RE/MAX's Organic Revenue Decline Deepens for a Second Quarter
RE/MAX reported $68.5 million in second-quarter revenue while merger costs added to pressure from fee changes and fewer U.S. agents.
Real estate and mortgage brokerage franchisor RE/MAX Holdings, Inc. (RMAX) reported a second successive widening of its organic revenue decline, extending the deterioration that followed the end of 2025. Organic revenue fell 5.1% year over year in the second quarter, following declines of 4.7% in the first quarter and 0.4% in the fourth quarter of 2025. The weakening continued while its acquisition by The Real Brokerage remained pending.
Revenue excluding Marketing Funds was $51.7 million. The organic decline stemmed mainly from changes in standard fee models, including the Aspire and Ascend programs, fewer U.S. agents, and lower Mortgage segment revenue. Foreign currency movements had no effect on the quarter's revenue change, leaving the decline in revenue excluding Marketing Funds entirely organic.
The pressure was concentrated in the recurring franchise fees and annual dues that formed most of that revenue base. Those streams fell 9.9% and accounted for 63.9% of revenue excluding Marketing Funds. Broker fees provided a partial offset, reaching $14.1 million. Higher average transactions per agent and higher average U.S. home sale prices primarily drove the increase in broker fees.
The agent network also showed a slower pace of expansion. Total agent count increased 1.5% year over year to 149,267 at June 30, following 2.1% growth at March 31. The global increase coexisted with continued contraction in the United States, where agent losses contributed to both the revenue and Adjusted EBITDA declines.
The U.S. network ended June with 47,170 agents, Canada had 25,798, and markets outside those two countries had 76,299. Combined U.S. and Canadian agent count fell 2.2%. The regional composition left the international network larger than the combined U.S. and Canadian network, even as weaker revenue continued to stem partly from its U.S. business.
The adjusted profit decline eased despite the deeper organic revenue contraction. Adjusted EBITDA fell 12.6% to $22.9 million, following a 19.3% decline in the first quarter. The second-quarter adjusted EBITDA margin was 33.5%. Lower revenue associated with fee-model changes and fewer U.S. agents, together with higher technology investment, contributed to the earnings decline; increased broker fees partly offset those pressures.
Merger expenses added a separate burden to reported earnings. RE/MAX recorded $11.5 million of transaction costs in the quarter, and total operating expenses reached $67.0 million. Net income attributable to RE/MAX swung from a $4.7 million profit a year earlier to a $4.3 million loss. Merger transaction costs were excluded from the company's adjusted EBITDA calculation.
Selling, operating and administrative expenses were $32.9 million. Lower personnel expenses reduced that spending, partially offset by increased investment in technology and its flagship websites. Those reductions also partly offset merger costs in total operating expenses. At June 30, RE/MAX had $112.4 million in cash and cash equivalents and $435.0 million of outstanding debt, net of unamortized discounts and issuance costs.
The acquisition agreement, signed April 26, provided for Real to acquire RE/MAX and form Real REMAX Group Inc. RE/MAX shareholders were given the right to elect cash of $13.80 a share or shares in the combined company, subject to proration. The agreement set aggregate cash proceeds for RE/MAX shareholders at no less than $60 million and no more than $80 million.
The transaction is expected to close in the second half of 2026, subject to customary conditions, including shareholder approvals at both companies' special meetings scheduled for August 14. RE/MAX does not intend to provide quarterly or annual guidance while the transaction is pending and does not expect to hold future quarterly earnings calls.
Stronger demand supports expansion as pricing diverges