RE/MAX reported a modest increase in revenue but a sharp drop in net income for the final three months of 2020. The company benefited from the surge in home sales that followed pandemic lockdown measures; it attributed the profit decline to rising broker and other personnel costs related to acquisition expenses.
RE/MAX reported $72.4 million in revenue in Q4, roughly 6 percent over the $68.2 million in the same period the year before. The quarterly revenue growth came as home prices continued to rise amid strong demand and historically low inventory.
For the year, revenue was $266 million, down from $282 million in 2019.
In a statement, CEO Adam Contos said “despite the pandemic, we delivered good organic growth, resulting in better-than-expected fourth-quarter revenue and profit.” He called the surge in home sales and price growth “a nice tailwind heading into 2021.”
Net income from October through December was $1.29 million, down 55 percent from $2.88 million in 2019. For the year, net income was $10.9 million, down from $25 million in 2019.
“Selling, operating and administrative expenses increased primarily due to higher equity-based compensation expense, discretionary bonuses, and increased personnel costs largely from acquisitions,” the company noted. It said some of those costs were offset by belt-tightening measures implemented throughout 2020.
Near the end of the third quarter, the brokerage acquired two companies: Wemlo, a 20-month-old mortgage processing startup, and Gadberry Group, a location intelligence data firm that RE/MAX has worked with since 2019.
RE/MAX agent headcount in the U.S. stood at 62,303 last year. That was about 800 fewer agents than it had in 2019. But with growth in Canada and other markets outside the U.S., global headcount increased to 137,792, from 130,889 in 2019.