RE/MAX Holdings, Inc. (RMAX) - Q1 2026 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended March 31, 2026. RE/MAX Holdings, Inc. operates as a global franchisor of real estate brokerages (RE/MAX) and U.S. mortgage brokerages (Motto Mortgage). The company maintains a low fixed-cost structure through its 100% franchised model. As of May 1, 2026, there were 21,232,815 shares of Class A common stock outstanding.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenue | $70.2 million | $74.5 million |
| Net Loss (GAAP) | ($15.7) million | ($3.2) million |
| Net Loss Attributable to RMAX | ($9.7) million | ($2.0) million |
| Adjusted EBITDA | $15.6 million | $19.3 million |
| Adjusted EBITDA Margin | 22.2% | 25.9% |
| Cash and Cash Equivalents | $107.1 million | $118.7 million (Dec 2025) |
| Total Debt (Outstanding) | $438.2 million | $439.3 million (Dec 2025) |
| Operating Cash Flow | ($1.8) million | $5.7 million |
Material Changes vs. Prior Period
- Revenue Decline: Total revenue decreased 5.7% year-over-year. Revenue excluding Marketing Funds dropped 4.0%, driven by negative organic growth of 4.7% and a reduction in the U.S. agent count.
- Settlement Charges: Operating expenses increased significantly due to an $8.5 million charge for the "Batton Settlement" (antitrust litigation), compared to $0.6 million in the prior year.
- Agent Count: Total global agent count increased 2.1% to 149,192. However, the U.S. agent count declined 4.8% to 47,443, while international agents outside the U.S. and Canada grew 6.7%.
- Motto Mortgage Contraction: Open Motto Mortgage offices decreased 29.9% to 157, reflecting a strategic decision to terminate underperforming franchisees.
- Fee Model Shifts: Continuing franchise fees decreased 12.1% due to new variable fee models (Aspire, Ascend), partially offset by a 10.3% increase in Broker fees.
Guidance, Outlook, and Material Events
- Pending Merger: On April 26, 2026, the Company entered into a definitive agreement to merge with The Real Brokerage Inc. (Real). The combined entity, Real REMAX Group, is expected to list on Nasdaq under ticker "REAX." The transaction is expected to close in the second half of 2026.
- Merger Consideration: Shareholders may elect to receive 5.15 shares of the new company (subject to a 10-for-1 consolidation) or $13.80 in cash, subject to proration.
- Restructuring of UP-C: Concurrent with the merger, the Company will collapse its UP-C structure via a merger with RIHI, Inc., terminating the Tax Receivable Agreement (TRA) with no further payments due.
- Liquidity and Debt: The Company has a Total Leverage Ratio (TLR) of 3.63:1 as of March 31, 2026. The Senior Secured Credit Facility includes a $460 million term loan maturing in 2028 and a $50 million revolver. No amounts were drawn on the revolver.
- Dividends and Buybacks: The quarterly dividend remains suspended. No share repurchases were made in Q1 2026; $62.5 million remains available under the $100 million authorization.
Investor Verification Checklist
- Merger Closing Conditions: Verify the status of regulatory approvals (Hart-Scott-Rodino) and shareholder votes required to close the Real Brokerage merger.
- Antitrust Litigation Status: Confirm the final court approval of the $8.5 million Batton Settlement and the status of the 2023 U.S. Settlement appeals.
- Agent Count Trends: Monitor the divergence between international growth and U.S. agent count declines to assess the impact of new fee models on retention.
- Debt Covenants: Review the impact of the merger on the Senior Secured Credit Facility covenants and the refinancing plan for existing indebtedness.
- Non-GAAP Reconciliation: Review the reconciliation of Adjusted EBITDA to Net Loss to understand the magnitude of non-recurring charges (settlements, merger costs) impacting GAAP profitability.