RE/MAX Holdings, Inc. Class A

Good morning, and welcome to the RE-MAX Holdings Second Quarter 2025 Earnings Conference Call and Webcast. My name is Tiffany, and I will be facilitating the audio portion of today's call. At this time, I would like to turn the call over to Joe Schwartz, Senior Vice President of Finance. Mr. Schwartz?

Thank you, Operator. Good morning, everyone, and welcome to RE-MAX Holdings Second Quarter 2025 Earnings Conference Call. please visit the investor relations section of www.remaxholdings.com for all earnings-related materials, including our standard earnings presentation and to access the live webcast and the replay of the call today. 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 and open offices, financial measures and outlook, brand expansion, competition, technology, housing and mortgage market conditions, capital allocation, credit facility, dividends, share repurchases, litigation settlements, 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 materially from those projected in forward-looking statements. These are discussed in our second quarter 2025 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 Eric Carlson, our Chief Executive Officer, and Kerry Callahan, our Chief Financial Officer. With that, I'd like to turn the call over to them.

Eric? Thank you, Joe, and thanks to everyone for joining us this morning. We're entering the second half of 2025 with solid momentum. We ended Q2 with over 147,000 agents in our global network, an all-time high. We saw signs of stabilization in our U.S. agent count, and our profit and margin performance exceeded expectations once again. Our entire team remains focused on the customer experience and operational excellence. Despite the sluggish housing and macro backdrop, our business model continues to support solid top-line performance. While U.S. existing home sales have been slow to recover, we've seen some green shoots in the form of rising inventory levels and new listings. The June RE-MAX National Housing Report showed inventory levels up 30% versus June of 2024, while new listings grew year-over-year for the 16th straight month. However, uncertainty around tariffs, inflation, and consumer confidence, coupled with affordability challenges, including persistently high mortgage rates, have caused us to temper our expectations around a potential housing rebound in the latter half of the year. For now, we remain laser-focused, focused on the things we can control, and our Q2 results are a testament to our efforts and to the resilience of our network and team. Within the industry, the National Association of Realtors' clear cooperation policy continues to be a topic of debate, and our stance remains unchanged. We're focused on driving positive outcomes for consumers, and we continue to believe that promoting listings to the broadest audience serves the best interest of buyers and sellers. Our ongoing pursuit to deliver the best experience to consumers, as well as to REMAX agents and franchisees, has fueled countless competitive advantages. It's why we have the most trusted real estate agents in the U.S. and Canada. We also have the most productive network in the world, as evidenced by the results in the 2025 Real Trends Verified Rankings, one of the industry's top independent surveys. For the 17th straight year, REMAX agents at large brokerages outperformed their competitors by a margin of more than two to one. This significant advantage in the U.S. per agent productivity represents a clear differentiator benefiting all RE-MAX affiliates in multiple ways. Another major advantage is the scale of our unmatched global footprint. Our worldwide agent count hit a record high as of June 30th, and the second quarter marked our best U.S. agent count performance since Q2 of 2022. As we shared on our last earnings call, April was our strongest month for U.S. agent count in three years and that momentum continued in May and June. Our continued focus on enhancing our value proposition is driving strong demand for the RE-MAX brand and we're seeing early signs of U.S. agent count stabilization. Now this demand is showing up in our CM&A efforts as well and we've closed several deals this year and are increasingly excited about the pipeline our new leaders are building. And as we just announced this morning, I would like to welcome Remax Hawaii to our team. We are thrilled about this conversion that will soon add over 170 highly productive and professional agents to our network. This strategic move strengthens our market share in Hawaii as a strong and well-regarded operator to our system and reinforces that influential brokers continue to see real value in what we're building at Remax. We're leaning in, investing in tools, technology, new programs, products, and talent to empower our agents to win more listings, save time, and build more profitable businesses for themselves, which in turn fuels brokerage profitability. As I mentioned earlier, we're making many bold moves to elevate and to expand our value proposition. Last quarter, for instance, we introduced Aspire, our innovative onboarding program designed to attract and develop the next generation of REMAX agents. As a reminder, Aspire combines world-class education, our advanced technology platform, and a unique financial model that gives newer agents time to build a book of business. We're excited by the network's reception to Aspire. Nearly 60% of our brokerages in the US and Canada have already signed up, and hundreds of agents are enjoying the benefits. Aspire launched in April, and May and June were the first two months of 2025 with a higher U.S. recruitment rate than the same period in 2024. This trend should continue as Aspire becomes even more integrated into the DNA of our network. Several other benefits of affiliation are also adding to our momentum. Our lead concierge program is continuing to build and contribute to the top line by connecting consumers with agents and converting carried leads into sales. we recently launched our new AI-powered global referral system, a powerful real-time data platform that simplifies and scales the exchange of referrals across our unmatched global footprint of over 110 countries and territories. These new innovations are strategically tapping into the power of the RE-MAX community. After all, the network effect works best at scale, and no one does scale like RE-MAX. In addition, our RE-MAX Media Network is also beginning to contribute to the top line. While we remain confident in its long-term monetization opportunity, the launch has been slower than anticipated, in part due to the challenging macro environment that also has impacted advertising spend. Nonetheless, infrastructure is in place with partners starting to come on board who are seeing the power of our brand and the value of our digital assets. Now, on the mortgage side, the environment remains challenging. but our resilient operators continue to navigate it successfully. We're supporting them with new tools, including a recently launched pricing engine within our loan brokerage system. It's designed to boost productivity and help originators find the best loan options for consumers. We've made great progress in the search for the next leader of our mortgage business, and we'll make an announcement in the coming weeks. Mortgage continues to be an important component of our growth story, and we expect our next leader will help us continue to grow Motto and Wimlow while exploring additional avenues to grow our mortgage opportunity. As we look ahead, our focus remains clear. Continue to grow the global RE-MAX agent network, especially in the U.S. and Canada, further enhance our value proposition, and execute with the excellence across our brands. With the right people, platforms, and programs in place, we're on the right path, and we're very optimistic about our future. Now I'll turn it over to Carrie.