $ 612 | $ (416,007) | $ 101,657 | |||
Beginning balance, Shares at Dec. 31, 2020 | 18,390,691 | 1 | |||||||
Net Income (loss) | 1,163 | 600 | 1,763 | ||||||
Distributions to non-controlling unitholders | (2,889) | (2,889) | |||||||
Equity-based compensation expense and dividend equivalents, Value | 12,679 | (472) | 12,207 | ||||||
Equity-based compensation expense and dividend equivalents, Shares | 459,330 | ||||||||
Dividends to Class A common stockholders | $ (4,326) | (4,326) | (4,326) | ||||||
Change in accumulated other comprehensive income (loss) | 41 | 38 | 79 | ||||||
Payroll taxes related to net settled restricted stock units, Value | (5,291) | (5,291) | |||||||
Payroll taxes related to net settled restricted stock units, Shares | (130,773) | ||||||||
Ending balance, Value at Mar. 31, 2021 | $ 2 | 498,810 | 21,993 | 653 | (418,258) | 103,200 | |||
Ending balance, Shares at Mar. 31, 2021 | 18,719,248 | 1 | |||||||
Beginning balance, Value at Dec. 31, 2020 | $ 2 | 491,422 | 25,628 | 612 | (416,007) | 101,657 | |||
Beginning balance, Shares at Dec. 31, 2020 | 18,390,691 | 1 | |||||||
Net Income (loss) | 12,123 | ||||||||
Dividends to Class A common stockholders | (8,671) | ||||||||
Change in accumulated other comprehensive income (loss) | 286 | ||||||||
Ending balance, Value at Jun. 30, 2021 | $ 2 | 503,430 | 22,909 | 763 | (417,172) | 109,932 | |||
Ending balance, Shares at Jun. 30, 2021 | 18,719,665 | 1 | |||||||
Beginning balance, Value at Mar. 31, 2021 | $ 2 | 498,810 | 21,993 | 653 | (418,258) | 103,200 | |||
Beginning balance, Shares at Mar. 31, 2021 | 18,719,248 | 1 | |||||||
Net Income (loss) | 5,261 | 5,099 | 10,360 | ||||||
Distributions to non-controlling unitholders | (4,110) | (4,110) | |||||||
Equity-based compensation expense and dividend equivalents, Value | 4,615 | 4,615 | |||||||
Equity-based compensation expense and dividend equivalents, Shares | 640 | ||||||||
Dividends to Class A common stockholders | $ (4,345) | (4,345) | (4,345) | ||||||
Change in accumulated other comprehensive income (loss) | 110 | 97 | 207 | ||||||
Payroll taxes related to net settled restricted stock units, Value | (7) | (7) | |||||||
Payroll taxes related to net settled restricted stock units, Shares | (223) | ||||||||
Other | 12 | 12 | |||||||
Ending balance, Value at Jun. 30, 2021 | $ 2 | 503,430 | 22,909 | 763 | (417,172) | 109,932 | |||
Ending balance, Shares at Jun. 30, 2021 | 18,719,665 | 1 | |||||||
Beginning balance, Value at Dec. 31, 2021 | $ 2 | 515,443 | (7,821) | 650 | (439,207) | 69,067 | |||
Beginning balance, Shares at Dec. 31, 2021 | 18,806,194 | 18,806,194 | 1 | 1 | |||||
Net Income (loss) | 1,451 | 1,494 | 2,945 | ||||||
Distributions to non-controlling unitholders | (2,894) | (2,894) | |||||||
Equity-based compensation expense and dividend equivalents, Value | 12,215 | (685) | 11,530 | ||||||
Equity-based compensation expense and dividend equivalents, Shares | 587,283 | ||||||||
Dividends to Class A common stockholders | $ (4,439) | (4,439) | (4,439) | ||||||
Repurchase and retirement of common shares, Value | (1,314) | (1,314) | |||||||
Repurchase and retirement of common shares, Shares | (45,885) | ||||||||
Change in accumulated other comprehensive income (loss) | 242 | 240 | 482 | ||||||
Payroll taxes related to net settled restricted stock units, Value | (5,586) | (5,586) | |||||||
Payroll taxes related to net settled restricted stock units, Shares | (175,048) | ||||||||
Ending balance, Value at Mar. 31, 2022 | $ 2 | 522,072 | (12,808) | 892 | (440,367) | 69,791 | |||
Ending balance, Shares at Mar. 31, 2022 | 19,172,544 | 1 | |||||||
Beginning balance, Value at Dec. 31, 2021 | $ 2 | 515,443 | (7,821) | 650 | (439,207) | 69,067 | |||
Beginning balance, Shares at Dec. 31, 2021 | 18,806,194 | 18,806,194 | 1 | 1 | |||||
Net Income (loss) | 13,220 | ||||||||
Dividends to Class A common stockholders | $ (8,859) | ||||||||
Repurchase and retirement of common shares, Value | $ (11,900) | ||||||||
Repurchase and retirement of common shares, Shares | (487,196) | ||||||||
Change in accumulated other comprehensive income (loss) | $ (585) | ||||||||
Ending balance, Value at Jun. 30, 2022 | $ 2 | 526,122 | (21,958) | 309 | (440,934) | 63,541 | |||
Ending balance, Shares at Jun. 30, 2022 | 18,753,835 | 18,753,835 | 1 | 1 | |||||
Beginning balance, Value at Mar. 31, 2022 | $ 2 | 522,072 | (12,808) | 892 | (440,367) | 69,791 | |||
Beginning balance, Shares at Mar. 31, 2022 | 19,172,544 | 1 | |||||||
Net Income (loss) | 5,829 | 4,446 | 10,275 | ||||||
Distributions to non-controlling unitholders | (4,529) | (4,529) | |||||||
Equity-based compensation expense and dividend equivalents, Value | 4,123 | (7) | 4,116 | ||||||
Equity-based compensation expense and dividend equivalents, Shares | 39,002 | ||||||||
Dividends to Class A common stockholders | $ (4,420) | (4,420) | (4,420) | ||||||
Repurchase and retirement of common shares, Value | (10,552) | (10,552) | |||||||
Repurchase and retirement of common shares, Shares | (441,311) | ||||||||
Change in accumulated other comprehensive income (loss) | (583) | (484) | (1,067) | ||||||
Payroll taxes related to net settled restricted stock units, Value | (73) | (73) | |||||||
Payroll taxes related to net settled restricted stock units, Shares | (16,400) | ||||||||
Ending balance, Value at Jun. 30, 2022 | $ 2 | $ 526,122 | $ (21,958) | $ 309 | $ (440,934) | $ 63,541 | |||
Ending balance, Shares at Jun. 30, 2022 | 18,753,835 | 18,753,835 | 1 | 1 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 13,220 | $ 12,123 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 18,098 | 13,654 |
Impairment charge - leased assets | 3,735 | |
Non-cash loss on lease termination | 1,175 | |
Bad debt expense | 396 | 261 |
Equity-based compensation expense | 10,172 | 18,307 |
Deferred income tax expense (benefit) | 1,020 | 335 |
Fair value adjustments to contingent consideration | 1,995 | 10 |
Non-cash lease expense (benefit) | (867) | (635) |
Other, net | 691 | 177 |
Changes in operating assets and liabilities | (10,716) | (13,893) |
Net cash provided by operating activities | 38,919 | 30,339 |
Cash flows from investing activities: | ||
Purchases of property, equipment and capitalization of software | (6,144) | (7,551) |
Net cash used in investing activities | (6,144) | (7,551) |
Cash flows from financing activities: | ||
Payments on debt | (2,300) | (1,253) |
Distributions paid to non-controlling unitholders | (7,423) | (6,999) |
Dividends and dividend equivalents paid to Class A common stockholders | (9,551) | (9,143) |
Payments related to tax withholding for share-based compensation | (5,659) | (5,298) |
Common shares repurchased | (11,866) | |
Payment of contingent consideration | (120) | |
Net cash used in financing activities | (36,919) | (22,693) |
Effect of exchange rate changes on cash | (446) | 355 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (4,590) | 450 |
Cash, cash equivalents and restricted cash, beginning of period | 158,399 | 121,227 |
Cash, cash equivalents and restricted cash, end of period | 153,809 | 121,677 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 7,236 | 3,955 |
Net cash paid for income taxes | 3,109 | $ 9,792 |
Cash paid for lease termination | $ 1,285 |
Business and Organization
Business and Organization | 6 Months Ended |
Jun. 30, 2022 | |
Business and Organization | |
Business and Organization | 1. Business and Organization RE/MAX Holdings, Inc. (“Holdings”) and its consolidated subsidiaries, including RMCO, LLC (“RMCO”), are referred to hereinafter as the “Company.” The Company is one of the world’s leading franchisors in the real estate industry, franchising real estate brokerages globally under the RE/MAX brand (“RE/MAX”) and mortgage brokerages within the United States (“U.S.”) under the Motto Mortgage brand (“Motto”). RE/MAX and Motto are 100% franchised—the Company does not own any of the brokerages that operate under these brands. On July 21, 2021, the Company acquired the operating companies of the North America regions of RE/MAX INTEGRA (“INTEGRA”) converting INTEGRA’s formerly Independent Regions into Company-Owned Regions. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2022 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying Condensed Consolidated Balance Sheet at December 31, 2021, which was derived from the audited consolidated financial statements at that date, and the unaudited interim condensed consolidated financial statements and notes thereto have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying condensed consolidated financial statements are presented on a consolidated basis and include the accounts of Holdings and its consolidated subsidiaries. All significant intercompany accounts and transactions have been eliminated. In the opinion of management, the accompanying condensed consolidated financial statements reflect all normal and recurring adjustments necessary to present fairly the Company’s financial position as of June 30, 2022 and the results of its operations and comprehensive income, cash flows and changes in its stockholders’ equity for the three and six months ended June 30, 2022 and 2021. Interim results may not be indicative of full-year performance. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements within the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 Annual Report on Form 10-K”). Please refer to that document for a fuller discussion of all significant accounting policies. Use of Estimates The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Segment Reporting The Company operates under the following four operating segments: Real Estate, Mortgage, Marketing Funds and Other. Due to quantitative insignificance, the “Other” operating segment is comprised of operations which do not meet the criteria of a reportable segment. Revenue Recognition The Company generates most of its revenue from contracts with customers. The Company’s major streams of revenue are: ● Continuing franchise fees, which are fixed contractual fees paid monthly by RE/MAX or Motto franchisees or Independent Region sub-franchisors based on the number of RE/MAX agents or Motto franchisees based on the number of open offices. ● Annual dues, which are fees charged directly to RE/MAX agents. ● Broker fees, which are fees on real estate commissions when a RE/MAX agent assists a consumer with buying or selling a home. ● Marketing Funds fees, which are fixed contractual fees paid monthly by franchisees based on the number of RE/MAX agents or Motto franchisees based on the number of offices. ● Franchise sales and other revenue, which consists of fees from initial sales of RE/MAX and Motto franchises, renewals of RE/MAX franchises and master franchise fees, as well as data services subscription revenue, preferred marketing arrangements, technology products and subscription revenue, event-based revenue from education and other programs and mortgage loan processing revenue. Deferred Revenue and Commissions Related to Franchise Sales Deferred revenue is primarily driven by Franchise sales and Annual dues, as discussed above, and is included in “Deferred revenue” and “Deferred revenue, net of current portion” on the Consolidated Balance Sheets. Other deferred revenue is primarily related to event-based revenue. The activity consists of the following (in thousands): Balance at Revenue Balance at January 1, 2022 New billings recognized (a) June 30, 2022 Franchise sales $ 26,043 $ 3,884 $ (4,321) $ 25,606 Annual dues 15,020 18,557 (17,936) 15,641 Other 5,044 12,149 (13,440) 3,753 $ 46,107 $ 34,590 $ (35,697) $ 45,000 (a) Revenue recognized related to the beginning balance for Franchise sales and Annual dues were $4.1 million and $11.3 million, respectively, for the six months ended June 30, 2022. Commissions paid on franchise sales are recognized as an asset and amortized over the contract life of the franchise agreement. The activity in the Company’s capitalized contract costs for commissions (which are included in “other current assets” and “other assets, net of current portion” on the Condensed Consolidated Balance Sheets) consist of the following (in thousands): Additions to Balance at contract cost Expense Balance at January 1, 2022 for new activity recognized June 30, 2022 Capitalized contract costs for commissions $ 4,010 $ 913 $ (1,026) $ 3,897 Transaction Price Allocated to the Remaining Performance Obligations The following table includes estimated revenue by year, excluding certain other immaterial items, expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period (in thousands): Remainder of 2022 2023 2024 2025 2026 2027 Thereafter Total Annual dues $ 12,199 $ 3,442 $ — $ — $ — $ — $ — $ 15,641 Franchise sales 3,683 6,385 5,205 3,952 2,556 1,277 2,548 25,606 Total $ 15,882 $ 9,827 $ 5,205 $ 3,952 $ 2,556 $ 1,277 $ 2,548 $ 41,247 Disaggregated Revenue In the following table, segment revenue is disaggregated by Company-Owned or Independent Regions, where applicable, by segment and by geographical area (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 U.S. Company-Owned Regions (a) $ 42,733 $ 37,613 $ 81,887 $ 70,159 U.S. Independent Regions (a) 1,877 3,730 3,578 7,018 Canada Company-Owned Regions (a) 11,434 4,800 21,909 8,354 Canada Independent Regions (a) 715 2,364 1,418 4,569 Global 3,193 2,854 6,285 5,495 Fee revenue (b) 59,952 51,361 115,077 95,595 Franchise sales and other revenue (c) 5,824 4,930 15,436 11,850 Total Real Estate 65,776 56,291 130,513 107,445 U.S. (a) 17,641 16,359 35,200 32,541 Canada (a) 4,988 1,424 10,001 3,161 Global 280 259 559 485 Total Marketing Funds 22,909 18,042 45,760 36,187 Mortgage (d) 3,115 2,410 6,143 4,733 Other (d) 372 503 760 1,176 Total $ 92,172 $ 77,246 $ 183,176 $ 149,541 (a) In July 2021, the Company acquired the operating companies of the North America regions of INTEGRA. Fee revenue from these regions were previously recognized in the U.S. and Canada Independent Regions. See Note 5, Acquisitions , for information related to this transaction. (b) Fee revenue includes Continuing franchise fees, Annual dues and Broker fees. (c) Franchise sales and other revenue is derived primarily within the U.S. (d) Revenue from Mortgage and Other are derived exclusively within the U.S. Cash, Cash Equivalents and Restricted Cash All cash held by the Marketing Funds is contractually restricted. The following table reconciles the amounts presented for cash, both unrestricted and restricted, in the Condensed Consolidated Balance Sheets to the amounts presented in the Condensed Consolidated Statements of Cash Flows (in thousands): June 30, December 31, 2022 2021 Cash and cash equivalents $ 118,132 $ 126,270 Restricted cash 35,677 32,129 Total cash, cash equivalents and restricted cash $ 153,809 $ 158,399 Services Provided to the Marketing Funds by Real Estate Real Estate charges the Marketing Funds for various services it performs. These services primarily comprise (a) building and maintaining agent marketing technology, including customer relationship management tools, the www.remax.com website, agent, office and team websites, and mobile apps, (b) dedicated employees focused on marketing campaigns, and (c) various administrative services including customer support of technology, accounting and legal. Because these costs are ultimately paid by the Marketing Funds, they do not impact the net income (loss) of Holdings as the Marketing Funds have no reported net income (loss). Costs charged from Real Estate to the Marketing Funds are as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Technology − operating $ 3,519 $ 3,233 $ 7,743 $ 6,833 Technology − capital 530 224 1,161 404 Marketing staff and administrative services 1,140 1,189 2,681 2,307 Total $ 5,189 $ 4,646 $ 11,585 $ 9,544 Accounts and Notes Receivable As of June 30, 2022, and December 31, 2021, the Company had allowances against accounts and notes receivable of $9.1 million and $9.6 million, respectively. Property and Equipment As of June 30, 2022, and December 31, 2021, the Company had accumulated depreciation of $10.6 million and $9.4 million, respectively. Leases The Company leases corporate offices, a distribution center, billboards and certain equipment. As all franchisees are independently owned and operated; there are no leases recognized for any offices used by the Company’s franchisees. All the Company’s material leases are classified as operating leases. The Company acts as the lessor for sublease agreements on its corporate headquarters, consisting solely of operating leases. During the first quarter of 2022, the Company subleased a portion of its corporate headquarters. As a result, the Company performed an impairment test on the portion subleased. Based on a comparison of undiscounted cash flows to the right of use (“ROU”) asset, the Company determined that the asset was impaired, driven largely by the difference between the existing lease rate on the Company’s corporate headquarters and the sublease rates received. This resulted in an impairment charge of $3.7 million, which reflects the excess of the ROU asset carrying value over its fair value. During the second quarter of 2022, the Company terminated its booj office lease, which is owned by an entity controlled by former employees of the Company. As a result, the Company wrote off an ROU asset of $2.7 million and derecognized $1.5 million of lease liability associated with the terminated lease. The Company also recognized a loss on termination of $2.5 million, which included a lease termination payment of $1.3 million. Foreign Currency Derivatives The Company is exposed to foreign currency transaction gains and losses related to certain foreign currency denominated asset and liability positions, with the Canadian dollar representing the most significant exposure primarily from an intercompany Canadian loan between RMCO and the new Canadian entity for INTEGRA. The Company uses short duration foreign currency forward contracts, generally with maturities ranging from a few days to a few months, to minimize its exposures related to foreign currency exchange rate fluctuations. None of these contracts are designated as accounting hedges as the underlying currency positions are revalued through “Foreign currency transaction gains (losses)” along with the related derivative contracts. As of June 30, 2022, the Company had an aggregate U.S. dollar equivalent of $57.5 million notional amount of Canadian dollar forward contracts to hedge these exposures. Recently Adopted Accounting Pronouncements None. New Accounting Pronouncements Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) Debt In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers |
Non-controlling Interest
Non-controlling Interest | 6 Months Ended |
Jun. 30, 2022 | |
Noncontrolling Interest | |
Non-controlling Interest | 3. Non-controlling Interest Holdings is the sole managing member of RMCO and operates and controls all the business affairs of RMCO. The ownership of the common units in RMCO is summarized as follows: June 30, 2022 December 31, 2021 Shares Ownership % Shares Ownership % Non-controlling interest ownership of common units in RMCO 12,559,600 40.1 % 12,559,600 40.0 % Holdings outstanding Class A common stock (equal to Holdings common units in RMCO) 18,753,835 59.9 % 18,806,194 60.0 % Total common units in RMCO 31,313,435 100.0 % 31,365,794 100.0 % The weighted average ownership percentages for the applicable reporting periods are used to calculate the “Net income (loss) attributable to RE/MAX Holdings, Inc.” A reconciliation of “Income (loss) before provision for income taxes” to “Net income (loss) attributable to RE/MAX Holdings, Inc.” and “Net Income (loss) attributable to non-controlling interest” in the accompanying Condensed Consolidated Statements of Income for the periods indicated is detailed as follows (in thousands, except percentages): Three Months Ended June 30, 2022 2021 RE/MAX Holdings, Inc. Non-controlling interest Total RE/MAX Holdings, Inc. Non-controlling interest Total Weighted average ownership percentage of RMCO (a) 60.2 % 39.8 % 100.0 % 59.8 % 40.2 % 100.0 % Income (loss) before provision for income taxes (a) $ 7,750 $ 5,126 $ 12,876 $ 6,609 $ 4,465 $ 11,074 (Provision) / benefit for income taxes (b)(c) (1,921) (680) (2,601) (1,348) 634 (714) Net income (loss) $ 5,829 $ 4,446 $ 10,275 $ 5,261 $ 5,099 $ 10,360 Six Months Ended June 30, 2022 2021 RE/MAX Holdings, Inc. Non-controlling interest Total RE/MAX Holdings, Inc. Non-controlling interest Total Weighted average ownership percentage of RMCO (a) 60.2 % 39.8 % 100.0 % 59.7 % 40.3 % 100.0 % Income (loss) before provision for income taxes (a) $ 10,235 $ 6,791 $ 17,026 $ 7,628 $ 5,157 $ 12,785 (Provision) / benefit for income taxes (b)(c)(d) (2,955) (851) (3,806) (1,204) 542 (662) Net income (loss) $ 7,280 $ 5,940 $ 13,220 $ 6,424 $ 5,699 $ 12,123 (a) The weighted average ownership percentage of RMCO differs from the allocation of income (loss) before provision for income taxes between Holdings and the non-controlling interest due to certain relatively insignificant items recorded at Holdings. (b) The provision for income taxes attributable to Holdings is primarily comprised of U.S. federal and state income taxes on its proportionate share of the flow-through income from RMCO. It also includes Holdings’ share of taxes directly incurred by RMCO and its subsidiaries, including taxes in certain foreign jurisdictions. (c) Beginning in July 2021 as a result of the acquisition of INTEGRA, RMCO now also owns two corporate subsidiaries, which unlike RMCO are not pass-through entities. These entities are taxed at the corporate level on 100% of their income. (d) The provision for income taxes attributable to the non-controlling interest represents its share of taxes incurred by RMCO and its subsidiaries (both foreign taxes and taxes from non-flow through subsidiaries). Otherwise, because RMCO is a flow-through entity, there is no U.S. federal and state income tax provision recorded on the non-controlling interest. Distributions and Other Payments to Non-controlling Unitholders Under the terms of RMCO’s limited liability company operating agreement, RMCO makes cash distributions to non-controlling unitholders on a pro-rata basis. The distributions paid or payable to non-controlling unitholders are summarized as follows (in thousands): Six Months Ended June 30, 2022 2021 Tax and other distributions $ 1,645 $ 1,221 Dividend distributions 5,778 5,778 Total distributions to non-controlling unitholders $ 7,423 $ 6,999 |
Earnings Per Share, Dividends a
Earnings Per Share, Dividends and Repurchases | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share, Dividends and Repurchases | |
Earnings Per Share, Dividends and Repurchases | 4. Earnings Per Share, Dividends and Repurchases Earnings Per Share The following is a reconciliation of the numerator and denominator used in the basic and diluted earnings per share (“EPS”) calculations (in thousands, except shares and per share information): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Numerator Net income (loss) attributable to RE/MAX Holdings, Inc. $ 5,829 $ 5,261 $ 7,280 $ 6,424 Denominator for basic net income (loss) per share of Class A common stock Weighted average shares of Class A common stock outstanding 18,997,397 18,719,477 18,965,911 18,608,005 Denominator for diluted net income (loss) per share of Class A common stock Weighted average shares of Class A common stock outstanding 18,997,397 18,719,477 18,965,911 18,608,005 Add dilutive effect of the following: Restricted stock 155,952 221,866 216,566 296,031 Weighted average shares of Class A common stock outstanding, diluted 19,153,349 18,941,343 19,182,477 18,904,036 Earnings (loss) per share of Class A common stock Net income (loss) attributable to RE/MAX Holdings, Inc. per share of Class A common stock, basic $ 0.31 $ 0.28 $ 0.38 $ 0.35 Net income (loss) attributable to RE/MAX Holdings, Inc. per share of Class A common stock, diluted $ 0.30 $ 0.28 $ 0.38 $ 0.34 Outstanding Class B common stock does not share in the earnings of Holdings and is therefore not a participating security. Accordingly, basic and diluted net income (loss) per share of Class B common stock has not been presented. Dividends Dividends declared and paid during each quarter ended per share on all outstanding shares of Class A common stock were as follows (in thousands, except per share information): Six Months Ended June 30, 2022 2021 Quarter end declared Date paid Per share Amount paid to Class A stockholders Amount paid to Non-controlling unitholders Date paid Per share Amount paid to Class A stockholders Amount paid to Non-controlling unitholders March 31 March 16, 2022 $ 0.23 $ 4,439 $ 2,889 March 17, 2021 $ 0.23 $ 4,326 $ 2,889 June 30 May 25, 2022 0.23 4,420 2,889 June 2, 2021 0.23 4,345 2,889 $ 0.46 $ 8,859 $ 5,778 $ 0.46 $ 8,671 $ 5,778 On August 2, 2022, the Company’s Board of Directors declared a quarterly dividend of $0.23 per share on all outstanding shares of Class A common stock, which was payable on August 30, 2022 to stockholders of record at the close of business on August 16, 2022. Share Repurchases and Retirement In January 2022, the Company’s Board of Directors authorized a common stock repurchase program of up to $100 million. During the six months ended June 30, 2022, 487,196 shares of the Company’s Class A common stock were repurchased and retired for $11.9 million excluding commissions, at an average cost of $24.36. As of June 30, 2022, $88.1 million remained available under the share repurchase program. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2022 | |
Acquisitions | |
Acquisitions | 5. Acquisitions RE/MAX INTEGRA North America Regions Acquisition On July 21, 2021, the Company acquired the operating companies of the North America regions of INTEGRA whose territories cover five Canadian provinces (New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Prince Edward Island) and nine U.S. states (Connecticut, Indiana, Maine, Massachusetts, Minnesota, New Hampshire, Rhode Island, Vermont, and Wisconsin) for cash consideration of approximately $235.0 million. The Company acquired these companies in order to convert these formerly Independent Regions into Company-Owned Regions, advance its ability to scale, deliver value to its affiliates and recapture the value differential of more than 19,000 agents (approximately 12,000 in Canada and 7,000 in the U.S.). The Company funded the acquisition by refinancing its Senior Secured Credit Facility (See Note 8, Debt The Company allocated $40.9 million of the purchase price to a loss on the pre-existing master franchise agreements with INTEGRA which were effectively settled with the acquisition. The loss represents the fair value of the difference between the historical contractual royalty rates paid by INTEGRA and the current market rate. The loss is recorded in “Settlement and impairment charges” in the Consolidated Statements of Income (Loss) in the 2021 Annual Report on Form 10-K. The following table summarizes the allocation of the purchase price (net of settlement loss) to the fair value of assets acquired and liabilities assumed for the acquisition (in thousands): Cash and cash equivalents and restricted cash $ 14,098 Accounts and notes receivable, net 6,610 Income taxes receivable 494 Other current assets 502 Property and equipment 63 Franchise agreements (a) 92,250 Other intangible assets, net (a) 9,200 Other assets, net of current portion 2,174 Goodwill (b) 108,606 Accounts payable (3,461) Accrued liabilities (14,045) Income taxes payable (3,107) Deferred revenue (824) Deferred tax liabilities, net (16,260) Other liabilities, net of current portion (2,200) Total purchase price allocated to assets and liabilities 194,100 Loss on contract settlement 40,900 Total consideration $ 235,000 (a) The Company expects to amortize the acquired Franchise agreements over a weighted average useful life of approximately 13 years and the non-compete agreements included in Other intangible assets, net over a useful life of 5 years using the straight-line method. (b) The Company expects 50% of the goodwill in Canada but none in the U.S. to be deductible for tax purposes. The Company finalized its accounting for the acquisition of INTEGRA during the three months ended June 30, 2022. Unaudited Pro Forma Financial Information The following unaudited pro forma financial information reflects the consolidated results of operations of the Company as if the acquisitions of INTEGRA had occurred on January 1, 2020. The pro forma information presented below is for illustrative purposes only and should not be relied upon as necessarily being indicative of the historical results that would have been obtained if the acquisitions had actually occurred on that date, nor of the results that may be obtained in the future (in thousands). Three Months Ended Six Months Ended June 30 June 30 2022 2021 2022 2021 Total revenue $ 92,172 $ 89,296 $ 183,176 $ 173,517 Net income (loss) attributable to RE/MAX Holdings, Inc. $ 5,829 $ 4,262 $ 7,280 $ 5,734 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Jun. 30, 2022 | |
Intangible Assets and Goodwill | |
Intangible Assets and Goodwill | 6. Intangible Assets and Goodwill The following table provides the components of the Company’s intangible assets (in thousands, except weighted average amortization period in years): Weighted Average As of June 30, 2022 As of December 31, 2021 Amortization Initial Accumulated Net Initial Accumulated Net Period Cost Amortization Balance Cost Amortization Balance Franchise agreements 12.7 $ 267,088 $ (135,105) $ 131,983 $ 267,770 $ (123,938) $ 143,832 Other intangible assets: Software (a) 4.0 $ 48,176 $ (27,335) $ 20,841 $ 51,368 $ (29,682) $ 21,686 Trademarks 8.3 2,361 (1,708) 653 2,356 (1,533) 823 Non-compete agreements 4.3 13,149 (3,332) 9,817 13,100 (4,563) 8,537 Training materials 5.0 2,400 (1,840) 560 2,400 (1,600) 800 Other 6.6 870 (354) 516 1,670 (986) 684 Total other intangible assets 4.3 $ 66,956 $ (34,569) $ 32,387 $ 70,894 $ (38,364) $ 32,530 (a) As of June 30, 2022 and December 31, 2021, capitalized software development costs of $4.7 million and $1.9 million, respectively, were related to technology projects not yet complete and ready for their intended use and thus were not subject to amortization. Amortization expense was $8.5 million and $6.4 million for the three months ended June 30, 2022 and 2021, respectively and was $16.8 million and $12.7 million for the six months ended June 30, 2022 and 2021, respectively. As of June 30, 2022, the estimated future amortization expense related to intangible assets includes the estimated amortization expense associated with the Company’s intangible assets assumed with the Company’s acquisitions (in thousands): Remainder of 2022 $ 15,631 2023 30,878 2024 25,591 2025 20,640 2026 14,606 Thereafter 57,024 $ 164,370 The following table presents changes to goodwill by reportable segment (in thousands): Real Estate Mortgage Total Balance, January 1, 2022 $ 250,482 $ 18,633 $ 269,115 Purchase price adjustments (332) — (332) Effect of changes in foreign currency exchange rates (729) — (729) Balance, June 30, 2022 $ 249,421 $ 18,633 $ 268,054 |
Accrued Liabilities
Accrued Liabilities | 6 Months Ended |
Jun. 30, 2022 | |
Accrued Liabilities. | |
Accrued Liabilities | 7. Accrued Liabilities Accrued liabilities consist of the following (in thousands): June 30, 2022 December 31, 2021 Marketing Funds (a) $ 57,267 $ 61,997 Accrued payroll and related employee costs 10,196 22,634 Accrued taxes 1,053 2,053 Accrued professional fees 3,254 3,660 Other 5,117 6,424 $ 76,887 $ 96,768 (a) Consists primarily of liabilities recognized to reflect the contractual restriction that all funds collected in the Marketing Funds must be spent for designated purposes. See Note 2, Summary of Significant Accounting Policies for additional information. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2022 | |
Debt | |
Debt | 8. Debt Debt, net of current portion, consists of the following (in thousands): June 30, 2022 December 31, 2021 Senior Secured Credit Facility $ 455,400 $ 457,700 Less unamortized debt issuance costs (3,852) (4,168) Less unamortized debt discount costs (1,362) (1,473) Less current portion (4,600) (4,600) $ 445,586 $ 447,459 As of June 30, 2022, maturities of debt are as follows (in thousands): Remainder of 2022 $ 2,300 2023 4,600 2024 4,600 2025 4,600 2026 4,600 Thereafter 434,700 $ 455,400 Senior Secured Credit Facility On July 21, 2021, the Company amended and restated its Senior Secured Credit Facility to fund the acquisition of INTEGRA and refinance its existing facility. The revised facility provides for a seven-year $460.0 million term loan facility which matures on July 21, 2028, and a $50.0 million revolving loan facility which must be repaid on July 21, 2026. The Senior Secured Credit Facility requires RE/MAX, LLC to repay term loans at $1.2 million per quarter. Borrowings under the term loans and revolving loans accrue interest, at the Company’s option on (a) LIBOR, provided LIBOR shall be no less than 0.50% plus an applicable margin of 2.50% and, provided further that such rate shall be adjusted for reserve requirements for eurocurrency liabilities, if any (the “LIBOR Rate”) or (b) the greatest of (i) the prime rate as quoted by the Wall Street Journal, (ii) the NYFRB Rate (as defined in the Senior Secured Credit Facility) plus 0.50% and (iii) the one-month Eurodollar Rate plus 1.00%, (such greatest rate, the “ABR”) plus, in each case, an applicable margin of 1.50%. As of June 30, 2022, the interest rate on the term loan facility was 4.2%. A commitment fee of 0.5% per annum (subject to reductions) accrues on the amount of unutilized revolving line of credit. As of the date of this report, no amounts were drawn on the revolving line of credit. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Measurements | |
Fair Value Measurements | 9. Fair Value Measurements Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering assumptions, the Company follows a three-tier fair value hierarchy, which is described in detail in the 2021 Annual Report on Form 10-K. A summary of the Company’s liabilities measured at fair value on a recurring basis is as follows (in thousands): As of June 30, 2022 As of December 31, 2021 Fair Value Level 1 Level 2 Level 3 Fair Value Level 1 Level 2 Level 3 Liabilities Motto contingent consideration $ 6,500 $ — $ — $ 6,500 $ 4,530 $ — $ — $ 4,530 Gadberry contingent consideration 1,155 — — 1,155 1,250 — — 1,250 Contingent consideration (a) $ 7,655 $ — $ — $ 7,655 $ 5,780 $ — $ — $ 5,780 (a) Recorded as a component of “Accrued liabilities” and “Other liabilities, net of current portion” in the accompanying Condensed Consolidated Balance Sheets. The Company is required to pay additional purchase consideration totaling 8% of gross receipts collected by Motto each year (the “Revenue Share Year”) through September 30, 2026, with no limitation as to the maximum payout. The annual payment is required to be made within 120 days of the end of each Revenue Share Year. The fair value of the contingent purchase consideration represents the forecasted discounted cash payments that the Company expects to pay. Increases or decreases in the fair value of the contingent purchase consideration can result from changes in discount rates as well as the timing and amount of forecasted revenues. The forecasted revenue growth assumption that is most sensitive is the assumed franchise sales count for which the forecast assumes between 80-160 franchises sold annually. This assumption is based on historical sales and an assumption of growth over time. A 10% change in the number of franchise sales would increase or decrease the liability by $0.3 million. A 1% change to the discount rate applied to the forecast changes the liability by approximately $0.2 million. The Company measures these liabilities each reporting period and recognizes changes in fair value, if any, in “Selling, operating and administrative expenses” in the accompanying Condensed Consolidated Statements of Income. The table below presents a reconciliation of the contingent consideration (in thousands): Total Balance at January 1, 2022 $ 5,780 Fair value adjustments 1,995 Cash payments (120) Balance at June 30, 2022 $ 7,655 The following table summarizes the carrying value and estimated fair value of the Senior Secured Credit Facility (in thousands): June 30, 2022 December 31, 2021 Carrying Amount Fair Value Level 2 Carrying Amount Fair Value Level 2 Senior Secured Credit Facility $ 450,186 $ 407,583 $ 452,059 $ 454,267 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Taxes | |
Income Taxes | 10. Income Taxes The “Provision for income taxes” in the accompanying Condensed Consolidated Statements of Income is based on an estimate of the Company’s annualized effective income tax rate. Uncertain Tax Positions Uncertain tax position liabilities represent the aggregate tax effect of differences between the tax return positions and the amounts otherwise recognized in the consolidated financial statements and are recognized in “Income taxes payable” in the Condensed Consolidated Balance Sheets. Interest and penalties are accrued on the uncertain tax positions and included in the “Provision for income taxes” in the accompanying Condensed Consolidated Statements of Income. While the Company believes the liabilities recognized for uncertain tax positions are adequate to cover reasonably expected tax risks, there can be no assurance that an issue raised by a tax authority will be resolved at a cost that does not exceed the liability recognized. During 2021, in connection with the INTEGRA acquisition, the Company assumed an uncertain tax position related to certain U.S. tax matters and recorded a largely offsetting related indemnification asset. See Note 5, Acquisitions During 2021, the Company settled uncertain tax positions related to certain foreign tax matters that were accrued in prior years. The Company also recognized additional uncertain tax positions related to the INTEGRA acquisition. A reconciliation of the beginning and ending uncertain tax position amounts, excluding interest and penalties is as follows: As of June 30, 2022 2021 Balance, January 1 $ 1,587 $ 5,300 Increases related to prior period tax positions — 96 Decrease related to prior year tax positions — (815) Increase related to tax positions from acquired companies 309 — Settlements — (3,776) Foreign currency transaction (gains) losses — 380 Balance, June 30 $ 1,896 $ 1,185 A portion of the Company’s uncertain tax positions have a reasonable possibility of being settled within the next 12 months. |
Equity-Based Compensation
Equity-Based Compensation | 6 Months Ended |
Jun. 30, 2022 | |
Equity-Based Compensation | |
Equity-Based Compensation | 11. Equity-Based Compensation Equity-based compensation expense under the RE/MAX Holdings, Inc. 2013 Omnibus Incentive Plan (the “Incentive Plan”), net of the amount capitalized in internally developed software, is as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Expense from time-based awards (a) $ 3,844 $ 3,744 $ 7,692 $ 13,565 Expense from performance-based awards (b) 188 871 278 1,667 Expense from bonus to be settled in shares (c) 503 1,638 2,202 3,075 Equity-based compensation expense $ 4,535 $ 6,253 $ 10,172 $ 18,307 (a) During the first quarter of 2021, the Company recognized $5.5 million of expense upon acceleration of certain grants that were issued to two employees of an acquired company who departed during the first quarter of 2021. (b) Expense recognized for performance-based awards is re-assessed each quarter based on expectations of achievement against the performance conditions. During the first quarter of 2022, the Company had a significant amount of forfeitures related to performance-based awards issued to the Company’s former CEO which, subsequent to his departure, will no longer vest. (c) A portion of the annual corporate bonus earned is to be settled in shares. These amounts are recognized as “Accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets and are not included in “Additional paid-in capital” until the shares are issued. Time-based Restricted Stock The following table summarizes equity-based compensation activity related to time-based restricted stock units and restricted stock awards: Shares Weighted average grant date fair value per share Balance, January 1, 2022 765,813 $ 36.84 Granted 386,926 $ 29.25 Shares vested (including tax withholding) (a) (302,309) $ 38.04 Forfeited (70,181) $ 34.02 Balance, June 30, 2022 780,249 $ 32.86 (a) Pursuant to the terms of the Incentive Plan, shares withheld by the Company for the payment of the employee's tax withholding related to shares vesting are added back to the pool of shares available for future awards. As of June 30, 2022, there was $15.5 million of total unrecognized expense. This compensation expense is expected to be recognized over the weighted-average remaining vesting period of 1.7 years. Performance-based Restricted Stock The following table summarizes equity-based compensation activity related to performance-based restricted stock units: Shares Weighted average grant date fair value per share Balance, January 1, 2022 241,821 $ 31.02 Granted (a) 160,863 $ 29.86 Shares vested (including tax withholding) (b) (30,893) $ 29.86 Forfeited (89,529) $ 31.05 Balance, June 30, 2022 282,262 $ 30.48 (a) Represents the total participant target award. (b) Pursuant to the terms of the Incentive Plan, shares withheld by the Company for the payment of the employee's tax withholding related to shares vesting are added back to the pool of shares available for future awards. As of June 30, 2022, there was $5.0 million of total unrecognized expense. This compensation expense is expected to be recognized over the weighted-average remaining vesting period of 1.7 years. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 12. Commitments and Contingencies A number of putative class action complaints are pending against the National Association of Realtors (“NAR”), Realogy Holdings Corp., HomeServices of America, Inc., RE/MAX, LLC and Keller Williams Realty, Inc. The first was filed on March 6, 2019, by plaintiff Christopher Moehrl in the United States District Court for the Northern District of Illinois (the “Moehrl Action”). Similar actions have been filed in various federal courts. The complaints make substantially similar allegations and seek substantially similar relief. For convenience, all of these lawsuits are collectively referred to as the “Moehrl-related suits.” In the Moehrl Action, the plaintiffs allege that a NAR rule requires brokers to make a blanket, non-negotiable offer of buyer broker compensation when listing a property, resulting in inflated costs to sellers in violation of federal antitrust law. They further allege that certain defendants use their agreements with franchisees to require adherence to the NAR rule in violation of federal antitrust law. Amended complaints added allegations regarding buyer steering and non-disclosure of buyer-broker compensation to the buyer. While similar to the Moehrl Action, the Moehrl-related suits also allege: state antitrust violations; unjust enrichment; state consumer protection statute violations; harm to home buyers rather than sellers; violations of the Missouri Merchandising Practices Act; and claims against a multiple listing service (MLS) defendant rather than NAR. In one of the Moehrl-related suits, filed by plaintiffs Scott and Rhonda Burnett and others in the Western District of Missouri, the court on April 22, 2022 granted plaintiffs’ motion for class certification and set a trial date for February 2023. Among other requested relief, plaintiffs seek damages against the defendants and injunctive relief. The Company intends to vigorously defend against all claims. The Company may become involved in additional litigation or other legal proceedings concerning the same or similar claims. We are unable to predict whether resolution of these matters would have a material effect on our financial position or results of operations. On April 9, 2021, a putative class action claim was filed in the Federal Court of Canada against the Toronto Regional Real Estate Board (“TRREB”), The Canadian Real Estate Association (“CREA”), RE/MAX Ontario-Atlantic Canada Inc. (“RE/MAX OA”), which was acquired by the Company in July 2021 (see Note 6, Acquisitions, for additional information), Century 21 Canada Limited Partnership, Royal Lepage Real Estate Services Ltd., and many other real estate companies by the putative representative plaintiff, Mark Sunderland (the “Plaintiff”). The Plaintiff alleges that the Defendants and their co-conspirators conspired, agreed or arranged with each other to fix, maintain, increase, control, raise, or stabilize the rate of real estate buyers’ brokerages’ and salespersons’ commissions in respect of the purchase and sale of properties listed on TRREB’s multiple listing service system (the “Toronto MLS”); that the Defendants and their co-conspirators acted in furtherance of their conspiracy, agreement or arrangement to fix, maintain, increase, control, raise, or stabilize the rate of real estate buyers’ brokerages’ and salespersons’ commissions in respect of the purchase and sale of properties listed on the Toronto MLS; and violation of Part VI of the Competition Act, R.S.C. 1985, c. C-34 (“Competition Act”). On February 24, 2022, plaintiff filed a Fresh as Amended Statement of Claim. With respect RE/MAX OA, the amended claim alleges Franchisor Defendants aided and abetted their respective franchisee brokerages and their salespeople in violation of the section 45(1) of the Competition Act. Among other requested relief, Plaintiff seeks damages against the defendants and injunctive relief. RE/MAX OA denies the allegations in the claim and intends to vigorously defend the action. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2022 | |
Segment Information | |
Segment Information | 13. Segment Information The Company operates under the following four operating segments: Real Estate, Mortgage, Marketing Funds and Other. Mortgage does not meet the quantitative significance test; however, management has chosen to report results for the segment as it believes it will be a key driver of future success for Holdings. Management evaluates the operating results of its segments based upon revenue and adjusted earnings before interest, the provision for income taxes, depreciation and amortization and other non-cash and non-recurring cash charges or other items (“Adjusted EBITDA”). The Company’s presentation of Adjusted EBITDA may not be comparable to similar measures used by other companies. Except for the adjustments identified below in arriving at Adjusted EBITDA, the accounting policies of the reportable segments are the same as those described in the Company’s 2021 Annual Report on Form 10-K. The following table presents revenue from external customers by segment (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Continuing franchise fees $ 31,619 $ 25,039 $ 62,739 $ 48,648 Annual dues 9,016 8,869 17,936 17,541 Broker fees 19,317 17,453 34,402 29,406 Franchise sales and other revenue 5,824 4,930 15,436 11,850 Total Real Estate 65,776 56,291 130,513 107,445 Continuing franchise fees 2,509 1,916 4,888 3,681 Franchise sales and other revenue 606 494 1,255 1,052 Total Mortgage 3,115 2,410 6,143 4,733 Marketing Funds fees 22,909 18,042 45,760 36,187 Other 372 503 760 1,176 Total revenue $ 92,172 $ 77,246 $ 183,176 $ 149,541 The following table presents a reconciliation of Adjusted EBITDA by segment to income before provision for income taxes (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Adjusted EBITDA: Real Estate $ 36,331 $ 31,503 $ 67,010 $ 55,782 Adjusted EBITDA: Mortgage (1,164) (733) (3,337) (1,883) Adjusted EBITDA: Other (36) (72) (62) (182) Adjusted EBITDA: Consolidated 35,131 30,698 63,611 53,717 Impairment charge - leased assets (a) — — (3,735) — Loss on lease termination (b) (2,460) — (2,460) — Equity-based compensation expense (4,535) (6,253) (10,172) (18,307) Acquisition-related expense (c) (328) (3,928) (1,585) (4,871) Fair value adjustments to contingent consideration (d) (1,710) (290) (1,995) (10) Other (236) (202) (1,035) (50) Interest income 159 19 178 182 Interest expense (4,032) (2,124) (7,683) (4,222) Depreciation and amortization (9,113) (6,846) (18,098) (13,654) Income (loss) before provision for income taxes $ 12,876 $ 11,074 $ 17,026 $ 12,785 (a) Represents the impairment recognized on a portion of the Company’s corporate headquarters office building. See Note 2, Summary of Significant Accounting Policies for additional information. (b) During the second quarter of 2022, the loss was recognized in connection with the termination of the booj office lease. See Note 2, Summary of Significant Accounting Policies for additional information. (c) Acquisition-related expense includes personnel, legal, accounting, advisory and consulting fees incurred in connection with the evaluation, due diligence, execution and integration of acquisitions. (d) Fair value adjustments to contingent consideration include amounts recognized for changes in the estimated fair value of the contingent consideration liabilities. See Note 9, Fair Value Measurements for additional information . |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events. | |
Subsequent Events | 14. Subsequent Events On July 5, 2022, the Company entered into an agreement with InsideRE, LLC (“InsideRE”), the developers of the kvCORE platform, to provide technology to RE/MAX affiliates. The kvCORE platform will replace certain functionality currently provided by the booj platform. As a result, the Company expects to reduce its overall workforce by approximately 17% and the Company expects to incur a pretax cash charge for one-time termination benefits, which consist of severance and related costs, between approximately $5.8 million and $6.8 million in the third quarter of 2022. Additionally, on July 7, 2022, the Company issued a press release providing an update on its strategic initiatives centered on reinvigorating U.S. agent count growth, accelerating the expansion of its growing mortgage business and evaluating options regarding the ongoing operations of Gadberry Group. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying Condensed Consolidated Balance Sheet at December 31, 2021, which was derived from the audited consolidated financial statements at that date, and the unaudited interim condensed consolidated financial statements and notes thereto have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying condensed consolidated financial statements are presented on a consolidated basis and include the accounts of Holdings and its consolidated subsidiaries. All significant intercompany accounts and transactions have been eliminated. In the opinion of management, the accompanying condensed consolidated financial statements reflect all normal and recurring adjustments necessary to present fairly the Company’s financial position as of June 30, 2022 and the results of its operations and comprehensive income, cash flows and changes in its stockholders’ equity for the three and six months ended June 30, 2022 and 2021. Interim results may not be indicative of full-year performance. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements within the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 Annual Report on Form 10-K”). Please refer to that document for a fuller discussion of all significant accounting policies. |
Use of Estimates | Use of Estimates The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Segment Reporting | Segment Reporting The Company operates under the following four operating segments: Real Estate, Mortgage, Marketing Funds and Other. Due to quantitative insignificance, the “Other” operating segment is comprised of operations which do not meet the criteria of a reportable segment. |
Revenue Recognition | Revenue Recognition The Company generates most of its revenue from contracts with customers. The Company’s major streams of revenue are: ● Continuing franchise fees, which are fixed contractual fees paid monthly by RE/MAX or Motto franchisees or Independent Region sub-franchisors based on the number of RE/MAX agents or Motto franchisees based on the number of open offices. ● Annual dues, which are fees charged directly to RE/MAX agents. ● Broker fees, which are fees on real estate commissions when a RE/MAX agent assists a consumer with buying or selling a home. ● Marketing Funds fees, which are fixed contractual fees paid monthly by franchisees based on the number of RE/MAX agents or Motto franchisees based on the number of offices. ● Franchise sales and other revenue, which consists of fees from initial sales of RE/MAX and Motto franchises, renewals of RE/MAX franchises and master franchise fees, as well as data services subscription revenue, preferred marketing arrangements, technology products and subscription revenue, event-based revenue from education and other programs and mortgage loan processing revenue. Deferred Revenue and Commissions Related to Franchise Sales Deferred revenue is primarily driven by Franchise sales and Annual dues, as discussed above, and is included in “Deferred revenue” and “Deferred revenue, net of current portion” on the Consolidated Balance Sheets. Other deferred revenue is primarily related to event-based revenue. The activity consists of the following (in thousands): Balance at Revenue Balance at January 1, 2022 New billings recognized (a) June 30, 2022 Franchise sales $ 26,043 $ 3,884 $ (4,321) $ 25,606 Annual dues 15,020 18,557 (17,936) 15,641 Other 5,044 12,149 (13,440) 3,753 $ 46,107 $ 34,590 $ (35,697) $ 45,000 (a) Revenue recognized related to the beginning balance for Franchise sales and Annual dues were $4.1 million and $11.3 million, respectively, for the six months ended June 30, 2022. Commissions paid on franchise sales are recognized as an asset and amortized over the contract life of the franchise agreement. The activity in the Company’s capitalized contract costs for commissions (which are included in “other current assets” and “other assets, net of current portion” on the Condensed Consolidated Balance Sheets) consist of the following (in thousands): Additions to Balance at contract cost Expense Balance at January 1, 2022 for new activity recognized June 30, 2022 Capitalized contract costs for commissions $ 4,010 $ 913 $ (1,026) $ 3,897 Transaction Price Allocated to the Remaining Performance Obligations The following table includes estimated revenue by year, excluding certain other immaterial items, expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period (in thousands): Remainder of 2022 2023 2024 2025 2026 2027 Thereafter Total Annual dues $ 12,199 $ 3,442 $ — $ — $ — $ — $ — $ 15,641 Franchise sales 3,683 6,385 5,205 3,952 2,556 1,277 2,548 25,606 Total $ 15,882 $ 9,827 $ 5,205 $ 3,952 $ 2,556 $ 1,277 $ 2,548 $ 41,247 Disaggregated Revenue In the following table, segment revenue is disaggregated by Company-Owned or Independent Regions, where applicable, by segment and by geographical area (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 U.S. Company-Owned Regions (a) $ 42,733 $ 37,613 $ 81,887 $ 70,159 U.S. Independent Regions (a) 1,877 3,730 3,578 7,018 Canada Company-Owned Regions (a) 11,434 4,800 21,909 8,354 Canada Independent Regions (a) 715 2,364 1,418 4,569 Global 3,193 2,854 6,285 5,495 Fee revenue (b) 59,952 51,361 115,077 95,595 Franchise sales and other revenue (c) 5,824 4,930 15,436 11,850 Total Real Estate 65,776 56,291 130,513 107,445 U.S. (a) 17,641 16,359 35,200 32,541 Canada (a) 4,988 1,424 10,001 3,161 Global 280 259 559 485 Total Marketing Funds 22,909 18,042 45,760 36,187 Mortgage (d) 3,115 2,410 6,143 4,733 Other (d) 372 503 760 1,176 Total $ 92,172 $ 77,246 $ 183,176 $ 149,541 (a) In July 2021, the Company acquired the operating companies of the North America regions of INTEGRA. Fee revenue from these regions were previously recognized in the U.S. and Canada Independent Regions. See Note 5, Acquisitions , for information related to this transaction. (b) Fee revenue includes Continuing franchise fees, Annual dues and Broker fees. (c) Franchise sales and other revenue is derived primarily within the U.S. (d) Revenue from Mortgage and Other are derived exclusively within the U.S. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash All cash held by the Marketing Funds is contractually restricted. The following table reconciles the amounts presented for cash, both unrestricted and restricted, in the Condensed Consolidated Balance Sheets to the amounts presented in the Condensed Consolidated Statements of Cash Flows (in thousands): June 30, December 31, 2022 2021 Cash and cash equivalents $ 118,132 $ 126,270 Restricted cash 35,677 32,129 Total cash, cash equivalents and restricted cash $ 153,809 $ 158,399 |
Services Provided to the Marketing Funds by Real Estate | Services Provided to the Marketing Funds by Real Estate Real Estate charges the Marketing Funds for various services it performs. These services primarily comprise (a) building and maintaining agent marketing technology, including customer relationship management tools, the www.remax.com website, agent, office and team websites, and mobile apps, (b) dedicated employees focused on marketing campaigns, and (c) various administrative services including customer support of technology, accounting and legal. Because these costs are ultimately paid by the Marketing Funds, they do not impact the net income (loss) of Holdings as the Marketing Funds have no reported net income (loss). Costs charged from Real Estate to the Marketing Funds are as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Technology − operating $ 3,519 $ 3,233 $ 7,743 $ 6,833 Technology − capital 530 224 1,161 404 Marketing staff and administrative services 1,140 1,189 2,681 2,307 Total $ 5,189 $ 4,646 $ 11,585 $ 9,544 |
Accounts and Notes Receivable | Accounts and Notes Receivable As of June 30, 2022, and December 31, 2021, the Company had allowances against accounts and notes receivable of $9.1 million and $9.6 million, respectively. |
Property and Equipment | Property and Equipment As of June 30, 2022, and December 31, 2021, the Company had accumulated depreciation of $10.6 million and $9.4 million, respectively. |
Leases | Leases The Company leases corporate offices, a distribution center, billboards and certain equipment. As all franchisees are independently owned and operated; there are no leases recognized for any offices used by the Company’s franchisees. All the Company’s material leases are classified as operating leases. The Company acts as the lessor for sublease agreements on its corporate headquarters, consisting solely of operating leases. During the first quarter of 2022, the Company subleased a portion of its corporate headquarters. As a result, the Company performed an impairment test on the portion subleased. Based on a comparison of undiscounted cash flows to the right of use (“ROU”) asset, the Company determined that the asset was impaired, driven largely by the difference between the existing lease rate on the Company’s corporate headquarters and the sublease rates received. This resulted in an impairment charge of $3.7 million, which reflects the excess of the ROU asset carrying value over its fair value. During the second quarter of 2022, the Company terminated its booj office lease, which is owned by an entity controlled by former employees of the Company. As a result, the Company wrote off an ROU asset of $2.7 million and derecognized $1.5 million of lease liability associated with the terminated lease. The Company also recognized a loss on termination of $2.5 million, which included a lease termination payment of $1.3 million. |
Foreign Currency Derivatives | Foreign Currency Derivatives The Company is exposed to foreign currency transaction gains and losses related to certain foreign currency denominated asset and liability positions, with the Canadian dollar representing the most significant exposure primarily from an intercompany Canadian loan between RMCO and the new Canadian entity for INTEGRA. The Company uses short duration foreign currency forward contracts, generally with maturities ranging from a few days to a few months, to minimize its exposures related to foreign currency exchange rate fluctuations. None of these contracts are designated as accounting hedges as the underlying currency positions are revalued through “Foreign currency transaction gains (losses)” along with the related derivative contracts. As of June 30, 2022, the Company had an aggregate U.S. dollar equivalent of $57.5 million notional amount of Canadian dollar forward contracts to hedge these exposures. |
New Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements None. New Accounting Pronouncements Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) Debt In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Summary of Significant Accounting Policies | |
Schedule of deferred revenue for franchise sales and annual dues | Deferred revenue is primarily driven by Franchise sales and Annual dues, as discussed above, and is included in “Deferred revenue” and “Deferred revenue, net of current portion” on the Consolidated Balance Sheets. Other deferred revenue is primarily related to event-based revenue. The activity consists of the following (in thousands): Balance at Revenue Balance at January 1, 2022 New billings recognized (a) June 30, 2022 Franchise sales $ 26,043 $ 3,884 $ (4,321) $ 25,606 Annual dues 15,020 18,557 (17,936) 15,641 Other 5,044 12,149 (13,440) 3,753 $ 46,107 $ 34,590 $ (35,697) $ 45,000 (a) Revenue recognized related to the beginning balance for Franchise sales and Annual dues were $4.1 million and $11.3 million, respectively, for the six months ended June 30, 2022. |
Schedule of commissions related to franchise sales | The activity in the Company’s capitalized contract costs for commissions (which are included in “other current assets” and “other assets, net of current portion” on the Condensed Consolidated Balance Sheets) consist of the following (in thousands): Additions to Balance at contract cost Expense Balance at January 1, 2022 for new activity recognized June 30, 2022 Capitalized contract costs for commissions $ 4,010 $ 913 $ (1,026) $ 3,897 |
Schedule of transaction price allocated to the remaining performance obligations | The following table includes estimated revenue by year, excluding certain other immaterial items, expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period (in thousands): Remainder of 2022 2023 2024 2025 2026 2027 Thereafter Total Annual dues $ 12,199 $ 3,442 $ — $ — $ — $ — $ — $ 15,641 Franchise sales 3,683 6,385 5,205 3,952 2,556 1,277 2,548 25,606 Total $ 15,882 $ 9,827 $ 5,205 $ 3,952 $ 2,556 $ 1,277 $ 2,548 $ 41,247 |
Schedule of disaggregated revenue | In the following table, segment revenue is disaggregated by Company-Owned or Independent Regions, where applicable, by segment and by geographical area (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 U.S. Company-Owned Regions (a) $ 42,733 $ 37,613 $ 81,887 $ 70,159 U.S. Independent Regions (a) 1,877 3,730 3,578 7,018 Canada Company-Owned Regions (a) 11,434 4,800 21,909 8,354 Canada Independent Regions (a) 715 2,364 1,418 4,569 Global 3,193 2,854 6,285 5,495 Fee revenue (b) 59,952 51,361 115,077 95,595 Franchise sales and other revenue (c) 5,824 4,930 15,436 11,850 Total Real Estate 65,776 56,291 130,513 107,445 U.S. (a) 17,641 16,359 35,200 32,541 Canada (a) 4,988 1,424 10,001 3,161 Global 280 259 559 485 Total Marketing Funds 22,909 18,042 45,760 36,187 Mortgage (d) 3,115 2,410 6,143 4,733 Other (d) 372 503 760 1,176 Total $ 92,172 $ 77,246 $ 183,176 $ 149,541 (a) In July 2021, the Company acquired the operating companies of the North America regions of INTEGRA. Fee revenue from these regions were previously recognized in the U.S. and Canada Independent Regions. See Note 5, Acquisitions , for information related to this transaction. (b) Fee revenue includes Continuing franchise fees, Annual dues and Broker fees. (c) Franchise sales and other revenue is derived primarily within the U.S. (d) Revenue from Mortgage and Other are derived exclusively within the U.S. |
Schedule of reconciliation of cash, both unrestricted and restricted | The following table reconciles the amounts presented for cash, both unrestricted and restricted, in the Condensed Consolidated Balance Sheets to the amounts presented in the Condensed Consolidated Statements of Cash Flows (in thousands): June 30, December 31, 2022 2021 Cash and cash equivalents $ 118,132 $ 126,270 Restricted cash 35,677 32,129 Total cash, cash equivalents and restricted cash $ 153,809 $ 158,399 |
Schedule of cost charges to intersegment | Costs charged from Real Estate to the Marketing Funds are as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Technology − operating $ 3,519 $ 3,233 $ 7,743 $ 6,833 Technology − capital 530 224 1,161 404 Marketing staff and administrative services 1,140 1,189 2,681 2,307 Total $ 5,189 $ 4,646 $ 11,585 $ 9,544 |
Non-controlling Interest (Table
Non-controlling Interest (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Noncontrolling Interest | |
Summary of Ownership of the Common Units | The ownership of the common units in RMCO is summarized as follows: June 30, 2022 December 31, 2021 Shares Ownership % Shares Ownership % Non-controlling interest ownership of common units in RMCO 12,559,600 40.1 % 12,559,600 40.0 % Holdings outstanding Class A common stock (equal to Holdings common units in RMCO) 18,753,835 59.9 % 18,806,194 60.0 % Total common units in RMCO 31,313,435 100.0 % 31,365,794 100.0 % |
Reconciliation from Income Before Provision for Income Taxes to Net Income | A reconciliation of “Income (loss) before provision for income taxes” to “Net income (loss) attributable to RE/MAX Holdings, Inc.” and “Net Income (loss) attributable to non-controlling interest” in the accompanying Condensed Consolidated Statements of Income for the periods indicated is detailed as follows (in thousands, except percentages): Three Months Ended June 30, 2022 2021 RE/MAX Holdings, Inc. Non-controlling interest Total RE/MAX Holdings, Inc. Non-controlling interest Total Weighted average ownership percentage of RMCO (a) 60.2 % 39.8 % 100.0 % 59.8 % 40.2 % 100.0 % Income (loss) before provision for income taxes (a) $ 7,750 $ 5,126 $ 12,876 $ 6,609 $ 4,465 $ 11,074 (Provision) / benefit for income taxes (b)(c) (1,921) (680) (2,601) (1,348) 634 (714) Net income (loss) $ 5,829 $ 4,446 $ 10,275 $ 5,261 $ 5,099 $ 10,360 Six Months Ended June 30, 2022 2021 RE/MAX Holdings, Inc. Non-controlling interest Total RE/MAX Holdings, Inc. Non-controlling interest Total Weighted average ownership percentage of RMCO (a) 60.2 % 39.8 % 100.0 % 59.7 % 40.3 % 100.0 % Income (loss) before provision for income taxes (a) $ 10,235 $ 6,791 $ 17,026 $ 7,628 $ 5,157 $ 12,785 (Provision) / benefit for income taxes (b)(c)(d) (2,955) (851) (3,806) (1,204) 542 (662) Net income (loss) $ 7,280 $ 5,940 $ 13,220 $ 6,424 $ 5,699 $ 12,123 (a) The weighted average ownership percentage of RMCO differs from the allocation of income (loss) before provision for income taxes between Holdings and the non-controlling interest due to certain relatively insignificant items recorded at Holdings. (b) The provision for income taxes attributable to Holdings is primarily comprised of U.S. federal and state income taxes on its proportionate share of the flow-through income from RMCO. It also includes Holdings’ share of taxes directly incurred by RMCO and its subsidiaries, including taxes in certain foreign jurisdictions. (c) Beginning in July 2021 as a result of the acquisition of INTEGRA, RMCO now also owns two corporate subsidiaries, which unlike RMCO are not pass-through entities. These entities are taxed at the corporate level on 100% of their income. (d) The provision for income taxes attributable to the non-controlling interest represents its share of taxes incurred by RMCO and its subsidiaries (both foreign taxes and taxes from non-flow through subsidiaries). Otherwise, because RMCO is a flow-through entity, there is no U.S. federal and state income tax provision recorded on the non-controlling interest. |
Distributions Paid or Payable | The distributions paid or payable to non-controlling unitholders are summarized as follows (in thousands): Six Months Ended June 30, 2022 2021 Tax and other distributions $ 1,645 $ 1,221 Dividend distributions 5,778 5,778 Total distributions to non-controlling unitholders $ 7,423 $ 6,999 |
Earnings Per Share, Dividends_2
Earnings Per Share, Dividends and Repurchases (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share, Dividends and Repurchases | |
Reconciliation of Numerator and Denominator used in Basic and Diluted EPS Calculations | The following is a reconciliation of the numerator and denominator used in the basic and diluted earnings per share (“EPS”) calculations (in thousands, except shares and per share information): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Numerator Net income (loss) attributable to RE/MAX Holdings, Inc. $ 5,829 $ 5,261 $ 7,280 $ 6,424 Denominator for basic net income (loss) per share of Class A common stock Weighted average shares of Class A common stock outstanding 18,997,397 18,719,477 18,965,911 18,608,005 Denominator for diluted net income (loss) per share of Class A common stock Weighted average shares of Class A common stock outstanding 18,997,397 18,719,477 18,965,911 18,608,005 Add dilutive effect of the following: Restricted stock 155,952 221,866 216,566 296,031 Weighted average shares of Class A common stock outstanding, diluted 19,153,349 18,941,343 19,182,477 18,904,036 Earnings (loss) per share of Class A common stock Net income (loss) attributable to RE/MAX Holdings, Inc. per share of Class A common stock, basic $ 0.31 $ 0.28 $ 0.38 $ 0.35 Net income (loss) attributable to RE/MAX Holdings, Inc. per share of Class A common stock, diluted $ 0.30 $ 0.28 $ 0.38 $ 0.34 |
Schedule of Dividends Declared and Paid Quarterly per Share | Dividends declared and paid during each quarter ended per share on all outstanding shares of Class A common stock were as follows (in thousands, except per share information): Six Months Ended June 30, 2022 2021 Quarter end declared Date paid Per share Amount paid to Class A stockholders Amount paid to Non-controlling unitholders Date paid Per share Amount paid to Class A stockholders Amount paid to Non-controlling unitholders March 31 March 16, 2022 $ 0.23 $ 4,439 $ 2,889 March 17, 2021 $ 0.23 $ 4,326 $ 2,889 June 30 May 25, 2022 0.23 4,420 2,889 June 2, 2021 0.23 4,345 2,889 $ 0.46 $ 8,859 $ 5,778 $ 0.46 $ 8,671 $ 5,778 |
Acquisitions (Tables)
Acquisitions (Tables) - RE/MAX INTEGRA North America Region Asset Acquisition | 6 Months Ended |
Jun. 30, 2022 | |
Business Acquisition [Line Items] | |
Summary of the allocation of the purchase price to the fair value of assets acquired and liabilities assumed | The following table summarizes the allocation of the purchase price (net of settlement loss) to the fair value of assets acquired and liabilities assumed for the acquisition (in thousands): Cash and cash equivalents and restricted cash $ 14,098 Accounts and notes receivable, net 6,610 Income taxes receivable 494 Other current assets 502 Property and equipment 63 Franchise agreements (a) 92,250 Other intangible assets, net (a) 9,200 Other assets, net of current portion 2,174 Goodwill (b) 108,606 Accounts payable (3,461) Accrued liabilities (14,045) Income taxes payable (3,107) Deferred revenue (824) Deferred tax liabilities, net (16,260) Other liabilities, net of current portion (2,200) Total purchase price allocated to assets and liabilities 194,100 Loss on contract settlement 40,900 Total consideration $ 235,000 (a) The Company expects to amortize the acquired Franchise agreements over a weighted average useful life of approximately 13 years and the non-compete agreements included in Other intangible assets, net over a useful life of 5 years using the straight-line method. (b) The Company expects 50% of the goodwill in Canada but none in the U.S. to be deductible for tax purposes. |
Summary of Unaudited Pro Forma Information | The pro forma information presented below is for illustrative purposes only and should not be relied upon as necessarily being indicative of the historical results that would have been obtained if the acquisitions had actually occurred on that date, nor of the results that may be obtained in the future (in thousands). Three Months Ended Six Months Ended June 30 June 30 2022 2021 2022 2021 Total revenue $ 92,172 $ 89,296 $ 183,176 $ 173,517 Net income (loss) attributable to RE/MAX Holdings, Inc. $ 5,829 $ 4,262 $ 7,280 $ 5,734 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Intangible Assets and Goodwill | |
Schedule of components of intangible assets | The following table provides the components of the Company’s intangible assets (in thousands, except weighted average amortization period in years): Weighted Average As of June 30, 2022 As of December 31, 2021 Amortization Initial Accumulated Net Initial Accumulated Net Period Cost Amortization Balance Cost Amortization Balance Franchise agreements 12.7 $ 267,088 $ (135,105) $ 131,983 $ 267,770 $ (123,938) $ 143,832 Other intangible assets: Software (a) 4.0 $ 48,176 $ (27,335) $ 20,841 $ 51,368 $ (29,682) $ 21,686 Trademarks 8.3 2,361 (1,708) 653 2,356 (1,533) 823 Non-compete agreements 4.3 13,149 (3,332) 9,817 13,100 (4,563) 8,537 Training materials 5.0 2,400 (1,840) 560 2,400 (1,600) 800 Other 6.6 870 (354) 516 1,670 (986) 684 Total other intangible assets 4.3 $ 66,956 $ (34,569) $ 32,387 $ 70,894 $ (38,364) $ 32,530 (a) As of June 30, 2022 and December 31, 2021, capitalized software development costs of $4.7 million and $1.9 million, respectively, were related to technology projects not yet complete and ready for their intended use and thus were not subject to amortization. |
Schedule of estimated future amortization of intangible assets, other than goodwill | As of June 30, 2022, the estimated future amortization expense related to intangible assets includes the estimated amortization expense associated with the Company’s intangible assets assumed with the Company’s acquisitions (in thousands): Remainder of 2022 $ 15,631 2023 30,878 2024 25,591 2025 20,640 2026 14,606 Thereafter 57,024 $ 164,370 |
Schedule of changes to goodwill | The following table presents changes to goodwill by reportable segment (in thousands): Real Estate Mortgage Total Balance, January 1, 2022 $ 250,482 $ 18,633 $ 269,115 Purchase price adjustments (332) — (332) Effect of changes in foreign currency exchange rates (729) — (729) Balance, June 30, 2022 $ 249,421 $ 18,633 $ 268,054 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Accrued Liabilities. | |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following (in thousands): June 30, 2022 December 31, 2021 Marketing Funds (a) $ 57,267 $ 61,997 Accrued payroll and related employee costs 10,196 22,634 Accrued taxes 1,053 2,053 Accrued professional fees 3,254 3,660 Other 5,117 6,424 $ 76,887 $ 96,768 (a) Consists primarily of liabilities recognized to reflect the contractual restriction that all funds collected in the Marketing Funds must be spent for designated purposes. See Note 2, Summary of Significant Accounting Policies for additional information. |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt | |
Schedule of debt | Debt, net of current portion, consists of the following (in thousands): June 30, 2022 December 31, 2021 Senior Secured Credit Facility $ 455,400 $ 457,700 Less unamortized debt issuance costs (3,852) (4,168) Less unamortized debt discount costs (1,362) (1,473) Less current portion (4,600) (4,600) $ 445,586 $ 447,459 |
Schedule of Maturities of Debt | As of June 30, 2022, maturities of debt are as follows (in thousands): Remainder of 2022 $ 2,300 2023 4,600 2024 4,600 2025 4,600 2026 4,600 Thereafter 434,700 $ 455,400 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Measurements | |
Liabilities measured at fair value on a recurring basis | A summary of the Company’s liabilities measured at fair value on a recurring basis is as follows (in thousands): As of June 30, 2022 As of December 31, 2021 Fair Value Level 1 Level 2 Level 3 Fair Value Level 1 Level 2 Level 3 Liabilities Motto contingent consideration $ 6,500 $ — $ — $ 6,500 $ 4,530 $ — $ — $ 4,530 Gadberry contingent consideration 1,155 — — 1,155 1,250 — — 1,250 Contingent consideration (a) $ 7,655 $ — $ — $ 7,655 $ 5,780 $ — $ — $ 5,780 (a) Recorded as a component of “Accrued liabilities” and “Other liabilities, net of current portion” in the accompanying Condensed Consolidated Balance Sheets. |
Reconciliation of the contingent consideration | The table below presents a reconciliation of the contingent consideration (in thousands): Total Balance at January 1, 2022 $ 5,780 Fair value adjustments 1,995 Cash payments (120) Balance at June 30, 2022 $ 7,655 |
Summary of carrying value and fair value of senior secured credit facility | The following table summarizes the carrying value and estimated fair value of the Senior Secured Credit Facility (in thousands): June 30, 2022 December 31, 2021 Carrying Amount Fair Value Level 2 Carrying Amount Fair Value Level 2 Senior Secured Credit Facility $ 450,186 $ 407,583 $ 452,059 $ 454,267 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Income Taxes | |
Schedule of unrecognized tax benefits | As of June 30, 2022 2021 Balance, January 1 $ 1,587 $ 5,300 Increases related to prior period tax positions — 96 Decrease related to prior year tax positions — (815) Increase related to tax positions from acquired companies 309 — Settlements — (3,776) Foreign currency transaction (gains) losses — 380 Balance, June 30 $ 1,896 $ 1,185 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Schedule of Employee Stock-Based Compensation Expense | Equity-based compensation expense under the RE/MAX Holdings, Inc. 2013 Omnibus Incentive Plan (the “Incentive Plan”), net of the amount capitalized in internally developed software, is as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Expense from time-based awards (a) $ 3,844 $ 3,744 $ 7,692 $ 13,565 Expense from performance-based awards (b) 188 871 278 1,667 Expense from bonus to be settled in shares (c) 503 1,638 2,202 3,075 Equity-based compensation expense $ 4,535 $ 6,253 $ 10,172 $ 18,307 (a) During the first quarter of 2021, the Company recognized $5.5 million of expense upon acceleration of certain grants that were issued to two employees of an acquired company who departed during the first quarter of 2021. (b) Expense recognized for performance-based awards is re-assessed each quarter based on expectations of achievement against the performance conditions. During the first quarter of 2022, the Company had a significant amount of forfeitures related to performance-based awards issued to the Company’s former CEO which, subsequent to his departure, will no longer vest. (c) A portion of the annual corporate bonus earned is to be settled in shares. These amounts are recognized as “Accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets and are not included in “Additional paid-in capital” until the shares are issued. |
Time-based awards | |
Schedule of Restricted Stock Units | The following table summarizes equity-based compensation activity related to time-based restricted stock units and restricted stock awards: Shares Weighted average grant date fair value per share Balance, January 1, 2022 765,813 $ 36.84 Granted 386,926 $ 29.25 Shares vested (including tax withholding) (a) (302,309) $ 38.04 Forfeited (70,181) $ 34.02 Balance, June 30, 2022 780,249 $ 32.86 (a) Pursuant to the terms of the Incentive Plan, shares withheld by the Company for the payment of the employee's tax withholding related to shares vesting are added back to the pool of shares available for future awards. |
Performance-based awards | |
Schedule of Restricted Stock Units | The following table summarizes equity-based compensation activity related to performance-based restricted stock units: Shares Weighted average grant date fair value per share Balance, January 1, 2022 241,821 $ 31.02 Granted (a) 160,863 $ 29.86 Shares vested (including tax withholding) (b) (30,893) $ 29.86 Forfeited (89,529) $ 31.05 Balance, June 30, 2022 282,262 $ 30.48 (a) Represents the total participant target award. (b) Pursuant to the terms of the Incentive Plan, shares withheld by the Company for the payment of the employee's tax withholding related to shares vesting are added back to the pool of shares available for future awards. |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Information | |
Schedule of Revenue from External Customers By Segment | The following table presents revenue from external customers by segment (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Continuing franchise fees $ 31,619 $ 25,039 $ 62,739 $ 48,648 Annual dues 9,016 8,869 17,936 17,541 Broker fees 19,317 17,453 34,402 29,406 Franchise sales and other revenue 5,824 4,930 15,436 11,850 Total Real Estate 65,776 56,291 130,513 107,445 Continuing franchise fees 2,509 1,916 4,888 3,681 Franchise sales and other revenue 606 494 1,255 1,052 Total Mortgage 3,115 2,410 6,143 4,733 Marketing Funds fees 22,909 18,042 45,760 36,187 Other 372 503 760 1,176 Total revenue $ 92,172 $ 77,246 $ 183,176 $ 149,541 |
Schedule of Revenue and Adjusted EBITDA of the Company's Reportable Segment | The following table presents a reconciliation of Adjusted EBITDA by segment to income before provision for income taxes (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Adjusted EBITDA: Real Estate $ 36,331 $ 31,503 $ 67,010 $ 55,782 Adjusted EBITDA: Mortgage (1,164) (733) (3,337) (1,883) Adjusted EBITDA: Other (36) (72) (62) (182) Adjusted EBITDA: Consolidated 35,131 30,698 63,611 53,717 Impairment charge - leased assets (a) — — (3,735) — Loss on lease termination (b) (2,460) — (2,460) — Equity-based compensation expense (4,535) (6,253) (10,172) (18,307) Acquisition-related expense (c) (328) (3,928) (1,585) (4,871) Fair value adjustments to contingent consideration (d) (1,710) (290) (1,995) (10) Other (236) (202) (1,035) (50) Interest income 159 19 178 182 Interest expense (4,032) (2,124) (7,683) (4,222) Depreciation and amortization (9,113) (6,846) (18,098) (13,654) Income (loss) before provision for income taxes $ 12,876 $ 11,074 $ 17,026 $ 12,785 (a) Represents the impairment recognized on a portion of the Company’s corporate headquarters office building. See Note 2, Summary of Significant Accounting Policies for additional information. (b) During the second quarter of 2022, the loss was recognized in connection with the termination of the booj office lease. See Note 2, Summary of Significant Accounting Policies for additional information. (c) Acquisition-related expense includes personnel, legal, accounting, advisory and consulting fees incurred in connection with the evaluation, due diligence, execution and integration of acquisitions. (d) Fair value adjustments to contingent consideration include amounts recognized for changes in the estimated fair value of the contingent consideration liabilities. See Note 9, Fair Value Measurements for additional information . |
Business and Organization (Deta
Business and Organization (Details) | 6 Months Ended |
Jun. 30, 2022 | |
REMAX | Motto | |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |
Percentage of Company consisting of franchises | 100% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Segment Reporting (Details) | 6 Months Ended |
Jun. 30, 2022 segment | |
Summary of Significant Accounting Policies | |
Number of Operating Segments | 4 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Deferred Revenue (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Disaggregation of Revenue [Line Items] | |
Balance at beginning of period | $ 46,107 |
New billings | 34,590 |
Revenue recognized | (35,697) |
Balance at the end of period | 45,000 |
Franchise sales | |
Disaggregation of Revenue [Line Items] | |
Balance at beginning of period | 26,043 |
New billings | 3,884 |
Revenue recognized | (4,321) |
Balance at the end of period | 25,606 |
Revenue recognized related to the beginning balance | 4,100 |
Annual dues | |
Disaggregation of Revenue [Line Items] | |
Balance at beginning of period | 15,020 |
New billings | 18,557 |
Revenue recognized | (17,936) |
Balance at the end of period | 15,641 |
Revenue recognized related to the beginning balance | 11,300 |
Other | |
Disaggregation of Revenue [Line Items] | |
Balance at beginning of period | 5,044 |
New billings | 12,149 |
Revenue recognized | (13,440) |
Balance at the end of period | $ 3,753 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Commissions Related to Franchise Sales (Details) - Commissions Related to Franchise Sales $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Capitalized Contract Cost [Line Items] | |
Balance at beginning of period | $ 4,010 |
Additions to contract cost for new activity | 913 |
Expense recognized | (1,026) |
Balance at end of period | $ 3,897 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Transaction Price (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Annual Dues And Franchise Sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 41,247 |
Annual dues | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | 15,641 |
Franchise sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | 25,606 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01 | Annual Dues And Franchise Sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 15,882 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01 | Annual dues | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 12,199 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01 | Franchise sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 3,683 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Annual Dues And Franchise Sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 9,827 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Annual dues | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 3,442 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Franchise sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 6,385 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Annual Dues And Franchise Sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 5,205 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Annual dues | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Franchise sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 5,205 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Annual Dues And Franchise Sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 3,952 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Annual dues | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Franchise sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 3,952 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Annual Dues And Franchise Sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 2,556 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Annual dues | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Franchise sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 2,556 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | Annual Dues And Franchise Sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 1,277 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | Annual dues | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | Franchise sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 1,277 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | Annual Dues And Franchise Sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 2,548 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | Annual dues | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | Franchise sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 2,548 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Disaggregated revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 92,172 | $ 77,246 | $ 183,176 | $ 149,541 |
Franchise sales and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 6,802 | 5,927 | 17,451 | 14,078 |
Real Estate | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 65,776 | 56,291 | 130,513 | 107,445 |
Real Estate | Fee revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 59,952 | 51,361 | 115,077 | 95,595 |
Real Estate | Franchise sales and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 5,824 | 4,930 | 15,436 | 11,850 |
Marketing Funds | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 22,909 | 18,042 | 45,760 | 36,187 |
Mortgage | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 3,115 | 2,410 | 6,143 | 4,733 |
Mortgage | Franchise sales and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 606 | 494 | 1,255 | 1,052 |
Other. | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 372 | 503 | 760 | 1,176 |
U.S. | Company -Owned Regions | Fee revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 42,733 | 37,613 | 81,887 | 70,159 |
U.S. | Independent Regions | Fee revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,877 | 3,730 | 3,578 | 7,018 |
U.S. | Marketing Funds | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 17,641 | 16,359 | 35,200 | 32,541 |
Canada | Company -Owned Regions | Fee revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 11,434 | 4,800 | 21,909 | 8,354 |
Canada | Independent Regions | Fee revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 715 | 2,364 | 1,418 | 4,569 |
Canada | Marketing Funds | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,988 | 1,424 | 10,001 | 3,161 |
Global | Global. | Fee revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 3,193 | 2,854 | 6,285 | 5,495 |
Global | Marketing Funds | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 280 | $ 259 | $ 559 | $ 485 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Cash, Cash Equivalents and Restricted Cash | ||||
Cash and cash equivalents | $ 118,132 | $ 126,270 | ||
Restricted cash | 35,677 | 32,129 | ||
Total cash, cash equivalents and restricted cash | 153,809 | 158,399 | $ 121,677 | $ 121,227 |
Marketing funds | ||||
Cash, Cash Equivalents and Restricted Cash | ||||
Cash and cash equivalents | 118,132 | 126,270 | ||
Restricted cash | 35,677 | 32,129 | ||
Total cash, cash equivalents and restricted cash | $ 153,809 | $ 158,399 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Services Provided to Marketing Funds by REMAX Franchising (Details) - Marketing funds - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Costs charged | $ 5,189 | $ 4,646 | $ 11,585 | $ 9,544 |
Technology - operating | ||||
Costs charged | 3,519 | 3,233 | 7,743 | 6,833 |
Technology - capital | ||||
Costs charged | 530 | 224 | 1,161 | 404 |
Marketing staff and administrative services | ||||
Costs charged | $ 1,140 | $ 1,189 | $ 2,681 | $ 2,307 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Accounts and Notes Receivable (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Summary of Significant Accounting Policies | ||
Accounts and notes receivable, allowance | $ 9.1 | $ 9.6 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Summary of Significant Accounting Policies | ||
Property and equipment, accumulated depreciation | $ 10.6 | $ 9.4 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Leases (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 USD ($) lease | Mar. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) lease | |
Leases | |||
Number of franchisees' leases recognized by the Company | lease | 0 | 0 | |
ROU Assets written off | $ 2,700 | ||
Operating Lease Liability Derecognized | 1,500 | $ 1,500 | |
Loss on termination recognized | (2,460) | (2,460) | |
Payments For Lease Termination | $ 1,300 | 1,285 | |
Impairment charge - leased assets | $ 3,700 | $ 3,735 |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Foreign Currency Derivatives (Details) $ in Millions | Jun. 30, 2022 USD ($) |
Foreign Currency Exchange | Canadian Dollar | |
Derivative [Line Items] | |
Notional amount | $ 57.5 |
Non-controlling Interest - Owne
Non-controlling Interest - Ownership of common units in RMCO (Details) - RMCO, LLC - shares | Jun. 30, 2022 | Dec. 31, 2021 |
Shares | ||
Holdings outstanding Class A common stock (equal to Holdings common units in RMCO) | 18,753,835 | 18,806,194 |
Total number of common stock units in RMCO | 31,313,435 | 31,365,794 |
Ownership Percentage | ||
Holdings outstanding Class A common stock (equal to Holdings common units in RMCO) | 59.90% | 60% |
Total percentage of common stock units | 100% | 100% |
RIHI | ||
Shares | ||
Non-controlling interest ownership of common units in RMCO | 12,559,600 | 12,559,600 |
Ownership Percentage | ||
Non-controlling interest ownership of common units in RMCO | 40.10% | 40% |
Non-controlling Interest - Net
Non-controlling Interest - Net income reconciliation (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jul. 21, 2021 subsidiary | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Dec. 31, 2021 | |
Minority Interest [Line Items] | ||||||||
Income (loss) before provision for income taxes attributable to RE/MAX Holdings, Inc. | $ 7,750 | $ 6,609 | $ 10,235 | $ 7,628 | ||||
Income (loss) before provision for income taxes: Non-controlling interest | 5,126 | 4,465 | 6,791 | 5,157 | ||||
Income (loss) before provision for income taxes | 12,876 | 11,074 | 17,026 | 12,785 | ||||
(Provision)/benefit for income taxes attributable to RE/MAX Holdings, Inc. | (1,921) | (1,348) | (2,955) | (1,204) | ||||
(Provision)/benefit for income taxes: Non-controlling interest | (680) | 634 | (851) | 542 | ||||
(Provision)/benefit for income taxes | (2,601) | (714) | (3,806) | (662) | ||||
Net income (loss) attributable to RE/MAX Holdings, Inc. | 5,829 | 5,261 | 7,280 | 6,424 | ||||
Net income (loss): Non-controlling interest | 4,446 | 5,099 | 5,940 | 5,699 | ||||
Net income (loss) | $ 10,275 | $ 2,945 | $ 10,360 | $ 1,763 | $ 13,220 | $ 12,123 | ||
RMCO, LLC | ||||||||
Minority Interest [Line Items] | ||||||||
Weighted average ownership percentage | 100% | 100% | 100% | |||||
Number of corporate subsidiaries owned | subsidiary | 2 | |||||||
Non-controlling interests income tax percent | 100% | |||||||
RMCO, LLC | Weighted Average | ||||||||
Minority Interest [Line Items] | ||||||||
Weighted average ownership percentage attributable to RE/MAX Holdings, Inc. | 60.20% | 59.80% | 60.20% | 59.70% | ||||
Weighted average ownership percentage | 100% | 100% | 100% | 100% | ||||
RIHI | RMCO, LLC | Weighted Average | ||||||||
Minority Interest [Line Items] | ||||||||
Weighted average ownership percentage: Non-controlling interest | 39.80% | 40.20% | 39.80% | 40.30% |
Non-controlling Interest - Dist
Non-controlling Interest - Distributions Paid or Payable (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Dividends Payable [Line Items] | ||
Distributions paid or payable to or on behalf of non-controlling unitholders | $ 7,423 | $ 6,999 |
Tax and other distributions | ||
Dividends Payable [Line Items] | ||
Distributions paid or payable to or on behalf of non-controlling unitholders | 1,645 | 1,221 |
Dividend distributions | ||
Dividends Payable [Line Items] | ||
Distributions paid or payable to or on behalf of non-controlling unitholders | $ 5,778 | $ 5,778 |
Earnings Per Share, Dividends_3
Earnings Per Share, Dividends and Repurchases - Reconciliation of the numerator and denominator used in basic and diluted EPS calculations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Numerator | ||||
Net income (loss) attributable to RE/MAX Holdings, Inc. | $ 5,829 | $ 5,261 | $ 7,280 | $ 6,424 |
Common Class A | ||||
Denominator for basic net income (loss) per share of Class A common stock | ||||
Weighted average shares of Class A common stock outstanding | 18,997,397 | 18,719,477 | 18,965,911 | 18,608,005 |
Denominator for diluted net income (loss) per share of Class A common stock | ||||
Weighted average shares of Class A common stock outstanding | 18,997,397 | 18,719,477 | 18,965,911 | 18,608,005 |
Add dilutive effect of the following: | ||||
Weighted average shares of Class A common stock outstanding, diluted | 19,153,349 | 18,941,343 | 19,182,477 | 18,904,036 |
Earnings (loss) per share of Class A common stock | ||||
Net income (loss) attributable to RE/MAX Holdings, Inc. per share of Class A common stock, basic | $ 0.31 | $ 0.28 | $ 0.38 | $ 0.35 |
Net income (loss) attributable to RE/MAX Holdings, Inc. per share of Class A common stock, diluted | $ 0.30 | $ 0.28 | $ 0.38 | $ 0.34 |
Restricted Stock Units (RSUs) | ||||
Add dilutive effect of the following: | ||||
Restricted stock | 155,952 | 221,866 | 216,566 | 296,031 |
Earnings Per Share, Dividends_4
Earnings Per Share, Dividends and Repurchases - Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Aug. 02, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Dividends Payable [Line Items] | |||||||
Dividends Common Stock Cash | $ 4,420 | $ 4,439 | $ 4,345 | $ 4,326 | |||
Dividend to Non-controlling unitholders | $ 2,889 | $ 2,889 | $ 2,889 | $ 2,889 | $ 5,778 | $ 5,778 | |
Common Class A | |||||||
Dividends Payable [Line Items] | |||||||
Cash dividends declared per share of Class A common stock | $ 0.23 | $ 0.23 | $ 0.23 | $ 0.23 | $ 0.46 | $ 0.46 | |
Dividends Common Stock Cash | $ 4,420 | $ 4,439 | $ 4,345 | $ 4,326 | $ 8,859 | $ 8,671 | |
Quarterly dividend | Common Class A | Subsequent Event | |||||||
Dividends Payable [Line Items] | |||||||
Cash dividends declared per share of Class A common stock | $ 0.23 |
Earnings Per Share, Dividends_5
Earnings Per Share, Dividends and Repurchases - Share Repurchases and Retirement (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2022 | Jan. 31, 2022 | |
Earnings Per Share, Dividends and Repurchases | ||||
Stock Repurchase Program, Authorized Amount | $ 100,000 | |||
Shares repurchased and retired, Shares | 487,196 | |||
Shares repurchased and retired, Value | $ 10,552 | $ 1,314 | $ 11,900 | |
Shares repurchased, average cost | $ 24.36 | |||
Share repurchase authorization, Value | $ 88,100 | $ 88,100 |
Acquisitions - ReMax Integra No
Acquisitions - ReMax Integra North America Acquisition (Details) $ in Thousands | 6 Months Ended | |
Jul. 21, 2021 USD ($) state item | Jun. 30, 2022 | |
Franchise agreements | ||
Business Acquisition [Line Items] | ||
Acquired finite-lived intangible assets, weighted average useful life | 13 years | |
Non-compete intangible asset | ||
Business Acquisition [Line Items] | ||
Acquired finite-lived intangible assets, weighted average useful life | 5 years | |
RE/MAX INTEGRA North America Region Asset Acquisition | ||
Business Acquisition [Line Items] | ||
Cash consideration | $ | $ 235,000 | |
Number of agents | 19,000 | |
Loss on purchase price of pre-existing master franchise agreements | $ | $ 40,900 | |
RE/MAX INTEGRA North America Region Asset Acquisition | Canada | ||
Business Acquisition [Line Items] | ||
Number of provinces | 5 | |
Number of agents | 12,000 | |
Percentage of goodwill | 50% | |
RE/MAX INTEGRA North America Region Asset Acquisition | U.S. | ||
Business Acquisition [Line Items] | ||
Number of states | state | 9 | |
Number of agents | 7,000 | |
Percentage of goodwill | 0% |
Acquisitions - ReMax Integra _2
Acquisitions - ReMax Integra North America Acquisition Purchase Price Allocation (Details) - USD ($) $ in Thousands | Jul. 21, 2021 | Jun. 30, 2022 | Dec. 31, 2021 |
Purchase Price Allocation | |||
Goodwill | $ 268,054 | $ 269,115 | |
RE/MAX INTEGRA North America Region Asset Acquisition | |||
Purchase Price Allocation | |||
Cash and cash equivalents and restricted cash | $ 14,098 | ||
Accounts and notes receivable, net | 6,610 | ||
Income taxes receivable | 494 | ||
Other current assets | 502 | ||
Property and equipment | 63 | ||
Other assets, net of current portion | 2,174 | ||
Goodwill | 108,606 | ||
Accounts payable | (3,461) | ||
Accrued liabilities | (14,045) | ||
Income taxes payable | (3,107) | ||
Deferred revenue | (824) | ||
Deferred tax liabilities, net | (16,260) | ||
Other liabilities, net of current portion | (2,200) | ||
Total purchase price allocated to assets and liabilities | 194,100 | ||
Loss on contract settlement | 40,900 | ||
Total consideration | 235,000 | ||
RE/MAX INTEGRA North America Region Asset Acquisition | Franchise agreements | |||
Purchase Price Allocation | |||
Other intangible assets, net | 92,250 | ||
RE/MAX INTEGRA North America Region Asset Acquisition | Other Intangible Assets | |||
Purchase Price Allocation | |||
Other intangible assets, net | $ 9,200 |
Acquisitions - Unaudited Pro Fo
Acquisitions - Unaudited Pro Forma (Details) - RE/MAX INTEGRA North America Region Asset Acquisition - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Pro Forma Information | ||||
Total revenue | $ 92,172 | $ 89,296 | $ 183,176 | $ 173,517 |
Net income (loss) attributable to RE/MAX Holdings, Inc. | $ 5,829 | $ 4,262 | $ 7,280 | $ 5,734 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Components of Company's Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Finite Lived Intangible Assets [Line Items] | |||||
Net Balance | $ 131,983 | $ 131,983 | $ 143,832 | ||
Amortization expense | 8,500 | $ 6,400 | 16,800 | $ 12,700 | |
Franchise agreements | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Initial Cost | 267,088 | 267,088 | 267,770 | ||
Accumulated Amortization | (135,105) | (135,105) | (123,938) | ||
Net Balance | 131,983 | $ 131,983 | 143,832 | ||
Franchise agreements | Weighted Average | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 12 years 8 months 12 days | ||||
Other Intangible Assets | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Initial Cost | 66,956 | $ 66,956 | 70,894 | ||
Accumulated Amortization | (34,569) | (34,569) | (38,364) | ||
Net Balance | 32,387 | $ 32,387 | 32,530 | ||
Other Intangible Assets | Weighted Average | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 4 years 3 months 18 days | ||||
Software | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Initial Cost | 48,176 | $ 48,176 | 51,368 | ||
Accumulated Amortization | (27,335) | (27,335) | (29,682) | ||
Net Balance | 20,841 | $ 20,841 | 21,686 | ||
Software | Weighted Average | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 4 years | ||||
Software Development | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Capitalized software development costs | 4,700 | $ 4,700 | 1,900 | ||
Trademarks | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Initial Cost | 2,361 | 2,361 | 2,356 | ||
Accumulated Amortization | (1,708) | (1,708) | (1,533) | ||
Net Balance | 653 | $ 653 | 823 | ||
Trademarks | Weighted Average | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 8 years 3 months 18 days | ||||
Non-compete agreements | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Initial Cost | 13,149 | $ 13,149 | 13,100 | ||
Accumulated Amortization | (3,332) | (3,332) | (4,563) | ||
Net Balance | 9,817 | $ 9,817 | 8,537 | ||
Non-compete agreements | Weighted Average | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 4 years 3 months 18 days | ||||
Training materials | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Initial Cost | 2,400 | $ 2,400 | 2,400 | ||
Accumulated Amortization | (1,840) | (1,840) | (1,600) | ||
Net Balance | 560 | $ 560 | 800 | ||
Training materials | Weighted Average | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 5 years | ||||
Other.. | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Initial Cost | 870 | $ 870 | 1,670 | ||
Accumulated Amortization | (354) | (354) | (986) | ||
Net Balance | $ 516 | $ 516 | $ 684 | ||
Other.. | Weighted Average | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 6 years 7 months 6 days |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Estimated Future Amortization of Intangible Assets, Other Than Goodwill (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |
Remainder of 2022 | $ 15,631 |
2023 | 30,878 |
2024 | 25,591 |
2025 | 20,640 |
2026 | 14,606 |
Thereafter | 57,024 |
Estimated future amortization expense | $ 164,370 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Schedule of Changes in Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Changes to goodwill | |
Beginning Balance | $ 269,115 |
Purchase price adjustments | (332) |
Effect of changes in foreign currency exchange rates | (729) |
Ending Balance | 268,054 |
Real Estate | |
Changes to goodwill | |
Beginning Balance | 250,482 |
Purchase price adjustments | (332) |
Effect of changes in foreign currency exchange rates | (729) |
Ending Balance | 249,421 |
Mortgage | |
Changes to goodwill | |
Beginning Balance | 18,633 |
Ending Balance | $ 18,633 |
Accrued Liabilities - Schedule
Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Accrued Liabilities. | ||
Marketing Funds | $ 57,267 | $ 61,997 |
Accrued payroll and related employee costs | 10,196 | 22,634 |
Accrued taxes | 1,053 | 2,053 |
Accrued professional fees | 3,254 | 3,660 |
Other | 5,117 | 6,424 |
Accrued liabilities | $ 76,887 | $ 96,768 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Debt instrument carrying value | $ 455,400 | |
Less unamortized debt issuance costs | (3,852) | $ (4,168) |
Less unamortized debt discount costs | (1,362) | (1,473) |
Less current portion | (4,600) | (4,600) |
Debt, net of current portion | 445,586 | 447,459 |
Senior Secured Credit Facility Refinancing | ||
Debt Instrument [Line Items] | ||
Debt instrument carrying value | $ 455,400 | $ 457,700 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Debt (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Debt | |
Remainder of 2022 | $ 2,300 |
2023 | 4,600 |
2024 | 4,600 |
2025 | 4,600 |
2026 | 4,600 |
Thereafter | 434,700 |
Long term debt | $ 455,400 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jul. 21, 2021 | Jun. 30, 2022 | |
Senior Secured Credit Facility Refinancing | Federal Reserve Bank of New York | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.50% | |
Senior Secured Credit Facility Refinancing | London Interbank Offered Rate (LIBOR) | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.50% | |
Senior Secured Credit Facility Refinancing | London Interbank Offered Rate (LIBOR) | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.50% | |
Term loan | Senior Secured Credit Facility Refinancing | ||
Debt Instrument [Line Items] | ||
Credit facility, borrowing capacity | $ 460 | |
Mandatory principal payments | $ 1.2 | |
Loan term | 7 years | |
Debt instrument, interest rate | 4.20% | |
Frequency of payments | quarter | |
Revolving loan facility | ||
Debt Instrument [Line Items] | ||
Amounts drawn on line of credit | $ 0 | |
Revolving loan facility | Senior Secured Credit Facility Refinancing | ||
Debt Instrument [Line Items] | ||
Credit facility, borrowing capacity | $ 50 | |
Revolving loan facility commitment fee on average daily amount of unused portion | 0.50% | |
ABR loans | Senior Secured Credit Facility Refinancing | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.50% | |
ABR loans | Senior Secured Credit Facility Refinancing | Eurodollar | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1% |
Fair Value Measurements - Compa
Fair Value Measurements - Company's liabilities measured at fair value on a recurring basis (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 USD ($) item | Dec. 31, 2021 USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Percentage of gross revenues to be paid yearly | 8% | |
Change in franchise sales - percentage | 10% | |
Annual payment period | 120 days | |
Change in discount rate | 1% | |
Measured on a recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liability | $ 7,655 | $ 5,780 |
Level 3 | Measured on a recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liability | 7,655 | 5,780 |
Motto | Measured on a recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liability | 6,500 | 4,530 |
Motto | Level 3 | Measured on a recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liability | 6,500 | 4,530 |
Gadberry | Measured on a recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liability | 1,155 | 1,250 |
Gadberry | Level 3 | Measured on a recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liability | 1,155 | $ 1,250 |
10% change in franchise sales | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
New billings | 300 | |
One Percent Change To Discount Rate [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
New billings | $ 200 | |
Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assumed number of franchises sold annually | item | 80 | |
Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assumed number of franchises sold annually | item | 160 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of the contingent consideration (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value adjustments | $ 1,710 | $ 290 | $ 1,995 | $ 10 |
Cash payments | (120) | |||
Measured on a recurring basis | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Balance at Beginning | 5,780 | |||
Balance at Ending | 7,655 | 7,655 | ||
Level 3 | Measured on a recurring basis | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Balance at Beginning | 5,780 | |||
Fair value adjustments | 1,995 | |||
Cash payments | (120) | |||
Balance at Ending | $ 7,655 | $ 7,655 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Senior Secured Credit Facility (Details) - Senior Secured Credit Facility Refinancing - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Carrying amounts | ||
Debt Instrument [Line Items] | ||
Long term debt, carrying amount | $ 450,186 | $ 452,059 |
Level 2 | Estimated fair value | ||
Debt Instrument [Line Items] | ||
Long term debt, fair value | $ 407,583 | $ 454,267 |
Income Taxes - Uncertain tax po
Income Taxes - Uncertain tax position liabilities (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance, January 1 | $ 1,587 | $ 5,300 |
Increases related to prior period tax positions | 0 | 96 |
Decrease related to prior year tax positions | 0 | (815) |
Increase related to tax positions from acquired companies | 309 | 0 |
Settlements | 0 | (3,776) |
Foreign currency transaction (gains) losses | 0 | 380 |
Balance, June 30 | $ 1,896 | $ 1,185 |
Equity-Based Compensation - 201
Equity-Based Compensation - 2013 Omnibus Incentive Plan (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) employee | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | |
Employee stock-based compensation expense | |||||
Equity-based compensation expense | $ 4,535 | $ 6,253 | $ 10,172 | $ 18,307 | |
Time-based awards | |||||
Employee stock-based compensation expense | |||||
Equity-based compensation expense | 3,844 | 3,744 | 7,692 | 13,565 | |
Accelerated expense | $ 5,500 | ||||
Number of employees departed | employee | 2 | ||||
Performance-based awards | |||||
Employee stock-based compensation expense | |||||
Equity-based compensation expense | 188 | 871 | 278 | 1,667 | |
Bonus settled in shares | |||||
Employee stock-based compensation expense | |||||
Equity-based compensation expense | $ 503 | $ 1,638 | $ 2,202 | $ 3,075 |
Equity-Based Compensation - Tim
Equity-Based Compensation - Time-Based Restricted Stock (Details) - Time-based awards $ / shares in Units, $ in Millions | 6 Months Ended |
Jun. 30, 2022 USD ($) $ / shares shares | |
Restricted Stock Units | |
Nonvested at beginning of period | shares | 765,813 |
Granted | shares | 386,926 |
Shares vested (including tax withholding) | shares | (302,309) |
Forfeited | shares | (70,181) |
Nonvested at end of period | shares | 780,249 |
Nonvested at beginning of period, Weighted average grant date fair value per share | $ / shares | $ 36.84 |
Granted, Weighted average grant date fair value per share | $ / shares | 29.25 |
Shares vested (including tax withholding) , Weighted average grant date fair value per share | $ / shares | 38.04 |
Forfeited, Weighted average grant date fair value per share | $ / shares | 34.02 |
Nonvested at end of period, Weighted average grant date fair value per share | $ / shares | $ 32.86 |
Unrecognized compensation cost | $ | $ 15.5 |
Period for recognition of RSU compensation expense | 1 year 8 months 12 days |
Equity-Based Compensation - Per
Equity-Based Compensation - Performance-based Restricted Stock (Details) - Performance-based awards $ / shares in Units, $ in Millions | 6 Months Ended |
Jun. 30, 2022 USD ($) $ / shares shares | |
Restricted Stock Units | |
Nonvested at beginning of period | shares | 241,821 |
Granted | shares | 160,863 |
Shares vested (including tax withholding) | shares | (30,893) |
Forfeited | shares | (89,529) |
Nonvested at end of period | shares | 282,262 |
Nonvested at beginning of period, Weighted average grant date fair value per share | $ / shares | $ 31.02 |
Granted, Weighted average grant date fair value per share | $ / shares | 29.86 |
Shares vested (including tax withholding) , Weighted average grant date fair value per share | $ / shares | 29.86 |
Forfeited, Weighted average grant date fair value per share | $ / shares | 31.05 |
Nonvested at end of period, Weighted average grant date fair value per share | $ / shares | $ 30.48 |
Unrecognized compensation cost | $ | $ 5 |
Period for recognition of RSU compensation expense | 1 year 8 months 12 days |
Segment Information (Details)
Segment Information (Details) | 6 Months Ended |
Jun. 30, 2022 segment | |
Segment Information | |
Number of Operating Segments | 4 |
Segment Information - Revenue (
Segment Information - Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting Information | ||||
Total revenue | $ 92,172 | $ 77,246 | $ 183,176 | $ 149,541 |
Real Estate | ||||
Segment Reporting Information | ||||
Total revenue | 65,776 | 56,291 | 130,513 | 107,445 |
Mortgage | ||||
Segment Reporting Information | ||||
Total revenue | 3,115 | 2,410 | 6,143 | 4,733 |
Marketing Funds fees | ||||
Segment Reporting Information | ||||
Total revenue | 22,909 | 18,042 | 45,760 | 36,187 |
Other. | ||||
Segment Reporting Information | ||||
Total revenue | 372 | 503 | 760 | 1,176 |
Continuing franchise fees | ||||
Segment Reporting Information | ||||
Total revenue | 34,128 | 26,955 | 67,627 | 52,329 |
Continuing franchise fees | Real Estate | ||||
Segment Reporting Information | ||||
Total revenue | 31,619 | 25,039 | 62,739 | 48,648 |
Continuing franchise fees | Mortgage | ||||
Segment Reporting Information | ||||
Total revenue | 2,509 | 1,916 | 4,888 | 3,681 |
Annual dues | ||||
Segment Reporting Information | ||||
Total revenue | 9,016 | 8,869 | 17,936 | 17,541 |
Annual dues | Real Estate | ||||
Segment Reporting Information | ||||
Total revenue | 9,016 | 8,869 | 17,936 | 17,541 |
Broker fees | ||||
Segment Reporting Information | ||||
Total revenue | 19,317 | 17,453 | 34,402 | 29,406 |
Broker fees | Real Estate | ||||
Segment Reporting Information | ||||
Total revenue | 19,317 | 17,453 | 34,402 | 29,406 |
Franchise sales and other revenue | ||||
Segment Reporting Information | ||||
Total revenue | 6,802 | 5,927 | 17,451 | 14,078 |
Franchise sales and other revenue | Real Estate | ||||
Segment Reporting Information | ||||
Total revenue | 5,824 | 4,930 | 15,436 | 11,850 |
Franchise sales and other revenue | Mortgage | ||||
Segment Reporting Information | ||||
Total revenue | $ 606 | $ 494 | $ 1,255 | $ 1,052 |
Segment Information - Reconcili
Segment Information - Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated | |||||
Adjusted EBITDA | $ 35,131 | $ 30,698 | $ 63,611 | $ 53,717 | |
Impairment charge - leased assets | $ (3,700) | (3,735) | |||
Loss on lease termination | (2,460) | (2,460) | |||
Equity-based compensation expense | (4,535) | (6,253) | (10,172) | (18,307) | |
Acquisition-related expense | (328) | (3,928) | (1,585) | (4,871) | |
Fair value adjustments to contingent consideration | (1,710) | (290) | (1,995) | (10) | |
Other | (236) | (202) | (1,035) | (50) | |
Interest income | 159 | 19 | 178 | 182 | |
Interest expense | (4,032) | (2,124) | (7,683) | (4,222) | |
Depreciation and amortization | (9,113) | (6,846) | (18,098) | (13,654) | |
Income (loss) before provision for income taxes | 12,876 | 11,074 | 17,026 | 12,785 | |
Real Estate | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated | |||||
Adjusted EBITDA | 36,331 | 31,503 | 67,010 | 55,782 | |
Mortgage | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated | |||||
Adjusted EBITDA | (1,164) | (733) | (3,337) | (1,883) | |
Other. | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated | |||||
Adjusted EBITDA | $ (36) | $ (72) | $ (62) | $ (182) |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - Scenario, Plan - Agreement with InsideRE, LLC - USD ($) $ in Millions | 3 Months Ended | |
Jul. 05, 2022 | Sep. 30, 2022 | |
Subsequent Event [Line Items] | ||
Percentage of change in overall workforce | 17% | |
Minimum | ||
Subsequent Event [Line Items] | ||
Severance and related costs | $ 5.8 | |
Maximum | ||
Subsequent Event [Line Items] | ||
Severance and related costs | $ 6.8 |