Re/Max Holdings Inc Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ryan McKeveny - Zelman & Associates - Analyst : So first one on the MAX/Tech Lead Concierge, really interesting to think through the potential there. I know it's early days, but I guess anything you could share about how we should think about the potential economics of those deals, how that gets split up between kind of agents, franchise owners and corporate? And similarly, on the cost side and kind of the infrastructure needed to vet those leads, is that done via your partnerships? Is that done internally? And just thoughts around kind of investment needed or costs that may or may not be needed to kind of get this rolled out and scaled.

Question: Ryan McKeveny - Zelman & Associates - Analyst : Yeah, that's very helpful. And Erik and Karri, maybe on the cost side of things. So within the release, I think it's pretty obvious you mentioned driving operational efficiency, business optimization and just financially I think at least for the last couple of quarters, the SO&A expense has been better than we've expected at least. So maybe you could talk a little about the focus on the cost side of things, driving efficiencies. Like is the low-hanging fruit already taken care of? How do you think about the cost structure moving forward and into '25 through this lens of still having a growth mindset, but is there also further progress you can make on the efficiencies and kind of keeping costs contained?

Question: John Campbell - Stephens Inc. - Analyst : I wanted to start on just the pace of RE/MAX franchise sales, whether you guys feel like there's an inflection point back to growth at some point on the horizon? And then just kind of related to that, just some broad color on how impactful the franchise growth has been to just overall agent count growth in prior years.

Question: John Campbell - Stephens Inc. - Analyst : Okay. That's great color. And just as an add-on to that, the independent conversions, is that -- does that land in the actual RE/MAX franchise sales?

Question: John Campbell - Stephens Inc. - Analyst : Got it. And then just one more on -- back to your focus on Lead Concierge and then obviously dot com and then kind of how that relates to your stance on CCP. It seems like, obviously, your other kind of scaled competitors have been a lot more vocal in the market, and they've been taking, obviously, the other side of the CCP debate. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 01, 2024 / 12:30PM, RMAX.N - Q3 2024 Re/Max Holdings Inc Earnings Call I think like you guys, I would think they would probably benefit from elimination of CCP. I just wanted to revisit your stance, how convicted you are and maybe a little bit more color on why you wouldn't line up with your scaled competitors on this one?

Question: Anthony Paolone - JPMorgan Chase & Co - Analyst : Maybe for Amy, since it sounds like you're out in the field. Can you give us any early data on what's been happening to buy-side commissions and also a sense as to what RE/MAX is doing top of the house down to the agents to kind of help them with that initial relationship and agreement?

Question: Anthony Paolone - JPMorgan Chase & Co - Analyst : Yeah. Got it. And then maybe for Karri, can you talk about just what's happening with franchisee credit? It seemed to be okay in the quarter, but just kind of where that stands. And also as it relates, I think, to Motto because it seemed like the opens went down a little bit again.

Question: Tommy McJoynt - Keefe, Bruyette, & Woods, Inc - Analyst : I just want to clarify on the expense side, Karri. Was there anything sort of temporary or onetime in this quarter that lowered the expenses?

Question: Tommy McJoynt - Keefe, Bruyette, & Woods, Inc - Analyst : Okay, got it. And then just second question, can you remind me of the typical seasonality that you expect with the US and Canada agent counts just over the next couple of quarters? Remind me like into the spring selling season, what usually happens with those agent counts?

Question: Ronald Kamdem - Morgan Stanley & Co LLC. - Analyst : Just a couple of quick ones. So I noticed -- I don't think I saw the October operating statistics that you usually provide. I don't know if that was intentional or if there's sort of any sort of update or data you could share on the agent count model franchises for October? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 01, 2024 / 12:30PM, RMAX.N - Q3 2024 Re/Max Holdings Inc Earnings Call

Question: Ronald Kamdem - Morgan Stanley & Co LLC. - Analyst : Okay, great. And then my second one was just on the agent count, obviously, very strong international continues to be a little sort of soft in the US and Canada. I would just love a little bit -- if we could just double-click on that. When you're thinking about sort of the US and Canada is there any sort of obvious trends in terms of the agents that are leaving? Is it all just individuals? Is it like very unproductive? And do you have a sense of how much more of that to go? And then the other side of that coin is what's driving the international? Is it market share gains? Is it just a lot of traction? Curious on that as well.