RE/MAX Holdings, Inc. Class A

webcast. My name is Colby, and I'll 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 and Investor Relations. Mr. Schwartz?

Thank you, Operator. Good morning, everyone, and welcome to REMAX Holdings' third 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 replay of the call today. Our prepared remarks and answers to your questions in 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 third quarter 2025 financial results press release and other SEC filings. Also, we will refer to certain non-GAAP measures in 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 Carrie 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 pleased that the momentum we've built in the first half of the year continued into the third quarter. Our total RE-MAX agent count reached another all-time high, fueled by steady global growth and our best third quarter U.S. agent count performance in three years. Based on feedback from the membership, we believe our mix of new ideas and products, along with our reinvigorated recent network events, are enhancing our value proposition and generating great energy. At the same time, our constant focus on operational excellence, again, drove profitability and margin performance that exceeded our expectations. And while existing home sales have yet to show sustained signs of recovery, our networks continue to perform resiliently. From a macro perspective, the trends we saw in our RE-MAX National Housing Report earlier in the year continued in September, as inventory increased 20% over September 2024, marking the 21st consecutive month of year-over-year growth. Additionally, new listings, which had slowed some over the summer, rebounded in September, growing 4.5% over August. We believe these sustained increases are constructive for housing and will help support increased transaction activity. However, affordability remains a challenge, particularly at the lower price points. Further downward movement in mortgage rates would be welcome news. From an industry perspective, this year has seen consolidation activity on both a large and small scale. Given existing industry dynamics, we believe the current state of change creates exciting opportunities for our company and networks. We continue to have a robust franchise sales and conversion pipeline and are building on the momentum of recent additions, including REMAX Hawaii, which catapulted REMAX to a number two market share position in the state. This momentum is bolstered by our innovations and ongoing enhancements to our value proposition, which has spurred a lot of excitement throughout our networks and the industry. I've never felt more positive about what lies ahead for our company, and we're going to continue to evaluate all opportunities to drive enhanced value for all of our stakeholders. As of September 30th, our worldwide agent count of over 147,500 agents was another record high. and U.S. agent count at its best third quarter in three years. Although we're not where we want to be, the underlying agent fundamentals are encouraging. We said last quarter that May and June were the first two months of the year where our agent recruitment rate increased year over year. This positive momentum carried into Q3, where the recruitment rate for each month of the quarter was higher than last year. Producing agents continue to be drawn to RE-MAX, and the quality of our network was reflected in the recently released 2025 RealTrends verified city rankings, where we had more agents represented than any other brand. Although Canadian agent count was down slightly year over year, we saw modest sequential growth despite a continued challenging housing backdrop. We appreciate that being a broker and an agent is difficult in this market, and historically we know that the number of producing agents in the industry tends to correlate with the level of existing home sales. We're encouraged by the results in both the U.S. and Canada, given the current state of the markets. And our international agent count continues to be a bright spot, surpassing 73,000 agents. Momentum in agent recruiting has been fueled by many of our ongoing initiatives. Our Aspire program continues to be a success, with approximately 1,500 agents benefiting from the program. Although it's still early, Aspire is performing as intended, with an uptick in the recruitment of newer agents and a higher retention rate. Building on the strong reception and feedback from the network on Aspire and leveraging our voice of customer capabilities, we've introduced the Ascend and Appreciate programs in September. These optional economic models offer greater flexibility with respect to how and when a franchisee pays us, further supporting their ability to attract and retain quality agents. While these programs are new, the feedback from the network has been very positive. In addition to providing flexibility with respect to our economic models, we continue to lean heavily into innovation to deliver an elevated experience to all of our affiliates and the consumers they serve. Many of our new offerings, like the recently launched Remax Marketing as a Service platform, leverage the strength of our scale to create new competitive advantages. The platform is a data-driven, AI-powered system that simplifies marketing for all of our affiliates. The offerings include automated listing packages, complimentary and paid campaign options, real-time analytics, and property videos created seamlessly with AI. We'll continue to add innovative products to the platform, all of which are designed to help agents save time, win more listings, and grow their business. This marketing approach is a strategic shift as we're consolidating fragmented efforts into one seamless experience. Although we're just getting started, the initial click-through rates and engagement results are very promising. We're seeing both the number of orders and users increase each week, and the current weekly order value is indicative of a low seven-figure annual run rate. Notably, we are planning to expand the platform into some international geographies outside of the U.S. and Canada, marking a tangible step to capitalize on the scale of our worldwide footprint, enhance the value proposition globally, and diversify our revenue streams. In addition, we continue to innovate on the exciting initiatives we launched last year, leveraging our digital assets. Our lead concierge program has been outperforming expectations this year, and we continue to evaluate and add new lead sources. The RE-MAX Media Network is on track with our revised expectations. We anticipate it will have a seven-digit revenue contribution by the end of 2025. We remain optimistic about the long-term potential of these initiatives. Our story is being told loudly and proudly through the voices of our franchisees and agents, both online and offline. Whether agents are leveraging our MaxEngage platform or other mediums, our momentum continues to build. Throughout our many events over the past several months, excitement and a feeling that something is different about Remax has emerged as a constant theme. And that excitement is carrying forward in our ability to recruit top industry talent to our executive team. We're thrilled to have Vic Lombardo on board as our new President of Mortgage Services. In his role, Vic will oversee the growth of our mortgage business, including model mortgage, WEMO, and future evolutions designed to grow our mortgage offerings. In Vic's first two months, he's rolled up the sleeves, dug into the operations, surfacing a number of innovative ideas to drive growth and add additional revenue streams and increase the operational efficiency. We're already putting foundational pieces in place, and we look forward to sharing more details on our strategy in February. While the mortgage market remains challenging, we've seen a modest uptick in refi volumes in the last couple months. Our franchisees and LOs continue to persevere, and we're optimistic about the growth potential for our mortgage business. In addition to Vic, Tom Plannigan, our new Chief Digital Information Officer, joined us at the end of September. Tom, a member of the 2025 Swanepoel Power 200 is a great cultural fit, and his impressive track record includes 20 years as a real estate innovator and executive in leadership roles covering both technology and marketing. Tom is leaning in to the potential of AI, both to improve the customer experience and to make us more efficient in our day-to-day operations. Not only is he an industry-leading technologist, but his experience in ancillary businesses will also be a great asset as we continue to explore future growth strategies. As we look to the future, we continue to lean in our networks and build on our momentum. We're focused on the tremendous opportunities that lie ahead for us, and with a world-class leadership team now in place, we believe we're well-positioned for growth in the current environment. We're focused on what matters, continuing to grow our REMAX agent count, especially in the U.S. and Canada, enhance and expand our value proposition, focus on improving our customer experience, grow our mortgage business, and concurrently diversify our top-line drivers as we execute with excellence across our brands. As we move into the last couple months of the year and prepare for 2026, I want to emphasize that we're in a new era, one defined by clarity, purpose, and action. With that, I'll hand it over to Carrie.