Even as the housing market faced the dual challenges of continued home price appreciation and rising mortgage rates, RE/MAX Holdings managed to turn out a strong second quarter, recording $92.2 million in revenue, up 19.3% from a year ago.
The firm attributed this growth to its acquisition of RE/MAX INTEGRA, which closed in July 2021. RE/MAX also saw growth in its net income, which rose 17% from a year prior to $5.8 million. The company reported that 1.7% of its income can be attributed to organic growth, while 15.9% can be attributed to acquisitions.
“Our strong second-quarter results demonstrate the strength and resilience of our 100% franchise model, particularly amid shifting housing market conditions,” Steve Joyce, the CEO of RE/MAX Holdings, told investors during the firm’s second-quarter earnings call Friday morning.
While firm executives were pleased with RE/MAX’s performance in the second quarter, they have they sights set on improved growth. A main focus of this initiative is continuing to increase the firm’s agent count.
During the second quarter, RE/MAX’s total agent count increased by nearly 4,000 agents to roughly 144,000 agents, however its U.S. agent count dropped 2.6% of roughly 1,600 agents in the past year.
In July, the firm announced a series of strategic initiatives, which it said are designed to “accelerate profitable growth.” One such initiative is a pilot program designed to attract teams of six or more agents. Through the program teams will have free access to expanded education and technology specifically designed for teams.
“I am proud to announce we are taking our best-in-class value proposition to the next level with the introduction of this carefully curated teams-focused initiative,” Nick Bailey, the president and CEO of RE/MAX, LLC., said at the time of the announcement. “We have upped our game through this compelling offering of education, technology and attractive economics which can help mid-to-large-sized teams optimize their productivity and maximize their earnings.”
To provide those technology solutions, RE/MAX has partnered with Inside Real Estate to provide agents with its kvCORE platform, which Bailey said will help agents “automate every aspect of their business from contact management to marketing to data analysis.”
The decision to partner with kvCORE ultimately lead to the shutdown of the firm’s Booj platform, which it developed in-house. This shutdown resulted in a previously announced 17% reduction in RE/MAX’s employee count. On the call, RE/MAX told investors that it plans to completely shut down the Booj platform by mid-2023.
As it has become clear through the success Compass’s agent platform, technological offerings are a major draw for many agents. Like Compass, RE/MAX hopes that its partnership with kvCORE will help eliminate the major pain point of having to work across multiple platforms with multiple logins.
“We were relying on a number of different APIs between Booj, Megaphone and some of our other offerings to work together, where I think the power of this platform is, is it is all designed around lead generation, conversion and automation in an ecosystem of being a single platform with the different components,” Bailey told investors.
Looking ahead, executives remained optimistic about the firm’s growth initiatives, despite the uncertain housing market conditions.
“Our franchise model is built to succeed in virtually every market condition,” Joyce said. “Through institutional focus, accountability and proper allocation of resources, we believe we have what it takes to grow profitably over the long term.”