10-Q: RE/MAX Holdings Announces Q1 2026 Results Amidst Merger

RE/MAX Holdings reported a net loss of $9.7 million for Q1 2026, with total revenue down 5.7% year-over-year, while progressing towards its acquisition by The Real Brokerage Inc.

Summary

• RE/MAX Holdings reported a net loss attributable to the company of $9.7 million for the first quarter of 2026, a significant increase from the $2.0 million loss in the same period of 2025.
• Total revenue for the quarter was $70.2 million, a decrease of 5.7% compared to $74.5 million in the prior year.
• Revenue excluding Marketing Funds decreased by 4.0% to $53.4 million, driven by a 4.7% decline in organic revenue, partially offset by a 0.7% positive impact from foreign currency movements.
• Adjusted EBITDA decreased by 19.3% to $15.6 million, with the Adjusted EBITDA margin declining to 22.2% from 25.9% in the prior year.
• The company's total agent count increased by 2.1% to 149,192, though U.S. and Canada combined agent count saw a decrease of 2.3% to 73,292.
• Motto open offices decreased by 29.9% to 157.
• The company announced a definitive Arrangement Agreement and Plan of Merger with The Real Brokerage Inc. (Real), expected to close in the second half of 2026.
• In connection with the merger, Real has secured committed financing of up to $550 million.
• The company incurred $2.8 million in merger-related transaction costs as of March 31, 2026.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as negative due to the increased net loss, decreased revenue, and lower Adjusted EBITDA, despite positive global agent count growth and progress on the pending merger.

Positives

• Total agent count increased by 2.1% to a record 149,192 globally.
• U.S. and Canada combined agent count showed improvement with four consecutive quarters of downward trend reversal.
• REMAX franchise sales in the U.S. and Canada increased by 77.8% to 48 sales.
• The company is progressing with its acquisition by The Real Brokerage Inc., with committed financing secured.
• The company continues to invest in technology and marketing solutions to support affiliate success.

Negatives

• Net loss attributable to RE/MAX Holdings, Inc. increased to $9.7 million from $2.0 million in the prior year.
• Total revenue decreased by 5.7% to $70.2 million.
• Revenue excluding Marketing Funds decreased by 4.0% due to a 4.7% decline in organic revenue.
• Adjusted EBITDA decreased by 19.3% to $15.6 million, and the Adjusted EBITDA margin decreased to 22.2%.
• U.S. and Canada combined agent count decreased by 2.3% to 73,292.
• Motto open offices decreased significantly by 29.9% to 157.
• The company recorded a $8.5 million settlement charge related to the Batton Action litigation.

Risks

• The pending merger with The Real Brokerage Inc. could have a material adverse effect on the business, results of operations, financial condition, and stock price if not consummated.
• The pendency of the merger may cause negative publicity, distract management, and restrict business activities.
• The company is subject to ongoing litigation, including antitrust claims in the U.S. and Canada, which could result in significant costs and liabilities.
• Challenging housing and mortgage market conditions and broader economic uncertainty continue to pressure agent counts and consolidated revenue.
• The company faces risks related to interest rate fluctuations on its variable rate debt.
• Foreign currency exchange rate fluctuations, particularly with the Canadian dollar, can impact revenue and operating income.

Future Outlook

The company is focused on navigating market softness while positioning the business for longer-term growth through initiatives to enhance its value proposition for franchisees and agents, including increased flexibility, improved recruiting, and aligning economics with transaction activity. Investments in technology and marketing solutions are ongoing. The merger with The Real Brokerage Inc. is expected to close in the second half of 2026, subject to customary closing conditions.

Management Comments

• In the first quarter of 2026, our global agent network reached a record 149,000 agents, reflecting four consecutive quarters of improvement of the downward trend in U.S. agent count performance and relatively flat activity in Canada, despite challenging housing and mortgage market conditions and broader economic uncertainty.
• Despite this operational improvement, the aforementioned macroeconomic factors continued to pressure U.S. RE/MAX agent count, Motto Mortgage office count and consolidated revenue.
• In response to these conditions, we remain focused on initiatives designed to enhance our value proposition for franchisees and agents by increasing flexibility, improving recruiting and onboarding, and aligning economics more closely with transaction activity.
• Collectively, these initiatives reflect our strategic focus on navigating market softness while positioning the business for longer-term growth.

Industry Context

StockSavvy.ai notes that RE/MAX Holdings' Q1 2026 results reflect ongoing challenges in the real estate market, including pressure on agent counts and revenue, exacerbated by macroeconomic factors. The company's strategic shift towards more flexible, variable economic models and technology investments aims to mitigate these pressures. The pending merger with The Real Brokerage Inc. represents a significant industry consolidation play, aiming to create a larger, more competitive entity in the evolving real estate landscape.

Comparison to Industry Standards

• RE/MAX Holdings' total revenue of $70.2 million for Q1 2026 is down 5.7% year-over-year, indicating a challenging market environment that may be impacting other real estate franchisors as well.
• The decrease in Motto open offices by 29.9% suggests potential consolidation or strategic pruning within the mortgage brokerage sector, a trend that could be observed across other mortgage-related businesses.
• The company's focus on agent count growth (2.1% increase globally) is a key metric in the real estate industry, where network size directly correlates with market presence and revenue potential. Competitors like Keller Williams and Compass also prioritize agent recruitment and retention, though their models differ significantly.
• The settlement charges of $8.5 million for the Batton Action and $55 million for Nationwide Claims highlight the significant legal and regulatory risks faced by major players in the real estate industry, as seen with other large brokerages and associations facing similar antitrust scrutiny.

Legal Proceedings

• U.S. Antitrust Litigation and Settlement: Class action lawsuits alleging violations of antitrust laws related to broker commissions. RE/MAX, LLC entered into a $55.0 million settlement for Nationwide Claims, with final court approval granted on May 9, 2024. Appeals were filed.
• Batton Action: A similar antitrust action alleging harm to homebuyers. RE/MAX, LLC entered into a $8.5 million settlement, with preliminary approval granted on March 31, 2026, subject to final court approval.
• Homie Technology, Inc. lawsuit: Alleging antitrust claims and tortious interference. The lawsuit was dismissed by the court on July 15, 2025, and Homie filed an appeal, with oral argument scheduled for May 12, 2026.
• Canadian Competition Act Litigation and Settlement: Class action claims alleging violations of the Canadian Competition Act. RE/MAX OA entered into a settlement agreement in April 2025, paying CAD $7.8 million (USD $5.6 million), with court approval on October 8, 2025.

Related Party Transactions

• The company's Tax Receivable Agreement (TRA) with RIHI, Inc. will terminate upon the closing of the merger, with no further payments to be made thereunder.

Stakeholder Impact

• Shareholders: The pending merger with The Real Brokerage Inc. offers a mix of cash and stock consideration, with potential for future ownership in a combined entity. However, the value of stock consideration may fluctuate, and there's a risk the merger may not be completed.
• Franchisees and Agents: The company is implementing new economic models (Aspire, Ascend, Appreciate) to lower fixed costs and shift fees towards variable structures, aiming to better support agent productivity and franchisee cash flow. The merger may lead to changes in operational strategies and brand integration.
• Employees: Uncertainty surrounding the merger may impact employee retention and morale due to potential changes in roles and the future leadership structure of the combined company.
• Creditors: The company has a Senior Secured Credit Facility of $438.2 million outstanding. The merger includes refinancing of existing indebtedness, which could impact the terms and structure of future debt.
• Customers: The merger and ongoing initiatives aim to enhance the value proposition and consumer experience in real estate transactions.

Next Steps

• The merger with The Real Brokerage Inc. is expected to close in the second half of 2026, subject to customary closing conditions, regulatory approvals, and approval by the shareholders of both companies.
• The company will continue to invest in technology and marketing solutions.
• The company will continue to focus on initiatives to enhance its value proposition for franchisees and agents.

Key Dates

Recommendation

The company's financial performance has worsened with an increased net loss and decreased revenue and Adjusted EBITDA. While the global agent count is growing and the merger with The Real Brokerage Inc. is a significant positive development, the ongoing legal challenges and market pressures warrant caution. The Hold recommendation reflects the uncertainty surrounding the merger's completion and the near-term financial headwinds, balanced against the potential long-term benefits of the combined entity.

Keywords

RE/MAX Holdings, Form 10-Q, Quarterly Report, Real Estate Franchising, Motto Mortgage, Merger, The Real Brokerage Inc., Financial Results, Adjusted EBITDA, Agent Count, Litigation, Antitrust