RE/MAX Holdings, Inc. Class A

Good morning, and welcome to the REMAX Holdings Fourth Quarter 2022 Earnings Conference Call and Webcast. My name is Zadra, and I will be facilitating the audio portion of today's call. At this time, I would like to turn the call over to Andy Schultz, Senior Vice President of Investor Relations. Mr. Schultz?

Thank you, Operator. Good morning, everyone, and welcome to REMAX Holdings Fourth Quarter and Full Year 2022 Earnings Conference Call. please visit the investor relations section of www.remaxholdings.com for all earnings-related materials and to access the live webcast and the replay of the call today. If you are participating through the webcast, please note that you will need to advance the slides as we move through the presentation. Turning to slide two, our prepared remarks and answers to your questions on today's call may contain forward-looking statements. Forward-looking statements include those related to agent count, franchise sales, financial measures and outlook, brand expansion, competition, technology, housing and mortgage market conditions, capital allocation, dividends, share repurchases, strategic and operational plans, and business models. Forward-looking statements represent management's current estimates. RE-MAX Holdings assumes no obligation to update any forward-looking statements in the future. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ maturely from those projected in forward-looking statements. These are discussed in our fourth quarter 2022 financial results press release and other SEC filings. Also, we will refer to certain non-GAAP measures on today's call. Please see the definitions and reconciliations of non-GAAP measures contained in our most recent quarterly financial results press release, which is available on our website. Joining me on our call today are Steve Joyce, our Chief Executive Officer, Kerry Callahan, our Chief Financial Officer, and the presidents and CEOs of our brands, Nick Bailey and Ward Morrison. With that, I'd like to turn the call over to RE-MAX Holdings CEO, Steve Joyce. Steve?

Thank you, Andy, and thanks to everyone for joining our call today. Looking at slide three, our business showed great resilience during the fourth quarter while facing the strongest industry headwinds we've seen in more than a decade. The strength of our diversified franchise model is on full display during this period of market contraction. On a year-over-year basis, our Q4 revenue fell by under 10%, a relatively small amount in the face of a nearly 35% decline in U.S. existing home sales. Some of our notable quarterly highlights included REMAX Holdings Total Revenue, was $81.3 million, down only 8.9% compared to last year, as our recurring revenue model and growing mortgage business helped counterbalance the impact from the softening housing markets in both the U.S. and Canada. We generated an adjusted EBITDA of $26.5 million, and our adjusted EBITDA margin was a healthy 32.7%. Our adjusted EPS was $0.41. We modestly accelerated our stock buyback program and repurchased more than a half a million shares during the quarter. Overall, REMAX agent count grew by over 2,000 agents to 144,000 agents worldwide. And our model mortgage presence continued to grow as we added to our open office count during the quarter. The rapid decline in housing market activity during Q4 was highly unusual. And although we expect headwinds to persist, we also see cause for optimism as we enter the spring selling season. One thing the company has learned over the past five decades is the importance of distinguishing between what we can and cannot control. We cannot control the macroeconomic swings that impact the industry, but we can prepare for them and control our reaction to them. And right now, Our 50 years of experience, highlighted by five decades of consecutive growth, is telling us to stay focused on supporting our two networks with the tools, technology, and training they need to thrive in any environment. We continue to reinvest in our brands and execute on our strategic growth initiatives, positioning us for profitable growth in the future.