Real estate franchise company RE/MAX (NYSE: RMAX) missed Wall Street’s revenue expectations in Q3 CY2025, with sales falling 6.7% year on year to $73.25 million. On the other hand, the company expects next quarter’s revenue to be around $71.5 million, close to analysts’ estimates. Its non-GAAP profit of $0.37 per share was in line with analysts’ consensus estimates.

Is now the time to buy RMAX? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

RE/MAX’s third quarter was met with a negative market reaction, as the company’s revenue missed Wall Street’s expectations. Management cited persistent weakness in existing home sales and affordability challenges as primary factors weighing on results. Despite these headwinds, CEO Erik Carlson pointed to a record-high global agent count and called out recent agent recruitment momentum, especially in the U.S., as signs of underlying strength. Management credited operational efficiencies and disciplined cost controls for margin improvement, but acknowledged that near-term growth remains constrained by macroeconomic uncertainties.

Looking ahead, management’s guidance is shaped by cautious optimism, with a focus on expanding new agent programs and scaling digital platforms to diversify revenue. Initiatives like the AI-driven Marketing as a Service platform and flexible economic models for agents are expected to drive incremental growth. CFO Karri Callahan emphasized, “We remain pragmatic about the realities of the current housing market and continued uncertainties in the broader macro environment,” suggesting measured expectations for the coming quarters. The company’s strategy centers on increasing agent productivity while navigating ongoing housing market volatility.

Key Insights from Management’s Remarks

Management attributed the quarter’s performance to steady agent recruitment, digital platform adoption, and the launch of flexible economic models for agents, while pointing to ongoing housing market pressures as a continued headwind.

• Agent growth momentum: RE/MAX achieved a record global agent count, with notable increases in U.S. agent recruitment rates. Management highlighted that newer programs like Aspire have improved retention and contributed to this growth, despite continued softness in home sales.
• Flexible agent programs launched: The introduction of Aspire, Ascend, and Appreciate offers agents and franchisees more choice in fee structures and career flexibility. Aspire targets new agents with training and retention support, while Ascend and Appreciate cater to experienced and retiring agents, respectively.
• Digital platform expansion: The rollout of the AI-powered Marketing as a Service platform has seen strong adoption, simplifying marketing for agents and providing data-driven tools. Early engagement metrics suggest increased listing activity, and management plans to expand the platform internationally.
• Revenue diversification initiatives: Management is investing in new revenue streams such as Lead Concierge and the RE/MAX Media Network, both of which are expected to generate seven-digit annual run rates and higher margin profiles than the core business.
• Operational efficiency focus: Cost controls and process improvements helped raise operating margins. Lower personnel and event expenses offset higher investments in technology, allowing the company to convert a significant portion of EBITDA into free cash flow and reduce leverage below target levels.

Drivers of Future Performance

RE/MAX’s outlook centers on cautious revenue expectations, driven by new agent recruitment programs, digital platform monetization, and ongoing cost discipline, while macroeconomic and housing market trends remain a significant variable.

• Continued agent program expansion: Management expects that scaling Aspire, Ascend, and Appreciate will support incremental growth and retention, but highlights that onboarding new agents requires upfront investment and has a delayed impact on productivity.
• Monetization of digital tools: The company plans to leverage its AI-powered marketing platform and media initiatives internationally, diversifying revenue and providing agents with technology to boost listing engagement. Management believes these efforts will enhance top-line growth and margin profile over time.
• Housing market uncertainty: Persistent affordability issues and slow recovery in home sales present ongoing risks. Management indicated that further declines in mortgage rates would be constructive, but remains pragmatic about the pace of improvement, tightening revenue guidance accordingly.

Catalysts in Upcoming Quarters

In the next few quarters, our analysts will monitor (1) the adoption and revenue contribution of digital platforms like Marketing as a Service and Lead Concierge, (2) the pace and productivity impact of new agent recruitment under Aspire and related programs, and (3) evidence of stabilization or improvement in home sales and affordability conditions. Updates on international expansion of digital tools and progress in mortgage services will also serve as key execution milestones.

RE/MAX currently trades at $8.08, down from $8.26 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).

Now Could Be The Perfect Time To Invest In These Stocks

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.