RE/MAX HOLDINGS, INC., 10-Q filed on 11/5/2020
Quarterly Report
v3.20.2
Document and Entity Information - shares
 9 Months Ended
Sep. 30, 2020
Oct. 31, 2020
Document Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Sep. 30, 2020  
Entity File Number 001-36101  
Entity Registrant Name RE/MAX Holdings, Inc.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 80-0937145  
Entity Address Line One 5075 South Syracuse Street  
Entity Address City or Town Denver  
Entity Address State or Province CO  
Entity Address Postal Zip Code 80237  
City Area Code 303  
Local Phone Number 770-5531  
Title of 12(b) Security Class A Common Stock, $0.0001 par value per share  
Trading Symbol RMAX  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q3  
Entity Central Index Key 0001581091  
Amendment Flag false  
Common Class A    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   18,557,201
Common Class B    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   1
v3.20.2
Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Current assets:    
Cash and cash equivalents $ 89,135 $ 83,001
Restricted cash 15,635 20,600
Accounts and notes receivable, current portion, less allowances of $14,614 and $12,538, respectively 30,003 28,644
Income taxes receivable 718 896
Other current assets 12,484 9,638
Total current assets 147,975 142,779
Property and equipment, net of accumulated depreciation of $16,408 and $14,940, respectively 6,016 5,444
Operating lease right of use assets 39,937 51,129
Franchise agreements, net 76,065 87,670
Other intangible assets, net 31,424 32,315
Goodwill 176,302 159,038
Deferred tax assets, net 49,377 52,595
Income taxes receivable, net of current portion 1,690 1,690
Other assets, net of current portion 14,535 9,692
Total assets 543,321 542,352
Current liabilities:    
Accounts payable 5,727 2,983
Accrued liabilities 52,073 60,163
Income taxes payable 7,249 6,854
Deferred revenue 23,147 25,663
Current portion of debt 2,489 2,648
Current portion of payable pursuant to tax receivable agreements 6,478 3,583
Operating lease liabilities 5,553 5,102
Total current liabilities 102,716 106,996
Debt, net of current portion 221,594 223,033
Payable pursuant to tax receivable agreements, net of current portion 30,745 33,640
Deferred tax liabilities, net 1,000 293
Deferred revenue, net of current portion 17,931 18,763
Operating lease liabilities, net of current portion 51,750 55,959
Other liabilities, net of current portion 5,408 5,292
Total liabilities 431,144 443,976
Commitments and contingencies (note 12)
Stockholders' equity:    
Additional paid-in capital 485,664 466,945
Retained earnings 27,951 30,525
Accumulated other comprehensive income, net of tax 476 414
Total stockholders' equity attributable to RE/MAX Holdings, Inc. 514,093 497,886
Non-controlling interest (401,916) (399,510)
Total stockholders' equity 112,177 98,376
Total liabilities and stockholders' equity 543,321 542,352
Common Class A    
Stockholders' equity:    
Common stock 2 2
Common Class B    
Stockholders' equity:    
Common stock $ 0 $ 0
v3.20.2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Accounts and notes receivable, allowance $ 14,614 $ 12,538
Property and equipment, accumulated depreciation $ 16,408 $ 14,940
Common Class A    
Common stock, par value $ 0.0001 $ 0.0001
Common stock, shares authorized 180,000,000 180,000,000
Common stock, shares issued 18,372,134 17,838,233
Common stock, shares outstanding 18,372,134 17,838,233
Common Class B    
Common stock, par value $ 0.0001 $ 0.0001
Common stock, shares authorized 1,000 1,000
Common stock, shares issued 1 1
Common stock, shares outstanding 1 1
v3.20.2
Condensed Consolidated Statements of Income - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Revenue:        
Total revenue $ 71,073 $ 71,541 $ 193,552 $ 214,100
Operating expenses:        
Selling, operating and administrative expenses 28,216 24,468 88,241 84,081
Marketing Funds expenses 17,290 18,034 46,577 54,866
Depreciation and amortization 6,850 5,595 19,572 16,694
Impairment charge - leased assets 7,902 0 7,902 0
Total operating expenses 60,258 48,097 162,292 155,641
Operating income 10,815 23,444 31,260 58,459
Other expenses, net:        
Interest expense (2,159) (3,089) (7,028) (9,398)
Interest income 25 412 328 1,074
Foreign currency transaction gains (losses) 94 (50) (75) 66
Total other expenses, net (2,040) (2,727) (6,775) (8,258)
Income before provision for income taxes 8,775 20,717 24,485 50,201
Provision for income taxes (2,051) (3,453) (6,547) (8,547)
Net income 6,724 17,264 17,938 41,654
Less: net income attributable to non-controlling interest (note 3) 3,171 8,091 8,265 19,502
Net income attributable to RE/MAX Holdings, Inc. $ 3,553 $ 9,173 $ 9,673 $ 22,152
Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock        
Basic $ 0.20 $ 0.51 $ 0.53 $ 1.24
Diluted 0.19 0.51 0.53 1.24
Common Class A        
Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock        
Basic 0.20 0.51 0.53 1.24
Diluted $ 0.19 $ 0.51 $ 0.53 $ 1.24
Weighted average shares of Class A common stock outstanding        
Basic 18,196,454 17,826,332 18,098,227 17,803,708
Diluted 18,368,051 17,840,158 18,182,856 17,830,942
Cash dividends declared per share of Class A common stock $ 0.22 $ 0.21 $ 0.66 $ 0.63
Continuing franchise fees        
Revenue:        
Total revenue $ 24,339 $ 25,168 $ 65,220 $ 75,018
Annual dues        
Revenue:        
Total revenue 8,638 8,835 26,304 26,508
Broker fees        
Revenue:        
Total revenue 15,457 13,292 35,327 35,339
Marketing Funds fees        
Revenue:        
Total revenue 17,290 18,034 46,577 54,866
Franchise sales and other revenue        
Revenue:        
Total revenue $ 5,349 $ 6,212 $ 20,124 $ 22,369
v3.20.2
Condensed Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Condensed Consolidated Statements of Comprehensive Income        
Net income $ 6,724 $ 17,264 $ 17,938 $ 41,654
Change in cumulative translation adjustment 70 (39) (43) 95
Other comprehensive income (loss), net of tax 70 (39) (43) 95
Comprehensive income 6,794 17,225 17,895 41,749
Less: comprehensive income attributable to non-controlling interest 3,205 8,070 8,160 19,546
Comprehensive income attributable to RE/MAX Holdings, Inc., net of tax $ 3,589 $ 9,155 $ 9,735 $ 22,203
v3.20.2
Condensed Consolidated Statements of Stockholders' Equity - USD ($)
Common Stock
Common Class A
Common Stock
Common Class B
Additional paid-in capital
Retained earnings
Accumulated other comprehensive income (loss), net of tax
Non-controlling interest
Common Class A
Common Class B
Total
Beginning balance, Value at Dec. 31, 2018 $ 2,000 $ 0 $ 460,101,000 $ 21,138,000 $ 328,000 $ (402,294,000)     $ 79,275,000
Beginning balance, Shares at Dec. 31, 2018 17,754,416 1              
Net income $ 0 $ 0 0 4,409,000 0 3,848,000     8,257,000
Distributions to non-controlling unitholders 0 0 0 0 0 (2,693,000)     (2,693,000)
Equity-based compensation expense and related dividend equivalents, value $ 0 $ 0 3,213,000 (42,000) 0 0     3,171,000
Equity-based compensation expense and related dividend equivalents, shares 70,797 0              
Dividends to Class A common stockholders $ 0 $ 0 0 (3,740,000) 0 0     (3,740,000)
Change in accumulated other comprehensive income 0 0 0 0 36,000 33,000     69,000
Payroll taxes related to net settled restricted stock units, value $ 0 $ 0 (713,000) 0 0 0     (713,000)
Payroll taxes related to net settled restricted stock units, shares (17,265) 0              
Ending balance, Value at Mar. 31, 2019 $ 2,000 $ 0 462,601,000 21,765,000 364,000 (401,106,000)     83,626,000
Ending balance, Shares at Mar. 31, 2019 17,807,948 1              
Beginning balance, Value at Dec. 31, 2018 $ 2,000 $ 0 460,101,000 21,138,000 328,000 (402,294,000)     79,275,000
Beginning balance, Shares at Dec. 31, 2018 17,754,416 1              
Net income                 41,654,000
Change in accumulated other comprehensive income                 95,000
Ending balance, Value at Sep. 30, 2019 $ 2,000 $ 0 462,245,000 31,992,000 379,000 (394,208,000)     100,410,000
Ending balance, Shares at Sep. 30, 2019 17,835,719 1              
Beginning balance, Value at Mar. 31, 2019 $ 2,000 $ 0 462,601,000 21,765,000 364,000 (401,106,000)     83,626,000
Beginning balance, Shares at Mar. 31, 2019 17,807,948 1              
Net income $ 0 $ 0 0 8,570,000 0 7,563,000     16,133,000
Distributions to non-controlling unitholders 0 0 0 0 0 (4,613,000)     (4,613,000)
Equity-based compensation expense and related dividend equivalents, value $ 0 $ 0 182,000 (1,000) 0 0     181,000
Equity-based compensation expense and related dividend equivalents, shares 1,740 0              
Dividends to Class A common stockholders $ 0 $ 0 0 (3,739,000) 0 0     (3,739,000)
Change in accumulated other comprehensive income 0 0 0 0 33,000 32,000     65,000
Payroll taxes related to net settled restricted stock units, value $ 0 $ 0 (18,000) 0 0 0     (18,000)
Payroll taxes related to net settled restricted stock units, shares (569) 0              
Other $ 0 $ 0 290,000 0 0 0     290,000
Ending balance, Value at Jun. 30, 2019 $ 2,000 $ 0 463,055,000 26,595,000 397,000 (398,124,000)     91,925,000
Ending balance, Shares at Jun. 30, 2019 17,809,119 1              
Net income $ 0 $ 0 0 9,173,000 0 8,091,000     17,264,000
Distributions to non-controlling unitholders 0 0 0 0 0 (4,154,000)     (4,154,000)
Equity-based compensation expense and related dividend equivalents, value $ 0 $ 0 (888,000) (31,000) 0 0     (919,000)
Equity-based compensation expense and related dividend equivalents, shares 30,278 0              
Dividends to Class A common stockholders $ 0 $ 0 0 (3,745,000) 0 0     (3,745,000)
Change in accumulated other comprehensive income 0 0 0 0 (18,000) (21,000)     (39,000)
Payroll taxes related to net settled restricted stock units, value $ 0 $ 0 (105,000) 0 0 0     (105,000)
Payroll taxes related to net settled restricted stock units, shares (3,678) 0              
Other $ 0 $ 0 183,000 0 0 0     183,000
Ending balance, Value at Sep. 30, 2019 $ 2,000 $ 0 462,245,000 31,992,000 379,000 (394,208,000)     100,410,000
Ending balance, Shares at Sep. 30, 2019 17,835,719 1              
Beginning balance, Value at Dec. 31, 2019 $ 2,000 $ 0 466,945,000 30,525,000 414,000 (399,510,000)     98,376,000
Beginning balance, Shares at Dec. 31, 2019 17,838,233 1         17,838,233 1  
Net income $ 0 $ 0 0 2,631,000 0 2,659,000     5,290,000
Distributions to non-controlling unitholders 0 0 0 0 0 (2,777,000)     (2,777,000)
Equity-based compensation expense and related dividend equivalents, value $ 0 $ 0 5,962,000 (289,000) 0 0     5,673,000
Equity-based compensation expense and related dividend equivalents, shares 368,375 0              
Dividends to Class A common stockholders $ 0 $ 0 0 (3,986,000) 0 0     (3,986,000)
Change in accumulated other comprehensive income 0 0 0 0 (36,000) (194,000)     (230,000)
Payroll taxes related to net settled restricted stock units, value $ 0 $ 0 (2,268,000) 0 0 0     (2,268,000)
Payroll taxes related to net settled restricted stock units, shares (82,645) 0              
Ending balance, Value at Mar. 31, 2020 $ 2,000 $ 0 470,639,000 28,881,000 378,000 (399,822,000)     100,078,000
Ending balance, Shares at Mar. 31, 2020 18,123,963 1              
Beginning balance, Value at Dec. 31, 2019 $ 2,000 $ 0 466,945,000 30,525,000 414,000 (399,510,000)     98,376,000
Beginning balance, Shares at Dec. 31, 2019 17,838,233 1         17,838,233 1  
Net income                 17,938,000
Change in accumulated other comprehensive income                 (43,000)
Ending balance, Value at Sep. 30, 2020 $ 2,000 $ 0 485,664,000 27,951,000 476,000 (401,916,000)     112,177,000
Ending balance, Shares at Sep. 30, 2020 18,372,134 1         18,372,134 1  
Beginning balance, Value at Mar. 31, 2020 $ 2,000 $ 0 470,639,000 28,881,000 378,000 (399,822,000)     100,078,000
Beginning balance, Shares at Mar. 31, 2020 18,123,963 1              
Net income $ 0 $ 0 0 3,489,000 0 2,435,000     5,924,000
Distributions to non-controlling unitholders 0 0 0 0 0 (2,789,000)     (2,789,000)
Equity-based compensation expense and related dividend equivalents, value $ 0 $ 0 2,812,000 0 0 0     2,812,000
Equity-based compensation expense and related dividend equivalents, shares 0 0              
Dividends to Class A common stockholders $ 0 $ 0 0 (3,987,000) 0 0     (3,987,000)
Change in accumulated other comprehensive income 0 0 0 0 62,000 55,000     117,000
Other 0 0 0 2,000 0 0     2,000
Ending balance, Value at Jun. 30, 2020 $ 2,000 $ 0 473,451,000 28,385,000 440,000 (400,121,000)     102,157,000
Ending balance, Shares at Jun. 30, 2020 18,123,963 1              
Net income $ 0 $ 0 0 3,553,000 0 3,171,000     6,724,000
Distributions to non-controlling unitholders 0 0 0 0 0 (5,000,000)     (5,000,000)
Equity-based compensation expense and related dividend equivalents, value $ 0 $ 0 3,413,000 0 0 0     3,413,000
Equity-based compensation expense and related dividend equivalents, shares 0 0              
Dividends to Class A common stockholders $ 0 $ 0 0 (3,988,000) 0 0     (3,988,000)
Change in accumulated other comprehensive income 0 0 0 0 36,000 34,000     70,000
Acquisitions $ 0 $ 0 8,800,000 0 0 0     8,800,000
Acquisitions, (in Shares) 248,171 0              
Other $ 0 $ 0 0 1,000 0 0     1,000
Ending balance, Value at Sep. 30, 2020 $ 2,000 $ 0 $ 485,664,000 $ 27,951,000 $ 476,000 $ (401,916,000)     $ 112,177,000
Ending balance, Shares at Sep. 30, 2020 18,372,134 1         18,372,134 1  
v3.20.2
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Cash flows from operating activities:    
Net income $ 17,938 $ 41,654
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 19,572 16,694
Impairment charge - leased assets 7,902 0
Bad debt expense 4,024 3,420
Equity-based compensation expense 8,347 4,860
Deferred income tax expense 1,889 3,630
Fair value adjustments to contingent consideration (105) 330
Other, net 209 1,193
Changes in operating assets and liabilities (16,305) (16,594)
Net cash provided by operating activities 43,471 55,187
Cash flows from investing activities:    
Purchases of property, equipment and capitalization of software (4,575) (10,093)
Acquisitions, net of cash acquired of $867k and $, respectively (10,627) 0
Restricted cash acquired with the Marketing Funds acquisition 0 28,495
Other 0 (1,200)
Net cash (used in) provided by investing activities (15,202) 17,202
Cash flows from financing activities:    
Payments on debt (1,986) (1,964)
Distributions paid to non-controlling unitholders (10,566) (11,460)
Dividends and dividend equivalents paid to Class A common stockholders (12,250) (11,298)
Payments related to tax withholding for share-based compensation (2,268) (836)
Net cash used in financing activities (27,070) (25,558)
Effect of exchange rate changes on cash (30) 76
Net increase in cash, cash equivalents and restricted cash 1,169 46,907
Cash, cash equivalents and restricted cash, beginning of year 103,601 59,974
Cash, cash equivalents and restricted cash, end of period 104,770 106,881
Supplemental disclosures of cash flow information:    
Cash paid for interest 6,638 9,004
Net cash paid for income taxes 3,963 6,032
Payments pursuant to tax receivable agreements 0 2,854
Schedule of non-cash investing activities:    
Class A shares issued as consideration for acquisitions $ 8,800 $ 0
v3.20.2
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Condensed Consolidated Statements of Cash Flows    
Cash acquired $ 867 $ 0
v3.20.2
Business and Organization
 9 Months Ended
Sep. 30, 2020
Business and Organization  
Business and Organization

1. Business and Organization

RE/MAX Holdings, Inc. (“Holdings”) and its consolidated subsidiaries, including RMCO, LLC (“RMCO”), are referred to hereinafter as the “Company.”

The Company is a franchisor in the real estate industry, franchising real estate brokerages globally under the RE/MAX brand (“RE/MAX”) and mortgage brokerages within the United States (“U.S.”) under the Motto Mortgage brand (“Motto”). RE/MAX, founded in 1973, has over 130,000 agents operating in over 8,000 offices and a presence in more than 110 countries and territories. Motto, founded in 2016, is the first nationally franchised mortgage brokerage in the U.S. RE/MAX and Motto are 100% franchised and do not operate any real estate or mortgage brokerage offices.
v3.20.2
Summary of Significant Accounting Policies
 9 Months Ended
Sep. 30, 2020
Summary of Significant Accounting Policies  
Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying Consolidated Balance Sheet at December 31, 2019, which was derived from the audited consolidated financial statements at that date, and the unaudited interim condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying condensed consolidated financial statements are presented on a consolidated basis and include the accounts of Holdings and its consolidated subsidiaries. All significant intercompany accounts and transactions have been eliminated. In the opinion of management, the accompanying condensed consolidated financial statements reflect all normal and recurring adjustments necessary to present fairly the Company’s financial position as of September 30, 2020 and the results of its operations and comprehensive income, cash flows and changes in its stockholders’ equity for the three and nine months ended September 30, 2020 and 2019. Interim results may not be indicative of full-year performance.

These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements within the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (“2019 Annual Report on Form 10-K”). Please refer to that document for a fuller discussion of all significant accounting policies.

Use of Estimates

The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

The Company generates the substantial majority of its revenue from contracts with customers. The Company’s major streams of revenue are:

●Continuing franchise fees, which are fixed contractual fees paid monthly by regional franchise owners and franchisees based on the number of RE/MAX agents in the respective franchised region or office and the number of Motto offices.
●Annual dues, which are fees charged directly to RE/MAX agents.
●Broker fees, which are fees paid on real estate commissions when a RE/MAX agent assists a consumer to buy or sell a home.
●Marketing Funds fees, which are fixed contractual fees paid monthly by franchisees based on the number of RE/MAX agents in the respective franchised region or office or the number of Motto offices.
●Franchise sales and other franchise revenue, which consist of fees from initial sales of RE/MAX and Motto franchises, renewals of RE/MAX franchises, master franchise fees, preferred marketing arrangements, approved supplier programs and event-based revenue from training and other programs.

Annual Dues

The activity in the Company’s deferred revenue for annual dues is included in “Deferred revenue” and “Deferred revenue, net of current portion” on the Condensed Consolidated Balance Sheets, and consists of the following in aggregate (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Balance at
beginning of period

    

New billings

    

Revenue recognized(a)

    

Balance at end
of period

Nine Months Ended September 30, 2020

​

$

15,982

​

$

24,840

​

$

(26,304)

​

$

14,518

​

(a)

Revenue recognized related to the beginning balance was $2.4 million and $13.7 million for the three and nine months ended September 30, 2020, respectively.

Franchise Sales

The activity in the Company’s franchise sales deferred revenue accounts consists of the following (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Balance at
beginning of period

    

New billings

    

Revenue recognized(a)

    

Balance at end
of period

Nine Months Ended September 30, 2020

​

$

25,884

​

$

6,029

​

$

(7,130)

​

$

24,783

​

(a)

Revenue recognized related to the beginning balance was $2.0 million and $6.6 million for the three and nine months ended September 30, 2020, respectively.

Commissions Related to Franchise Sales

Commissions paid on franchise sales are recognized as an asset and amortized over the contract life of the franchise agreement. The activity in the Company’s capitalized contract costs for commissions (which are included in “other current assets” and “other assets, net of current portion” on the Condensed Consolidated Balance Sheets) consist of the following (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance at

​

Expense

​

Additions to contract

​

Balance at end

​

    

beginning of period

    

recognized

    

cost for new activity

    

of period

Nine Months Ended September 30, 2020

​

$

3,578

​

$

(1,076)

​

$

1,142

​

$

3,644

​

Disaggregated Revenue

In the following table, segment revenue is disaggregated by geographical area (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

​

​

September 30, 

​

September 30, 

​

​

2020

​

2019

​

2020

​

2019

U.S.

​

$

42,257

​

$

42,013

​

$

114,786

​

$

125,437

Canada

​

​

5,898

​

​

5,886

​

​

15,833

​

​

17,128

Global

​

​

2,797

​

​

3,182

​

​

8,609

​

​

8,725

Total RE/MAX Franchising

​

​

50,952

​

​

51,081

​

​

139,228

​

​

151,290

U.S.

​

​

15,701

​

​

16,163

​

​

41,948

​

​

49,216

Canada

​

​

1,405

​

​

1,644

​

​

4,075

​

​

5,029

Global

​

​

184

​

​

227

​

​

554

​

​

621

Total Marketing Funds

​

​

17,290

​

​

18,034

​

​

46,577

​

​

54,866

Motto Franchising (a)

​

​

1,906

​

​

1,178

​

​

4,434

​

​

3,167

Other

​

​

925

​

​

1,248

​

​

3,313

​

​

4,777

Total

​

$

71,073

​

$

71,541

​

$

193,552

​

$

214,100

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(a)Revenue from the Motto Franchising segment is derived exclusively within the U.S.

In the following table, segment revenue is disaggregated by Company-Owned or Independent Regions in the U.S., Canada and Global (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

​

​

September 30, 

​

September 30, 

​

​

2020

​

2019

​

2020

​

2019

Company-Owned Regions

​

$

40,226

​

$

39,693

​

$

104,632

​

$

115,423

Independent Regions

​

​

8,792

​

​

8,954

​

​

25,357

​

​

25,726

Global and Other

​

​

1,934

​

​

2,434

​

​

9,239

​

​

10,141

Total RE/MAX Franchising

​

​

50,952

​

​

51,081

​

​

139,228

​

​

151,290

Marketing Funds

​

​

17,290

​

​

18,034

​

​

46,577

​

​

54,866

Motto Franchising

​

​

1,906

​

​

1,178

​

​

4,434

​

​

3,167

Other

​

​

925

​

​

1,248

​

​

3,313

​

​

4,777

Total

​

$

71,073

​

$

71,541

​

$

193,552

​

$

214,100

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Certain items in the table above have been reclassified in the three and nine months ended September 30, 2019 to conform with the current year presentation.

Transaction Price Allocated to the Remaining Performance Obligations

The following table includes estimated revenue by year, excluding certain other immaterial items, expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Remainder of 2020

    

2021

    

2022

    

2023

    

2024

    

2025

    

Thereafter

    

Total

Annual dues

​

$

6,500

​

$

8,018

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

14,518

Franchise sales

​

​

1,846

​

​

6,572

​

​

5,230

​

​

3,831

​

​

2,555

​

​

1,350

​

​

3,399

​

​

24,783

Total

​

$

8,346

​

$

14,590

​

$

5,230

​

$

3,831

​

$

2,555

​

$

1,350

​

$

3,399

​

$

39,301

​

Cash, Cash Equivalents and Restricted Cash

All cash held by the Marketing Funds is contractually restricted. The following table reconciles the amounts presented for cash, both unrestricted and restricted, in the Condensed Consolidated Balance Sheets to the amounts presented in the Condensed Consolidated Statements of Cash Flows (in thousands):

​

​

​

​

​

​

​

​

​

​

September 30, 

​

December 31,

​

    

2020

​

2019

Cash and cash equivalents

​

$

89,135

​

$

83,001

Restricted cash

​

​

15,635

​

​

20,600

Total cash, cash equivalents and restricted cash

​

$

104,770

​

$

103,601

​

​

​

​

​

​

​

​

Services Provided to the Marketing Funds by RE/MAX Franchising

RE/MAX Franchising charges the Marketing Funds for various services it performs. These services primarily comprise (a) building and maintaining agent marketing technology, including customer relationship management tools, the remax.com website, agent, office and team websites, and mobile apps, (b) dedicated employees focused on marketing campaigns, and (c) various administrative services including customer support of technology, accounting and legal. Because these costs are ultimately paid by the Marketing Funds, they do not impact the net income of Holdings as the Marketing Funds have no reported net income.
​

Costs charged from RE/MAX Franchising to the Marketing Funds are as follows (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

​

​

​

September 30, 

​

September 30, 

​

​

​

2020

​

2019

​

2020

​

2019

​

Technology development - operating

​

$

2,721

​

$

1,523

​

$

9,414

​

$

3,687

​

Technology development - capital

​

​

104

​

​

1,420

​

​

864

​

​

3,884

​

Marketing staff and administrative services

​

​

988

​

​

589

​

​

3,199

​

​

2,638

​

Total

​

$

3,813

​

$

3,532

​

$

13,477

​

$

10,209

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Leases

The Company leases corporate offices, a distribution center, billboards and certain equipment. As all franchisees are independently owned and operated, there are no leases recognized for any offices used by the Company’s franchisees. All of the Company’s material leases are classified as operating leases.

The Company acts as the lessor for four sublease agreements on its corporate headquarters, consisting solely of operating leases.

The Company has made an accounting policy election not to recognize right-of-use (“ROU”) assets and lease liabilities that arise from any of its short-term leases. All leases with a term of 12 months or less at commencement, for which the Company is not reasonably certain to exercise available renewal options that would extend the lease term past 12 months, will be recognized on a straight-line basis over the lease term.

During the third quarter of 2020, the Company began executing on a plan to both refresh its corporate headquarters and sublease space made available through the refresh. As a result, the Company changed its asset grouping for its headquarters ROU asset to separate the portion that it intends to sublease from the portion it will continue to occupy and performed an impairment test on the portion it intends to sublease. Based on a comparison of undiscounted cash flows to the ROU asset, the Company determined that the asset was impaired, driven largely by the difference between the existing lease rate on the Company’s corporate headquarters and expected sublease rates available in the market. This resulted in an impairment charge of $7.9 million, which reflects the excess of the ROU asset over its fair value.

Recently Adopted Accounting Pronouncements

In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU“) 2018-15, Intangibles – Goodwill and Other Internal-Use Software (Subtopic 350-40): Customer’s Accounting for

Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract, which clarifies that implementation costs incurred by customers in cloud computing arrangements are deferred if they would be capitalized by customers in the software licensing arrangements under the internal-use software guidance. ASU 2018-15 also clarifies that any capitalized costs should not be recorded to “Depreciation and amortization” in the Consolidated Statements of Income. The Company adopted this standard effective January 1, 2020 prospectively to all new implementation costs incurred after adoption. The amendments of ASU 2018-15 did not have a significant impact on the Company’s consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), which eliminates certain disclosure requirements for fair value measurements and requires new or modified disclosures. ASU 2018-13 became effective for the Company on January 1, 2020. This new guidance was applied on a prospective basis. The amendments of ASU 2018-13 did not have a significant impact on the Company’s consolidated financial statements and related disclosures.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires earlier recognition of credit losses on loans, held-to-maturity securities, and certain other financial assets. ASU 2016-13 replaces the current incurred loss model with a model requiring entities to estimate expected credit losses over the life of the financial instrument based on both historical information as well as reasonable and supportable forecasts. The FASB requires entities to use a modified retrospective transition approach, in which an adjustment is made to beginning retained earnings for the cumulative effect of adopting the standard. ASU 2016-13 became effective for the Company on January 1, 2020. The standard had an immaterial effect on the Company’s credit losses at transition and no adjustment to retained earnings was required. All periods presented for comparative purposes prior to the adoption date of this standard were not adjusted.

New Accounting Pronouncements Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848), which contains temporary optional expedients and exceptions to the guidance in U.S. GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”). The new guidance is effective upon issuance and may be adopted on any date on or after March 12, 2020. The relief is temporary and only available until December 31, 2022, when the reference rate replacement activity is expected to have completed. The Company believes the amendments of ASU 2020-04 will not have a significant impact on the Company’s consolidated financial statements and related disclosures as the Company does not currently engage in interest rate hedging of its LIBOR based debt, nor does it believe it has any material contracts tied to LIBOR other than its Senior Secured Credit Agreement, as defined in Note 8, Debt.
v3.20.2
Non-controlling Interest
 9 Months Ended
Sep. 30, 2020
Noncontrolling Interest  
Non-controlling Interest

3. Non-controlling Interest

Holdings is the sole managing member of RMCO and operates and controls all of the business affairs of RMCO. The ownership of the common units in RMCO is summarized as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

September 30, 2020

​

December 31, 2019

​

​

    

Shares

    

Ownership %

    

Shares

    

Ownership %

 

Non-controlling interest ownership of common units in RMCO

​

12,559,600

​

40.6

%  

12,559,600

​

41.3

%

Holdings outstanding Class A common stock (equal to Holdings common units in RMCO)

​

18,372,134

​

59.4

%  

17,838,233

​

58.7

%

Total common units in RMCO

​

30,931,734

​

100.0

%  

30,397,833

​

100.0

%

​

The weighted average ownership percentages for the applicable reporting periods are used to calculate the “Net income attributable to RE/MAX Holdings, Inc.” A reconciliation of “Income before provision for income taxes” to “Net Income attributable to RE/MAX Holdings, Inc.” and “Net Income attributable to non-controlling interest” in the accompanying Condensed Consolidated Statements of Income for the periods indicated is detailed as follows (in thousands, except percentages):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended September 30, 

​

​

2020

​

2019

​

    

RE/MAX
Holdings,
Inc.

    

Non-controlling
interest

    

Total

    

RE/MAX
Holdings,
Inc.

    

Non-controlling
interest

    

Total

​

Weighted average ownership percentage of RMCO(a)

​

59.2

%  

​

40.8

%  

​

100.0

%  

​

58.7

%  

​

41.3

%  

​

100.0

%

Income before provision for income taxes(a)

$

5,142

​

$

3,633

​

$

8,775

​

$

12,152

​

$

8,565

​

$

20,717

​

Provision for income taxes(b)(c)

​

(1,589)

​

​

(462)

​

​

(2,051)

​

​

(2,979)

​

​

(474)

​

​

(3,453)

​

Net income

$

3,553

​

$

3,171

​

$

6,724

​

$

9,173

​

$

8,091

​

$

17,264

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Nine Months Ended September 30, 

​

​

2020

​

2019

​

​

RE/MAX
Holdings,
Inc.

​

Non-controlling
interest

​

Total

​

RE/MAX
Holdings,
Inc.

​

Non-controlling
interest

​

Total

​

Weighted average ownership percentage of RMCO(a)

​

59.0

%

​

41.0

%

​

100.0

%

​

58.6

%

​

41.4

%

​

100.0

%

Income before provision for income taxes(a)

$

14,589

​

$

9,896

​

$

24,485

​

$

29,438

​

$

20,763

​

$

50,201

​

Provision for income taxes(b)(c)

​

(4,916)

​

​

(1,631)

​

​

(6,547)

​

​

(7,286)

​

​

(1,261)

​

​

(8,547)

​

Net income

$

9,673

​

$

8,265

​

$

17,938

​

$

22,152

​

$

19,502

​

$

41,654

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(a)The weighted average ownership percentage of RMCO differs from the allocation of income before provision for income taxes between RE/MAX Holdings and the non-controlling interest due to certain relatively insignificant items recorded at RE/MAX Holdings.
(b)The provision for income taxes attributable to Holdings is primarily comprised of U.S. federal and state income taxes on its proportionate share of the flow-through income from RMCO. It also includes Holdings’ share of taxes directly incurred by RMCO and its subsidiaries, related primarily to tax liabilities in certain foreign jurisdictions.
(c)The provision for income taxes attributable to the non-controlling interest represents its share of taxes related primarily to tax liabilities in certain foreign jurisdictions directly incurred by RMCO or its subsidiaries. Otherwise, because RMCO is a flow-through entity, there is no U.S. federal and state income tax provision recorded on the non-controlling interest.

Distributions and Other Payments to Non-controlling Unitholders

Under the terms of RMCO’s limited liability company operating agreement, RMCO makes cash distributions to non-controlling unitholders on a pro-rata basis. The distributions paid or payable to non-controlling unitholders are summarized as follows (in thousands):

​

​

​

​

​

​

​

​

Nine Months Ended

​

September 30, 

​

2020

​

2019

​

Tax and other distributions

$

2,277

​

$

3,547

​

Dividend distributions

​

8,289

​

​

7,913

​

Total distributions to non-controlling unitholders

$

10,566

​

$

11,460

​

​

​

​

​

​

​

​

​
v3.20.2
Earnings Per Share and Dividends
 9 Months Ended
Sep. 30, 2020
Earnings Per Share and Dividends  
Earnings Per Share and Dividends

4. Earnings Per Share and Dividends

Earnings Per Share

The following is a reconciliation of the numerator and denominator used in the basic and diluted EPS calculations (in thousands, except shares and per share information):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

​

​

September 30, 

​

September 30, 

​

​

2020

​

2019

​

2020

​

2019

Numerator

​

​

​

​

​

​

​

​

​

​

​

​

Net income attributable to RE/MAX Holdings, Inc.

​

$

3,553

​

$

9,173

​

$

9,673

​

$

22,152

Denominator for basic net income per share of Class A common stock

​

​

​

​

​

​

​

​

​

​

​

​

Weighted average shares of Class A common stock outstanding

​

​

18,196,454

​

​

17,826,332

​

​

18,098,227

​

​

17,803,708

Denominator for diluted net income per share of Class A common stock

​

​

​

​

​

​

​

​

​

​

​

​

Weighted average shares of Class A common stock outstanding

​

​

18,196,454

​

​

17,826,332

​

​

18,098,227

​

​

17,803,708

Add dilutive effect of the following:

​

​

​

​

​

​

​

​

​

​

​

​

Restricted stock

​

​

171,597

​

​

13,826

​

​

84,629

​

​

27,234

Weighted average shares of Class A common stock outstanding, diluted

​

​

18,368,051

​

​

17,840,158

​

​

18,182,856

​

​

17,830,942

Earnings per share of Class A common stock

​

​

​

​

​

​

​

​

​

​

​

​

Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock, basic

​

$

0.20

​

$

0.51

​

$

0.53

​

$

1.24

Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock, diluted

​

$

0.19

​

$

0.51

​

$

0.53

​

$

1.24

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Outstanding Class B common stock does not share in the earnings of Holdings and is therefore not a participating security. Accordingly, basic and diluted net income per share of Class B common stock has not been presented.

Dividends

Dividends declared and paid during each quarter ended per share on all outstanding shares of Class A common stock were as follows (in thousands, except per share information):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Nine Months Ended September 30, 

​

​

2020

​

2019

Quarter end declared

    

Date paid

    

Per share

    

Amount paid
to Class A
stockholders

    

Amount paid
to non-controlling
unitholders

    

Date paid

    

Per share

    

Amount paid
to Class A
stockholders

    

Amount paid
to non-controlling
unitholders

March 31

​

March 18, 2020

​

$

0.22

​

$

3,986

​

$

2,763

​

March 20, 2019

​

$

0.21

​

$

3,740

​

$

2,638

June 30

​

June 2, 2020

​

​

0.22

​

​

3,987

​

​

2,763

​

May 29, 2019

​

​

0.21

​

​

3,739

​

​

2,637

September 30

​

September 2, 2020

​

​

0.22

​

​

3,988

​

​

2,763

​

August 28, 2019

​

​

0.21

​

​

3,745

​

​

2,638

​

​

​

​

$

0.66

​

$

11,961

​

$

8,289

​

​

​

$

0.63

​

$

11,224

​

$

7,913

​

On November 4, 2020, the Company’s Board of Directors declared a quarterly dividend of $0.22 per share on all outstanding shares of Class A common stock, which is payable on December 2, 2020 to stockholders of record at the close of business on November 18, 2020.
v3.20.2
Acquisitions
 9 Months Ended
Sep. 30, 2020
Acquisitions  
Acquisitions

5. Acquisitions

Technology Acquisitions

On September 10, 2020, the Company acquired The Gadberry Group, LLC (“Gadberry”) for $4.6 million in cash, net of cash acquired, and $5.5 million in Class A common stock, plus approximately $9.9 million of equity-based compensation, which will be accounted for as compensation expense in the future over two to three years (see Note 11, Equity-Based Compensation for additional information). In addition, the Company recorded a contingent consideration liability in connection with the purchase of Gadberry, which had an acquisition date fair value of $0.9 million, measured at the present value of the probability weighted consideration expected to be transferred. Gadberry is a location intelligence data company whose products have been instrumental in the success of the Company’s consumer website, www.remax.com. Founded in 2000, Gadberry specializes in building products that help clients solve geospatial

challenges through location data. Gadberry plans to expand its non-RE/MAX clients while maintaining their contributions to the RE/MAX technology offering.

​

On August 25, 2020, the Company acquired Wemlo, Inc. (“wemlo”) for $6.1 million in cash, net of cash acquired, and $3.3 million in Class A in common stock, plus approximately $6.7 million of equity-based compensation, which will be accounted for as compensation expense in the future over three years (see Note 11, Equity-Based Compensation for additional information). Wemlo is a fintech company that has developed its cloud service for mortgage brokers, combining third-party loan processing services with an all-in-one digital platform.

​

The total purchase price was allocated to the assets and liabilities acquired based on their preliminary estimated fair values. The Company recorded $14.4 million in goodwill, of which approximately 50% is deductible for tax purposes, and $6.3 million in other intangibles as a result of these acquisitions.

​

Marketing Funds

On January 1, 2019, the Company acquired all of the regional and pan-regional advertising fund entities previously owned by its founder and Chairman of the Board of Directors, David Liniger, for a nominal amount. As in the past, the Marketing Funds are contractually obligated to use the funds collected to support both regional and pan-regional marketing campaigns designed to build and maintain brand awareness and to support the Company’s agent marketing technology. The acquisitions of the Marketing Funds were part of the Company’s succession plan, and ownership of the Marketing Funds by the franchisor is a common structure. Expenses incurred with the acquisition of the Marketing Funds were not material.

The total assets equal the total liabilities of the Marketing Funds and beginning January 1, 2019, are reflected in the condensed consolidated financial statements of the Company. The following table summarizes the Company’s allocation of the purchase price to the fair value of assets acquired and liabilities assumed (in thousands):

​

​

​

​

​

Restricted cash

​

$

28,495

Other current assets

​

​

8,472

Property and equipment

​

​

788

Other assets, net of current portion

​

​

126

Total assets acquired

​

​

37,881

Other current liabilities

​

​

37,881

Total liabilities assumed

​

​

37,881

Total acquisition price

​

$

-

​

The Company finalized its accounting for the acquisition of the Marketing Funds during the three months ended June 30, 2019. The Marketing Funds constitutes a business and was accounted for using the fair value acquisition method. The total purchase price was allocated to the assets acquired based on their estimated fair values.

v3.20.2
Intangible Assets and Goodwill
 9 Months Ended
Sep. 30, 2020
Intangible Assets and Goodwill  
Intangible Assets and Goodwill

6. Intangible Assets and Goodwill

The following table provides the components of the Company’s intangible assets (in thousands, except weighted average amortization period in years):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Weighted

    

​

​

    

​

​

    

​

​

    

​

​

    

​

​

    

​

​

​

​

Average

​

As of September 30, 2020

​

As of December 31, 2019

​

​

Amortization

​

Initial

​

Accumulated

​

Net

​

Initial

​

Accumulated

​

Net

​

​

Period

​

Cost

​

Amortization

​

Balance

​

Cost

​

Amortization

​

Balance

Franchise agreements

​

12.5

​

$

180,867

​

$

(104,802)

​

$

76,065

​

$

180,867

​

$

(93,197)

​

$

87,670

Other intangible assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Software (a)

​

4.4

​

$

42,251

​

$

(15,952)

​

$

26,299

​

$

36,680

​

$

(9,653)

​

$

27,027

Trademarks

​

8.3

​

​

2,311

​

​

(1,204)

​

​

1,107

​

​

1,904

​

​

(1,037)

​

​

867

Non-compete agreements

​

4.4

​

​

3,920

​

​

(2,479)

​

​

1,441

​

​

3,700

​

​

(1,546)

​

​

2,154

Training materials

​

5.0

​

​

2,400

​

​

(1,000)

​

​

1,400

​

​

2,400

​

​

(640)

​

​

1,760

Other

​

3.8

​

​

1,670

​

​

(493)

​

​

1,177

​

​

800

​

​

(293)

​

​

507

Total other intangible assets

​

4.6

​

$

52,552

​

$

(21,128)

​

$

31,424

​

$

45,484

​

$

(13,169)

​

$

32,315

​

(a)As of September 30, 2020 and December 31, 2019, capitalized software development costs of $0.8 million and $10.5 million, respectively, were related to technology projects not yet complete and ready for their intended use and thus were not subject to amortization.

Amortization expense was $6.4 million and $5.2 million for the three months ended September 30, 2020 and 2019, respectively, and $18.3 million and $15.5 million for the nine months ended September 30, 2020 and 2019, respectively.

The estimated future amortization expense for the next five years related to intangible assets is as follows (in thousands):

​

​

​

As of September 30, 2020:

​

​

Remainder of 2020

$

7,271

2021

​

27,622

2022

​

21,004

2023

​

16,817

2024

​

14,150

Thereafter

​

20,625

​

$

107,489

​

The following table presents changes to goodwill (in thousands), by segment:

​

​

​

​

​

​

​

​

​

​

​

​

​

RE/MAX
Franchising

​

Motto Franchising

    

Other

    

Total

Balance, January 1, 2020

$

147,238

​

$

11,800

​

$

—

​

$

159,038

Goodwill recognized from acquisitions

​

2,926

​

​

6,837

​

​

7,586

​

​

17,349

Effect of changes in foreign currency exchange rates

​

(85)

​

​

—

​

​

—

​

​

(85)

Balance, September 30, 2020

$

150,079

​

$

18,637

​

$

7,586

​

$

176,302

​
v3.20.2
Accrued Liabilities
 9 Months Ended
Sep. 30, 2020
Accrued Liabilities.  
Accrued Liabilities

7. Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

​

​

​

​

​

​

​

​

​

September 30, 

​

December 31, 

​

​

2020

​

2019

Marketing Funds (a)

​

$

41,709

​

$

39,672

Accrued payroll and related employee costs

​

​

3,443

​

​

11,900

Accrued taxes

​

​

1,833

​

​

2,451

Accrued professional fees

​

​

1,895

​

​

2,047

Other

​

​

3,193

​

​

4,093

​

​

$

52,073

​

$

60,163

​

​

​

​

​

​

​

(a)Consists primarily of liabilities recognized to reflect the contractual restriction that all funds collected in the Marketing Funds must be spent for designated purposes. See Note 2, Summary of Significant Accounting Policies for additional information.
v3.20.2
Debt
 9 Months Ended
Sep. 30, 2020
Debt  
Debt

8. Debt

Debt, net of current portion, consists of the following (in thousands):

​

​

​

​

​

​

​

​

​

September 30, 

    

December 31, 

​

​

2020

​

2019

Senior Secured Credit Facility

​

$

225,600

​

$

227,363

Other long-term financing(a)

​

​

139

​

​

362

Less unamortized debt issuance costs

​

​

(957)

​

​

(1,182)

Less unamortized debt discount costs

​

​

(699)

​

​

(862)

Less current portion(a)

​

​

(2,489)

​

​

(2,648)

​

​

$

221,594

​

$

223,033

​

​

​

​

​

​

​

(a)Includes financing assumed with the acquisition of booj. As of September 30, 2020, the carrying value of this financing approximates the fair value.

Maturities of debt are as follows (in thousands):

​

​

​

​

As of September 30, 2020

    

​

​

Remainder of 2020

​

$

663

2021

​

​

2,414

2022

​

​

2,350

2023

​

​

220,312

​

​

$

225,739

​

​

​

​

​

Senior Secured Credit Facility

In July 2013, the Company entered into a credit agreement with several lenders and administered by a bank, referred to herein as the “2013 Senior Secured Credit Facility.” In December 2016, the 2013 Senior Secured Credit Facility was amended and restated, referred to herein as the “Senior Secured Credit Facility.” The Senior Secured Credit Facility consists of a $235.0 million term loan facility which matures on December 15, 2023 and a $10.0 million revolving loan facility for which any loans outstanding must be repaid on December 15, 2021. As of September 30, 2020, the Company had no revolving loans outstanding under its Senior Secured Credit Facility. As of September 30, 2020, the interest rate on the term loan facility was 3.50%.
​
v3.20.2
Fair Value Measurements
 9 Months Ended
Sep. 30, 2020
Fair Value Measurements  
Fair Value Measurements

9. Fair Value Measurements

Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering assumptions, the Company follows a three-tier fair value hierarchy, which is described in detail in the 2019 Annual Report on Form 10-K.

A summary of the Company’s liabilities measured at fair value on a recurring basis is as follows (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

September 30, 2020

​

December 31, 2019

​

    

Fair Value

    

Level 1

    

Level 2

    

Level 3

​

Fair Value

    

Level 1

    

Level 2

    

Level 3

Liabilities

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Contingent consideration

​

$

5,830

​

$

—

​

$

—

​

$

5,830

​

$

5,005

​

$

—

​

$

—

​

$

5,005

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

The Company is required to pay additional purchase consideration totaling 8% of gross receipts collected by Motto each year (the “Revenue Share Year”) through September 30, 2026, with no limitation as to the maximum payout. The fair value of the contingent purchase consideration represents the forecasted discounted cash payments that the Company expects to pay. Increases or decreases in the fair value of the contingent purchase consideration can result from changes in discount rates as well as the timing and amount of forecasted revenues. The forecasted revenue growth assumption that is most sensitive is the assumed franchise sales count for which the forecast assumes between 60-80 franchises sold annually, with a weighted average of approximately 75. The model also assumes a discount rate of approximately 15%. A 10% reduction in the number of franchise sales would decrease the liability by $0.2 million. A 1% change to the discount rate applied to the forecast would change the liability by approximately $0.1 million. As of September 30, 2020, contingent consideration also includes an amount recognized in connection with the acquisition of Gadberry (see Note 5, Acquisitions for more information on this acquisition).

The Company measures these contingent consideration liabilities each reporting period and recognizes changes in fair value, if any, in “Selling, operating and administrative expenses” in the accompanying Condensed Consolidated Statements of Income and recorded as a component of “Accrued liabilities” and “Other liabilities, net of current portion” in the accompanying Condensed Consolidated Balance Sheets.

The table below presents a reconciliation of this liability (in thousands):

​

​

​

​

​

​

Total

Balance at January 1, 2020

​

$

5,005

Fair value adjustments

​

​

(105)

Acquisitions - Gadberry

​

​

930

Balance at September 30, 2020

​

$

5,830

​

​

​

​

​

The following table summarizes the carrying value and fair value of the Senior Secured Credit Facility (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

September 30, 2020

​

December 31, 2019

​

​

Carrying
Amount

    

Fair Value
Level 2

    

Carrying
Amount

    

Fair Value
Level 2

Senior Secured Credit Facility

​

$

223,944

​

$

222,216

​

$

225,319

​

$

227,363

​

​

​

​

​

​

​

​

​

​

​

​

​

​
v3.20.2
Income Taxes
 9 Months Ended
Sep. 30, 2020
Income Taxes  
Income Taxes

10. Income Taxes

​

The “Provision for income taxes” in the accompanying Condensed Consolidated Statements of Income is based on an estimate of the Company’s annualized effective income tax rate.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was enacted which includes several significant business tax provisions. The Company recognized the effect of this change in tax law during the first quarter, which was not significant. The CARES Act provides a five-year carryback of net operating losses generated in tax years beginning after December 31, 2017 and before January 1, 2020. Based upon this change in law, any 2020 tax loss, if realized, will be able to be carried back five years.
v3.20.2
Equity-Based Compensation
 9 Months Ended
Sep. 30, 2020
Equity-Based Compensation  
Equity-Based Compensation

11. Equity-Based Compensation

Employee equity-based compensation expense, net of the amount capitalized in internally developed software, is as follows (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

​

​

September 30, 

​

September 30, 

​

    

2020

    

2019

    

2020

    

2019

Expense from time-based awards (a)

​

$

3,040

​

$

1,883

​

$

7,535

​

$

5,846

Expense from performance-based awards (a)(b)

​

​

374

​

​

(3,582)

​

​

844

​

​

(3,332)

Expense from bonus to be settled in shares (c)

​

​

—

​

​

687

​

​

—

​

​

2,505

Equity-based compensation capitalized

​

​

—

​

​

25

​

​

(32)

​

​

(159)

Equity-based compensation expense

​

$

3,414

​

$

(987)

​

$

8,347

​

$

4,860

​

​

​

​

​

​

​

​

​

​

​

​

​

(a)Includes awards granted to booj, First, wemlo and Gadberry employees and former owners at the time of acquisition.
(b)Expense recognized for performance-based awards is re-assessed each quarter based on expectations of achievement against the performance conditions. The Company granted certain performance awards to booj employees that were modified in September 2019 to extend the due date resulting in a significant reversal of expense in the third quarter of 2019. These awards substantially vested on December 31, 2019 and have no comparable amounts in 2020.
(c)In 2019, the Company revised its annual bonus plan so that a portion of the bonus for most employees would be settled in shares if the Company met certain performance metrics. The Company eliminated the 2020 corporate bonus plan as part of cost savings measures in connection with the COVID-19 pandemic.

Time-based Restricted Stock

The following table summarizes equity-based compensation activity related to time-based restricted stock units and restricted stock awards:

​

​

​

​

​

​

​

​

    

Shares

    

Weighted average
grant date fair
value per share

Balance, January 1, 2020

​

455,452

​

$

46.15

Granted

​

769,750

​

$

33.05

Shares vested (including tax withholding) (a)

​

(163,028)

​

$

45.58

Forfeited

​

(14,778)

​

$

37.20

Balance, September 30, 2020

​

1,047,396

​

$

36.73

​

​

​

​

​

​

(a)Pursuant to the terms of the RE/MAX Holdings, Inc. 2013 Omnibus Incentive Plan, shares withheld by the Company for the payment of the employee's tax withholding related to shares vesting are added back to the pool of shares available for future awards.

As of September 30, 2020, there was $30.0 million of total unrecognized expense, all of which is related to unvested awards, which is expected to be recognized over the weighted-average remaining vesting period of 2.2 years.

Performance-based Restricted Stock

The following table summarizes equity-based compensation activity related to performance-based restricted stock units:

​

​

​

​

​

​

​

​

    

Shares

    

Weighted average
grant date fair
value per share

Balance, January 1, 2020

​

139,964

​

$

45.31

Granted

​

205,188

​

$

28.34

Shares vested (including tax withholding) (a)

​

(6,331)

​

$

38.49

Forfeited

​

(8,629)

​

$

39.77

Balance, September 30, 2020

​

330,192

​

$

35.04

​

​

​

​

​

​

(a)Represents the total participant target award.

As of September 30, 2020, there was $2.9 million of total unrecognized expense, all of which is related to unvested awards, which is expected to be recognized over the weighted-average remaining vesting period of 2.0 years.
​
v3.20.2
Commitments and Contingencies
 9 Months Ended
Sep. 30, 2020
Commitments and Contingencies  
Commitments and Contingencies

12. Commitments and Contingencies

In March 2019, a putative class action complaint was filed that, as amended, brings claims against National Association of Realtors (“NAR”), Realogy Holdings Corp., HomeServices of America, Inc, RE/MAX, LLC, and Keller Williams Realty, Inc by plaintiff Christopher Moehrl in the Northern District of Illinois. The Company has since been named as a defendant in other cases that make similar allegations and seek similar relief. For convenience all of these lawsuits are collectively referred to as the “Moehrl-related suits.” The plaintiffs in the Moehrl-related suits allege that a NAR rule requires brokers to make a blanket, non-negotiable offer of buyer broker compensation when listing a property, and that this results in inflated costs to buyers and/or sellers in violation of antitrust and other federal and state laws. Some actions allege that buyer brokers steered their clients toward listings offering those brokers higher compensation. The Moehrl-related suits further allege that the Company and other franchisor defendants use their agreements with franchisees to require them to follow the NAR rule. Plaintiffs seek damages from the defendants and an injunction against defendants requiring sellers to pay the buyer broker. The Company intends to vigorously defend against all of these claims. The Company may become involved in additional litigation or other legal proceedings concerning the same or similar allegations.
​
v3.20.2
Segment Information
 9 Months Ended
Sep. 30, 2020
Segment Information  
Segment Information

13. Segment Information

​

The Company operates under the following four operating segments: RE/MAX Franchising, Motto Franchising, Marketing Funds and booj. Due to quantitative insignificance, the booj operating segment does not meet the criteria of a reportable segment and is included in “Other”. Motto Franchising does not meet the quantitative significance test; however, management has chosen to report results for the segment as it believes it will be a key driver of future success for Holdings. Management evaluates the operating results of its segments based upon revenue and adjusted earnings before interest, the provision for income taxes, depreciation and amortization and other non-cash and non-recurring cash charges or other items (“Adjusted EBITDA”). The Company’s presentation of Adjusted EBITDA may not be comparable to similar measures used by other companies. Except for the adjustments identified below in arriving at Adjusted EBITDA, the accounting policies of the reportable segments are the same as those described in the Company’s 2019 Annual Report on Form 10-K.

​
The following table presents revenue from external customers by segment (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

​

​

September 30, 

​

September 30, 

​

​

2020

​

2019

​

2020

​

2019

Continuing franchise fees (a)

​

$

22,799

​

$

24,096

​

$

61,471

​

$

72,191

Annual dues

​

​

8,638

​

​

8,835

​

​

26,304

​

​

26,508

Broker fees

​

​

15,457

​

​

13,292

​

​

35,327

​

​

35,339

Franchise sales and other revenue

​

​

4,058

​

​

4,858

​

​

16,126

​

​

17,252

Total RE/MAX Franchising

​

​

50,952

​

​

51,081

​

​

139,228

​

​

151,290

Continuing franchise fees

​

​

1,540

​

​

1,072

​

​

3,749

​

​

2,827

Franchise sales and other revenue

​

​

366

​

​

106

​

​

685

​

​

340

Total Motto Franchising

​

​

1,906

​

​

1,178

​

​

4,434

​

​

3,167

Marketing Funds fees (a)

​

​

17,290

​

​

18,034

​

​

46,577

​

​

54,866

Other

​

​

925

​

​

1,248

​

​

3,313

​

​

4,777

Total revenue

​

$

71,073

​

$

71,541

​

$

193,552

​

$

214,100

​

(a)For the Nine Months ended September 30, 2020, Continuing franchise fees and Marketing Funds fees declined primarily due to the temporary COVID-19 related financial support programs offered to franchisees.

​

The following table presents a reconciliation of Adjusted EBITDA by segment to income before provision for income taxes (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

​

​

September 30, 

​

September 30, 

​

​

2020

​

2019

​

2020

​

2019

Adjusted EBITDA: RE/MAX Franchising

​

$

30,959

​

$

29,134

​

$

71,008

​

$

83,299

Adjusted EBITDA: Motto Franchising

​

​

(176)

​

​

(652)

​

​

(1,495)

​

​

(2,112)

Adjusted EBITDA: Other

​

​

(448)

​

​

(324)

​

​

(730)

​

​

(157)

Adjusted EBITDA: Consolidated

​

​

30,335

​

​

28,158

​

​

68,783

​

​

81,030

Gain (loss) on sale or disposition of assets

​

​

11

​

​

10

​

​

33

​

​

(353)

Impairment charge - leased assets (a)

​

​

(7,902)

​

​

—

​

​

(7,902)

​

​

—

Equity-based compensation expense

​

​

(3,414)

​

​

987

​

​

(8,347)

​

​

(4,860)

Acquisition-related expense (b)

​

​

(1,021)

​

​

(181)

​

​

(1,915)

​

​

(268)

Fair value adjustments to contingent consideration (c)

​

​

(250)

​

​

15

​

​

105

​

​

(330)

Interest income

​

​

25

​

​

412

​

​

328

​

​

1,074

Interest expense

​

​

(2,159)

​

​

(3,089)

​

​

(7,028)

​

​

(9,398)

Depreciation and amortization

​

​

(6,850)

​

​

(5,595)

​

​

(19,572)

​

​

(16,694)

Income before provision for income taxes

​

$

8,775

​

$

20,717

​

$

24,485

​

$

50,201

​

​

​

​

​

​

​

​

​

​

​

​

​

(a)Represents the impairment recognized on a portion of the Company’s corporate headquarters office building. See Note 2, Summary of Significant Accounting Policies for additional information.
(b)Acquisition-related expense includes personnel, legal, accounting, advisory and consulting fees incurred in connection with the acquisition and integration of acquired companies.
(c)Fair value adjustments to contingent consideration include amounts recognized for changes in the estimated fair value of the contingent consideration liabilities. See Note 9, Fair Value Measurements for additional information.
v3.20.2
Summary of Significant Accounting Policies (Policies)
 9 Months Ended
Sep. 30, 2020
Summary of Significant Accounting Policies  
Basis of Presentation

Basis of Presentation

The accompanying Consolidated Balance Sheet at December 31, 2019, which was derived from the audited consolidated financial statements at that date, and the unaudited interim condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying condensed consolidated financial statements are presented on a consolidated basis and include the accounts of Holdings and its consolidated subsidiaries. All significant intercompany accounts and transactions have been eliminated. In the opinion of management, the accompanying condensed consolidated financial statements reflect all normal and recurring adjustments necessary to present fairly the Company’s financial position as of September 30, 2020 and the results of its operations and comprehensive income, cash flows and changes in its stockholders’ equity for the three and nine months ended September 30, 2020 and 2019. Interim results may not be indicative of full-year performance.

These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements within the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (“2019 Annual Report on Form 10-K”). Please refer to that document for a fuller discussion of all significant accounting policies.
Use of Estimates

Use of Estimates

The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Revenue Recognition

Revenue Recognition

The Company generates the substantial majority of its revenue from contracts with customers. The Company’s major streams of revenue are:

●Continuing franchise fees, which are fixed contractual fees paid monthly by regional franchise owners and franchisees based on the number of RE/MAX agents in the respective franchised region or office and the number of Motto offices.
●Annual dues, which are fees charged directly to RE/MAX agents.
●Broker fees, which are fees paid on real estate commissions when a RE/MAX agent assists a consumer to buy or sell a home.
●Marketing Funds fees, which are fixed contractual fees paid monthly by franchisees based on the number of RE/MAX agents in the respective franchised region or office or the number of Motto offices.
●Franchise sales and other franchise revenue, which consist of fees from initial sales of RE/MAX and Motto franchises, renewals of RE/MAX franchises, master franchise fees, preferred marketing arrangements, approved supplier programs and event-based revenue from training and other programs.

Annual Dues

The activity in the Company’s deferred revenue for annual dues is included in “Deferred revenue” and “Deferred revenue, net of current portion” on the Condensed Consolidated Balance Sheets, and consists of the following in aggregate (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Balance at
beginning of period

    

New billings

    

Revenue recognized(a)

    

Balance at end
of period

Nine Months Ended September 30, 2020

​

$

15,982

​

$

24,840

​

$

(26,304)

​

$

14,518

​

(a)

Revenue recognized related to the beginning balance was $2.4 million and $13.7 million for the three and nine months ended September 30, 2020, respectively.

Franchise Sales

The activity in the Company’s franchise sales deferred revenue accounts consists of the following (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Balance at
beginning of period

    

New billings

    

Revenue recognized(a)

    

Balance at end
of period

Nine Months Ended September 30, 2020

​

$

25,884

​

$

6,029

​

$

(7,130)

​

$

24,783

​

(a)

Revenue recognized related to the beginning balance was $2.0 million and $6.6 million for the three and nine months ended September 30, 2020, respectively.

Commissions Related to Franchise Sales

Commissions paid on franchise sales are recognized as an asset and amortized over the contract life of the franchise agreement. The activity in the Company’s capitalized contract costs for commissions (which are included in “other current assets” and “other assets, net of current portion” on the Condensed Consolidated Balance Sheets) consist of the following (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance at

​

Expense

​

Additions to contract

​

Balance at end

​

    

beginning of period

    

recognized

    

cost for new activity

    

of period

Nine Months Ended September 30, 2020

​

$

3,578

​

$

(1,076)

​

$

1,142

​

$

3,644

​

Disaggregated Revenue

In the following table, segment revenue is disaggregated by geographical area (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

​

​

September 30, 

​

September 30, 

​

​

2020

​

2019

​

2020

​

2019

U.S.

​

$

42,257

​

$

42,013

​

$

114,786

​

$

125,437

Canada

​

​

5,898

​

​

5,886

​

​

15,833

​

​

17,128

Global

​

​

2,797

​

​

3,182

​

​

8,609

​

​

8,725

Total RE/MAX Franchising

​

​

50,952

​

​

51,081

​

​

139,228

​

​

151,290

U.S.

​

​

15,701

​

​

16,163

​

​

41,948

​

​

49,216

Canada

​

​

1,405

​

​

1,644

​

​

4,075

​

​

5,029

Global

​

​

184

​

​

227

​

​

554

​

​

621

Total Marketing Funds

​

​

17,290

​

​

18,034

​

​

46,577

​

​

54,866

Motto Franchising (a)

​

​

1,906

​

​

1,178

​

​

4,434

​

​

3,167

Other

​

​

925

​

​

1,248

​

​

3,313

​

​

4,777

Total

​

$

71,073

​

$

71,541

​

$

193,552

​

$

214,100

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(a)Revenue from the Motto Franchising segment is derived exclusively within the U.S.

In the following table, segment revenue is disaggregated by Company-Owned or Independent Regions in the U.S., Canada and Global (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

​

​

September 30, 

​

September 30, 

​

​

2020

​

2019

​

2020

​

2019

Company-Owned Regions

​

$

40,226

​

$

39,693

​

$

104,632

​

$

115,423

Independent Regions

​

​

8,792

​

​

8,954

​

​

25,357

​

​

25,726

Global and Other

​

​

1,934

​

​

2,434

​

​

9,239

​

​

10,141

Total RE/MAX Franchising

​

​

50,952

​

​

51,081

​

​

139,228

​

​

151,290

Marketing Funds

​

​

17,290

​

​

18,034

​

​

46,577

​

​

54,866

Motto Franchising

​

​

1,906

​

​

1,178

​

​

4,434

​

​

3,167

Other

​

​

925

​

​

1,248

​

​

3,313

​

​

4,777

Total

​

$

71,073

​

$

71,541

​

$

193,552

​

$

214,100

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Certain items in the table above have been reclassified in the three and nine months ended September 30, 2019 to conform with the current year presentation.

Transaction Price Allocated to the Remaining Performance Obligations

The following table includes estimated revenue by year, excluding certain other immaterial items, expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Remainder of 2020

    

2021

    

2022

    

2023

    

2024

    

2025

    

Thereafter

    

Total

Annual dues

​

$

6,500

​

$

8,018

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

14,518

Franchise sales

​

​

1,846

​

​

6,572

​

​

5,230

​

​

3,831

​

​

2,555

​

​

1,350

​

​

3,399

​

​

24,783

Total

​

$

8,346

​

$

14,590

​

$

5,230

​

$

3,831

​

$

2,555

​

$

1,350

​

$

3,399

​

$

39,301

​

Cash, Cash Equivalents and Restricted Cash

All cash held by the Marketing Funds is contractually restricted. The following table reconciles the amounts presented for cash, both unrestricted and restricted, in the Condensed Consolidated Balance Sheets to the amounts presented in the Condensed Consolidated Statements of Cash Flows (in thousands):

​

​

​

​

​

​

​

​

​

​

September 30, 

​

December 31,

​

    

2020

​

2019

Cash and cash equivalents

​

$

89,135

​

$

83,001

Restricted cash

​

​

15,635

​

​

20,600

Total cash, cash equivalents and restricted cash

​

$

104,770

​

$

103,601

​

​

​

​

​

​

​

​
Cash, Cash Equivalents and Restricted Cash

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Remainder of 2020

    

2021

    

2022

    

2023

    

2024

    

2025

    

Thereafter

    

Total

Annual dues

​

$

6,500

​

$

8,018

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

14,518

Franchise sales

​

​

1,846

​

​

6,572

​

​

5,230

​

​

3,831

​

​

2,555

​

​

1,350

​

​

3,399

​

​

24,783

Total

​

$

8,346

​

$

14,590

​

$

5,230

​

$

3,831

​

$

2,555

​

$

1,350

​

$

3,399

​

$

39,301
Services Provided to the Marketing Funds By RE/MAX Franchising

Services Provided to the Marketing Funds by RE/MAX Franchising

RE/MAX Franchising charges the Marketing Funds for various services it performs. These services primarily comprise (a) building and maintaining agent marketing technology, including customer relationship management tools, the remax.com website, agent, office and team websites, and mobile apps, (b) dedicated employees focused on marketing campaigns, and (c) various administrative services including customer support of technology, accounting and legal. Because these costs are ultimately paid by the Marketing Funds, they do not impact the net income of Holdings as the Marketing Funds have no reported net income.
​

Costs charged from RE/MAX Franchising to the Marketing Funds are as follows (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

​

​

​

September 30, 

​

September 30, 

​

​

​

2020

​

2019

​

2020

​

2019

​

Technology development - operating

​

$

2,721

​

$

1,523

​

$

9,414

​

$

3,687

​

Technology development - capital

​

​

104

​

​

1,420

​

​

864

​

​

3,884

​

Marketing staff and administrative services

​

​

988

​

​

589

​

​

3,199

​

​

2,638

​

Total

​

$

3,813

​

$

3,532

​

$

13,477

​

$

10,209

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​
Leases

Leases

The Company leases corporate offices, a distribution center, billboards and certain equipment. As all franchisees are independently owned and operated, there are no leases recognized for any offices used by the Company’s franchisees. All of the Company’s material leases are classified as operating leases.

The Company acts as the lessor for four sublease agreements on its corporate headquarters, consisting solely of operating leases.

The Company has made an accounting policy election not to recognize right-of-use (“ROU”) assets and lease liabilities that arise from any of its short-term leases. All leases with a term of 12 months or less at commencement, for which the Company is not reasonably certain to exercise available renewal options that would extend the lease term past 12 months, will be recognized on a straight-line basis over the lease term.

During the third quarter of 2020, the Company began executing on a plan to both refresh its corporate headquarters and sublease space made available through the refresh. As a result, the Company changed its asset grouping for its headquarters ROU asset to separate the portion that it intends to sublease from the portion it will continue to occupy and performed an impairment test on the portion it intends to sublease. Based on a comparison of undiscounted cash flows to the ROU asset, the Company determined that the asset was impaired, driven largely by the difference between the existing lease rate on the Company’s corporate headquarters and expected sublease rates available in the market. This resulted in an impairment charge of $7.9 million, which reflects the excess of the ROU asset over its fair value.
Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU“) 2018-15, Intangibles – Goodwill and Other Internal-Use Software (Subtopic 350-40): Customer’s Accounting for

Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract, which clarifies that implementation costs incurred by customers in cloud computing arrangements are deferred if they would be capitalized by customers in the software licensing arrangements under the internal-use software guidance. ASU 2018-15 also clarifies that any capitalized costs should not be recorded to “Depreciation and amortization” in the Consolidated Statements of Income. The Company adopted this standard effective January 1, 2020 prospectively to all new implementation costs incurred after adoption. The amendments of ASU 2018-15 did not have a significant impact on the Company’s consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), which eliminates certain disclosure requirements for fair value measurements and requires new or modified disclosures. ASU 2018-13 became effective for the Company on January 1, 2020. This new guidance was applied on a prospective basis. The amendments of ASU 2018-13 did not have a significant impact on the Company’s consolidated financial statements and related disclosures.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires earlier recognition of credit losses on loans, held-to-maturity securities, and certain other financial assets. ASU 2016-13 replaces the current incurred loss model with a model requiring entities to estimate expected credit losses over the life of the financial instrument based on both historical information as well as reasonable and supportable forecasts. The FASB requires entities to use a modified retrospective transition approach, in which an adjustment is made to beginning retained earnings for the cumulative effect of adopting the standard. ASU 2016-13 became effective for the Company on January 1, 2020. The standard had an immaterial effect on the Company’s credit losses at transition and no adjustment to retained earnings was required. All periods presented for comparative purposes prior to the adoption date of this standard were not adjusted.

New Accounting Pronouncements Not Yet Adopted

New Accounting Pronouncements Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848), which contains temporary optional expedients and exceptions to the guidance in U.S. GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”). The new guidance is effective upon issuance and may be adopted on any date on or after March 12, 2020. The relief is temporary and only available until December 31, 2022, when the reference rate replacement activity is expected to have completed. The Company believes the amendments of ASU 2020-04 will not have a significant impact on the Company’s consolidated financial statements and related disclosures as the Company does not currently engage in interest rate hedging of its LIBOR based debt, nor does it believe it has any material contracts tied to LIBOR other than its Senior Secured Credit Agreement, as defined in Note 8, Debt.
v3.20.2
Summary of Significant Accounting Policies (Tables)
 9 Months Ended
Sep. 30, 2020
Commissions related to franchise sales The activity in the Company’s capitalized contract costs for commissions (which are included in “other current assets” and “other assets, net of current portion” on the Condensed Consolidated Balance Sheets) consist of the following (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance at

​

Expense

​

Additions to contract

​

Balance at end

​

    

beginning of period

    

recognized

    

cost for new activity

    

of period

Nine Months Ended September 30, 2020

​

$

3,578

​

$

(1,076)

​

$

1,142

​

$

3,644
Schedule of disaggregated revenue

In the following table, segment revenue is disaggregated by geographical area (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

​

​

September 30, 

​

September 30, 

​

​

2020

​

2019

​

2020

​

2019

U.S.

​

$

42,257

​

$

42,013

​

$

114,786

​

$

125,437

Canada

​

​

5,898

​

​

5,886

​

​

15,833

​

​

17,128

Global

​

​

2,797

​

​

3,182

​

​

8,609

​

​

8,725

Total RE/MAX Franchising

​

​

50,952

​

​

51,081

​

​

139,228

​

​

151,290

U.S.

​

​

15,701

​

​

16,163

​

​

41,948

​

​

49,216

Canada

​

​

1,405

​

​

1,644

​

​

4,075

​

​

5,029

Global

​

​

184

​

​

227

​

​

554

​

​

621

Total Marketing Funds

​

​

17,290

​

​

18,034

​

​

46,577

​

​

54,866

Motto Franchising (a)

​

​

1,906

​

​

1,178

​

​

4,434

​

​

3,167

Other

​

​

925

​

​

1,248

​

​

3,313

​

​

4,777

Total

​

$

71,073

​

$

71,541

​

$

193,552

​

$

214,100

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(a)Revenue from the Motto Franchising segment is derived exclusively within the U.S.

In the following table, segment revenue is disaggregated by Company-Owned or Independent Regions in the U.S., Canada and Global (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

​

​

September 30, 

​

September 30, 

​

​

2020

​

2019

​

2020

​

2019

Company-Owned Regions

​

$

40,226

​

$

39,693

​

$

104,632

​

$

115,423

Independent Regions

​

​

8,792

​

​

8,954

​

​

25,357

​

​

25,726

Global and Other

​

​

1,934

​

​

2,434

​

​

9,239

​

​

10,141

Total RE/MAX Franchising

​

​

50,952

​

​

51,081

​

​

139,228

​

​

151,290

Marketing Funds

​

​

17,290

​

​

18,034

​

​

46,577

​

​

54,866

Motto Franchising

​

​

1,906

​

​

1,178

​

​

4,434

​

​

3,167

Other

​

​

925

​

​

1,248

​

​

3,313

​

​

4,777

Total

​

$

71,073

​

$

71,541

​

$

193,552

​

$

214,100

​

​

​

​

​

​

​

​

​

​

​

​

​
Schedule of transaction price allocated to the remaining performance obligations

The following table includes estimated revenue by year, excluding certain other immaterial items, expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Remainder of 2020

    

2021

    

2022

    

2023

    

2024

    

2025

    

Thereafter

    

Total

Annual dues

​

$

6,500

​

$

8,018

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

14,518

Franchise sales

​

​

1,846

​

​

6,572

​

​

5,230

​

​

3,831

​

​

2,555

​

​

1,350

​

​

3,399

​

​

24,783

Total

​

$

8,346

​

$

14,590

​

$

5,230

​

$

3,831

​

$

2,555

​

$

1,350

​

$

3,399

​

$

39,301

​
Schedule of reconciliation of cash, both unrestricted and restricted The following table reconciles the amounts presented for cash, both unrestricted and restricted, in the Condensed Consolidated Balance Sheets to the amounts presented in the Condensed Consolidated Statements of Cash Flows (in thousands):

​

​

​

​

​

​

​

​

​

​

September 30, 

​

December 31,

​

    

2020

​

2019

Cash and cash equivalents

​

$

89,135

​

$

83,001

Restricted cash

​

​

15,635

​

​

20,600

Total cash, cash equivalents and restricted cash

​

$

104,770

​

$

103,601

​

​

​

​

​

​

​
Schedule of cost charges to intersegment

Costs charged from RE/MAX Franchising to the Marketing Funds are as follows (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

​

​

​

September 30, 

​

September 30, 

​

​

​

2020

​

2019

​

2020

​

2019

​

Technology development - operating

​

$

2,721

​

$

1,523

​

$

9,414

​

$

3,687

​

Technology development - capital

​

​

104

​

​

1,420

​

​

864

​

​

3,884

​

Marketing staff and administrative services

​

​

988

​

​

589

​

​

3,199

​

​

2,638

​

Total

​

$

3,813

​

$

3,532

​

$

13,477

​

$

10,209

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​
Annual dues  
Schedule of contract liability

The activity in the Company’s deferred revenue for annual dues is included in “Deferred revenue” and “Deferred revenue, net of current portion” on the Condensed Consolidated Balance Sheets, and consists of the following in aggregate (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Balance at
beginning of period

    

New billings

    

Revenue recognized(a)

    

Balance at end
of period

Nine Months Ended September 30, 2020

​

$

15,982

​

$

24,840

​

$

(26,304)

​

$

14,518

​

(a)

Revenue recognized related to the beginning balance was $2.4 million and $13.7 million for the three and nine months ended September 30, 2020, respectively.
Franchise sales  
Schedule of contract liability

The activity in the Company’s franchise sales deferred revenue accounts consists of the following (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Balance at
beginning of period

    

New billings

    

Revenue recognized(a)

    

Balance at end
of period

Nine Months Ended September 30, 2020

​

$

25,884

​

$

6,029

​

$

(7,130)

​

$

24,783

​

(a)

Revenue recognized related to the beginning balance was $2.0 million and $6.6 million for the three and nine months ended September 30, 2020, respectively.
v3.20.2
Non-controlling Interest (Tables)
 9 Months Ended
Sep. 30, 2020
Noncontrolling Interest  
Summary of Ownership of the Common Units

​

​

​

​

​

​

​

​

​

​

​

​

​

September 30, 2020

​

December 31, 2019

​

​

    

Shares

    

Ownership %

    

Shares

    

Ownership %

 

Non-controlling interest ownership of common units in RMCO

​

12,559,600

​

40.6

%  

12,559,600

​

41.3

%

Holdings outstanding Class A common stock (equal to Holdings common units in RMCO)

​

18,372,134

​

59.4

%  

17,838,233

​

58.7

%

Total common units in RMCO

​

30,931,734

​

100.0

%  

30,397,833

​

100.0

%
Reconciliation from Income Before Provision for Income Taxes to Net Income

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended September 30, 

​

​

2020

​

2019

​

    

RE/MAX
Holdings,
Inc.

    

Non-controlling
interest

    

Total

    

RE/MAX
Holdings,
Inc.

    

Non-controlling
interest

    

Total

​

Weighted average ownership percentage of RMCO(a)

​

59.2

%  

​

40.8

%  

​

100.0

%  

​

58.7

%  

​

41.3

%  

​

100.0

%

Income before provision for income taxes(a)

$

5,142

​

$

3,633

​

$

8,775

​

$

12,152

​

$

8,565

​

$

20,717

​

Provision for income taxes(b)(c)

​

(1,589)

​

​

(462)

​

​

(2,051)

​

​

(2,979)

​

​

(474)

​

​

(3,453)

​

Net income

$

3,553

​

$

3,171

​

$

6,724

​

$

9,173

​

$

8,091

​

$

17,264

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Nine Months Ended September 30, 

​

​

2020

​

2019

​

​

RE/MAX
Holdings,
Inc.

​

Non-controlling
interest

​

Total

​

RE/MAX
Holdings,
Inc.

​

Non-controlling
interest

​

Total

​

Weighted average ownership percentage of RMCO(a)

​

59.0

%

​

41.0

%

​

100.0

%

​

58.6

%

​

41.4

%

​

100.0

%

Income before provision for income taxes(a)

$

14,589

​

$

9,896

​

$

24,485

​

$

29,438

​

$

20,763

​

$

50,201

​

Provision for income taxes(b)(c)

​

(4,916)

​

​

(1,631)

​

​

(6,547)

​

​

(7,286)

​

​

(1,261)

​

​

(8,547)

​

Net income

$

9,673

​

$

8,265

​

$

17,938

​

$

22,152

​

$

19,502

​

$

41,654

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(a)The weighted average ownership percentage of RMCO differs from the allocation of income before provision for income taxes between RE/MAX Holdings and the non-controlling interest due to certain relatively insignificant items recorded at RE/MAX Holdings.
(b)The provision for income taxes attributable to Holdings is primarily comprised of U.S. federal and state income taxes on its proportionate share of the flow-through income from RMCO. It also includes Holdings’ share of taxes directly incurred by RMCO and its subsidiaries, related primarily to tax liabilities in certain foreign jurisdictions.
(c)The provision for income taxes attributable to the non-controlling interest represents its share of taxes related primarily to tax liabilities in certain foreign jurisdictions directly incurred by RMCO or its subsidiaries. Otherwise, because RMCO is a flow-through entity, there is no U.S. federal and state income tax provision recorded on the non-controlling interest.
Distributions Paid or Payable

​

​

​

​

​

​

​

​

Nine Months Ended

​

September 30, 

​

2020

​

2019

​

Tax and other distributions

$

2,277

​

$

3,547

​

Dividend distributions

​

8,289

​

​

7,913

​

Total distributions to non-controlling unitholders

$

10,566

​

$

11,460

​

​

​

​

​

​

​

​
v3.20.2
Earnings Per Share and Dividends (Tables)
 9 Months Ended
Sep. 30, 2020
Earnings Per Share and Dividends  
Reconciliation of Numerator and Denominator used in Basic and Diluted EPS Calculations

The following is a reconciliation of the numerator and denominator used in the basic and diluted EPS calculations (in thousands, except shares and per share information):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

​

​

September 30, 

​

September 30, 

​

​

2020

​

2019

​

2020

​

2019

Numerator

​

​

​

​

​

​

​

​

​

​

​

​

Net income attributable to RE/MAX Holdings, Inc.

​

$

3,553

​

$

9,173

​

$

9,673

​

$

22,152

Denominator for basic net income per share of Class A common stock

​

​

​

​

​

​

​

​

​

​

​

​

Weighted average shares of Class A common stock outstanding

​

​

18,196,454

​

​

17,826,332

​

​

18,098,227

​

​

17,803,708

Denominator for diluted net income per share of Class A common stock

​

​

​

​

​

​

​

​

​

​

​

​

Weighted average shares of Class A common stock outstanding

​

​

18,196,454

​

​

17,826,332

​

​

18,098,227

​

​

17,803,708

Add dilutive effect of the following:

​

​

​

​

​

​

​

​

​

​

​

​

Restricted stock

​

​

171,597

​

​

13,826

​

​

84,629

​

​

27,234

Weighted average shares of Class A common stock outstanding, diluted

​

​

18,368,051

​

​

17,840,158

​

​

18,182,856

​

​

17,830,942

Earnings per share of Class A common stock

​

​

​

​

​

​

​

​

​

​

​

​

Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock, basic

​

$

0.20

​

$

0.51

​

$

0.53

​

$

1.24

Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock, diluted

​

$

0.19

​

$

0.51

​

$

0.53

​

$

1.24

​

​

​

​

​

​

​

​

​

​

​

​

​
Schedule of Dividends Declared and Paid Quarterly per Share

Dividends declared and paid during each quarter ended per share on all outstanding shares of Class A common stock were as follows (in thousands, except per share information):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Nine Months Ended September 30, 

​

​

2020

​

2019

Quarter end declared

    

Date paid

    

Per share

    

Amount paid
to Class A
stockholders

    

Amount paid
to non-controlling
unitholders

    

Date paid

    

Per share

    

Amount paid
to Class A
stockholders

    

Amount paid
to non-controlling
unitholders

March 31

​

March 18, 2020

​

$

0.22

​

$

3,986

​

$

2,763

​

March 20, 2019

​

$

0.21

​

$

3,740

​

$

2,638

June 30

​

June 2, 2020

​

​

0.22

​

​

3,987

​

​

2,763

​

May 29, 2019

​

​

0.21

​

​

3,739

​

​

2,637

September 30

​

September 2, 2020

​

​

0.22

​

​

3,988

​

​

2,763

​

August 28, 2019

​

​

0.21

​

​

3,745

​

​

2,638

​

​

​

​

$

0.66

​

$

11,961

​

$

8,289

​

​

​

$

0.63

​

$

11,224

​

$

7,913
v3.20.2
Acquisitions (Tables)
 9 Months Ended
Sep. 30, 2020
Marketing funds  
Acquisitions  
Schedule of Fair Value Of Assets at Acquisition Date The following table summarizes the Company’s allocation of the purchase price to the fair value of assets acquired and liabilities assumed (in thousands):

​

​

​

​

​

Restricted cash

​

$

28,495

Other current assets

​

​

8,472

Property and equipment

​

​

788

Other assets, net of current portion

​

​

126

Total assets acquired

​

​

37,881

Other current liabilities

​

​

37,881

Total liabilities assumed

​

​

37,881

Total acquisition price

​

$

-
v3.20.2
Intangible Assets and Goodwill (Tables)
 9 Months Ended
Sep. 30, 2020
Intangible Assets and Goodwill  
Schedule of components of intangible assets

The following table provides the components of the Company’s intangible assets (in thousands, except weighted average amortization period in years):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Weighted

    

​

​

    

​

​

    

​

​

    

​

​

    

​

​

    

​

​

​

​

Average

​

As of September 30, 2020

​

As of December 31, 2019

​

​

Amortization

​

Initial

​

Accumulated

​

Net

​

Initial

​

Accumulated

​

Net

​

​

Period

​

Cost

​

Amortization

​

Balance

​

Cost

​

Amortization

​

Balance

Franchise agreements

​

12.5

​

$

180,867

​

$

(104,802)

​

$

76,065

​

$

180,867

​

$

(93,197)

​

$

87,670

Other intangible assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Software (a)

​

4.4

​

$

42,251

​

$

(15,952)

​

$

26,299

​

$

36,680

​

$

(9,653)

​

$

27,027

Trademarks

​

8.3

​

​

2,311

​

​

(1,204)

​

​

1,107

​

​

1,904

​

​

(1,037)

​

​

867

Non-compete agreements

​

4.4

​

​

3,920

​

​

(2,479)

​

​

1,441

​

​

3,700

​

​

(1,546)

​

​

2,154

Training materials

​

5.0

​

​

2,400

​

​

(1,000)

​

​

1,400

​

​

2,400

​

​

(640)

​

​

1,760

Other

​

3.8

​

​

1,670

​

​

(493)

​

​

1,177

​

​

800

​

​

(293)

​

​

507

Total other intangible assets

​

4.6

​

$

52,552

​

$

(21,128)

​

$

31,424

​

$

45,484

​

$

(13,169)

​

$

32,315

​

(a)As of September 30, 2020 and December 31, 2019, capitalized software development costs of $0.8 million and $10.5 million, respectively, were related to technology projects not yet complete and ready for their intended use and thus were not subject to amortization.
Schedule of estimated future amortization of intangible assets, other than goodwill

The estimated future amortization expense for the next five years related to intangible assets is as follows (in thousands):

​

​

​

As of September 30, 2020:

​

​

Remainder of 2020

$

7,271

2021

​

27,622

2022

​

21,004

2023

​

16,817

2024

​

14,150

Thereafter

​

20,625

​

$

107,489
Schedule of changes to goodwill

The following table presents changes to goodwill (in thousands), by segment:

​

​

​

​

​

​

​

​

​

​

​

​

​

RE/MAX
Franchising

​

Motto Franchising

    

Other

    

Total

Balance, January 1, 2020

$

147,238

​

$

11,800

​

$

—

​

$

159,038

Goodwill recognized from acquisitions

​

2,926

​

​

6,837

​

​

7,586

​

​

17,349

Effect of changes in foreign currency exchange rates

​

(85)

​

​

—

​

​

—

​

​

(85)

Balance, September 30, 2020

$

150,079

​

$

18,637

​

$

7,586

​

$

176,302
v3.20.2
Accrued Liabilities (Tables)
 9 Months Ended
Sep. 30, 2020
Accrued Liabilities.  
Schedule of Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

​

​

​

​

​

​

​

​

​

September 30, 

​

December 31, 

​

​

2020

​

2019

Marketing Funds (a)

​

$

41,709

​

$

39,672

Accrued payroll and related employee costs

​

​

3,443

​

​

11,900

Accrued taxes

​

​

1,833

​

​

2,451

Accrued professional fees

​

​

1,895

​

​

2,047

Other

​

​

3,193

​

​

4,093

​

​

$

52,073

​

$

60,163

​

​

​

​

​

​

​

(a)Consists primarily of liabilities recognized to reflect the contractual restriction that all funds collected in the Marketing Funds must be spent for designated purposes. See Note 2, Summary of Significant Accounting Policies for additional information.
v3.20.2
Debt (Tables)
 9 Months Ended
Sep. 30, 2020
Debt  
Schedule of debt

Debt, net of current portion, consists of the following (in thousands):

​

​

​

​

​

​

​

​

​

September 30, 

    

December 31, 

​

​

2020

​

2019

Senior Secured Credit Facility

​

$

225,600

​

$

227,363

Other long-term financing(a)

​

​

139

​

​

362

Less unamortized debt issuance costs

​

​

(957)

​

​

(1,182)

Less unamortized debt discount costs

​

​

(699)

​

​

(862)

Less current portion(a)

​

​

(2,489)

​

​

(2,648)

​

​

$

221,594

​

$

223,033

​

​

​

​

​

​

​

(a)Includes financing assumed with the acquisition of booj. As of September 30, 2020, the carrying value of this financing approximates the fair value.
Schedule of Maturities of Debt

Maturities of debt are as follows (in thousands):

​

​

​

​

As of September 30, 2020

    

​

​

Remainder of 2020

​

$

663

2021

​

​

2,414

2022

​

​

2,350

2023

​

​

220,312

​

​

$

225,739

​

​

​

​
v3.20.2
Fair Value Measurements (Tables)
 9 Months Ended
Sep. 30, 2020
Fair Value Measurements  
Liabilities measured at fair value on a recurring basis

A summary of the Company’s liabilities measured at fair value on a recurring basis is as follows (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

September 30, 2020

​

December 31, 2019

​

    

Fair Value

    

Level 1

    

Level 2

    

Level 3

​

Fair Value

    

Level 1

    

Level 2

    

Level 3

Liabilities

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Contingent consideration

​

$

5,830

​

$

—

​

$

—

​

$

5,830

​

$

5,005

​

$

—

​

$

—

​

$

5,005

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​
Reconciliation of all liabilities of Company measured at fair value on a recurring basis using significant unobservable inputs

The table below presents a reconciliation of this liability (in thousands):

​

​

​

​

​

​

Total

Balance at January 1, 2020

​

$

5,005

Fair value adjustments

​

​

(105)

Acquisitions - Gadberry

​

​

930

Balance at September 30, 2020

​

$

5,830

​

​

​

​
Summary of carrying value and fair value of senior secured credit facility

The following table summarizes the carrying value and fair value of the Senior Secured Credit Facility (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

September 30, 2020

​

December 31, 2019

​

​

Carrying
Amount

    

Fair Value
Level 2

    

Carrying
Amount

    

Fair Value
Level 2

Senior Secured Credit Facility

​

$

223,944

​

$

222,216

​

$

225,319

​

$

227,363

​

​

​

​

​

​

​

​

​

​

​

​

​
v3.20.2
Equity-Based Compensation (Tables)
 9 Months Ended
Sep. 30, 2020
Employee Stock-Based Compensation Expense

Employee equity-based compensation expense, net of the amount capitalized in internally developed software, is as follows (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

​

​

September 30, 

​

September 30, 

​

    

2020

    

2019

    

2020

    

2019

Expense from time-based awards (a)

​

$

3,040

​

$

1,883

​

$

7,535

​

$

5,846

Expense from performance-based awards (a)(b)

​

​

374

​

​

(3,582)

​

​

844

​

​

(3,332)

Expense from bonus to be settled in shares (c)

​

​

—

​

​

687

​

​

—

​

​

2,505

Equity-based compensation capitalized

​

​

—

​

​

25

​

​

(32)

​

​

(159)

Equity-based compensation expense

​

$

3,414

​

$

(987)

​

$

8,347

​

$

4,860

​

​

​

​

​

​

​

​

​

​

​

​

​

(a)Includes awards granted to booj, First, wemlo and Gadberry employees and former owners at the time of acquisition.
(b)Expense recognized for performance-based awards is re-assessed each quarter based on expectations of achievement against the performance conditions. The Company granted certain performance awards to booj employees that were modified in September 2019 to extend the due date resulting in a significant reversal of expense in the third quarter of 2019. These awards substantially vested on December 31, 2019 and have no comparable amounts in 2020.
(c)In 2019, the Company revised its annual bonus plan so that a portion of the bonus for most employees would be settled in shares if the Company met certain performance metrics. The Company eliminated the 2020 corporate bonus plan as part of cost savings measures in connection with the COVID-19 pandemic.
Time-based Restricted Stock  
Restricted Stock Units

​

​

​

​

​

​

​

​

    

Shares

    

Weighted average
grant date fair
value per share

Balance, January 1, 2020

​

455,452

​

$

46.15

Granted

​

769,750

​

$

33.05

Shares vested (including tax withholding) (a)

​

(163,028)

​

$

45.58

Forfeited

​

(14,778)

​

$

37.20

Balance, September 30, 2020

​

1,047,396

​

$

36.73

​

​

​

​

​

​

(a)Pursuant to the terms of the RE/MAX Holdings, Inc. 2013 Omnibus Incentive Plan, shares withheld by the Company for the payment of the employee's tax withholding related to shares vesting are added back to the pool of shares available for future awards.
Performance-based Restricted Stock  
Restricted Stock Units

​

​

​

​

​

​

​

​

    

Shares

    

Weighted average
grant date fair
value per share

Balance, January 1, 2020

​

139,964

​

$

45.31

Granted

​

205,188

​

$

28.34

Shares vested (including tax withholding) (a)

​

(6,331)

​

$

38.49

Forfeited

​

(8,629)

​

$

39.77

Balance, September 30, 2020

​

330,192

​

$

35.04

​

​

​

​

​

​

(a)Represents the total participant target award.
v3.20.2
Segment Information (Tables)
 9 Months Ended
Sep. 30, 2020
Segment Information  
Schedule of Revenue from External Customers By Segment The following table presents revenue from external customers by segment (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

​

​

September 30, 

​

September 30, 

​

​

2020

​

2019

​

2020

​

2019

Continuing franchise fees (a)

​

$

22,799

​

$

24,096

​

$

61,471

​

$

72,191

Annual dues

​

​

8,638

​

​

8,835

​

​

26,304

​

​

26,508

Broker fees

​

​

15,457

​

​

13,292

​

​

35,327

​

​

35,339

Franchise sales and other revenue

​

​

4,058

​

​

4,858

​

​

16,126

​

​

17,252

Total RE/MAX Franchising

​

​

50,952

​

​

51,081

​

​

139,228

​

​

151,290

Continuing franchise fees

​

​

1,540

​

​

1,072

​

​

3,749

​

​

2,827

Franchise sales and other revenue

​

​

366

​

​

106

​

​

685

​

​

340

Total Motto Franchising

​

​

1,906

​

​

1,178

​

​

4,434

​

​

3,167

Marketing Funds fees (a)

​

​

17,290

​

​

18,034

​

​

46,577

​

​

54,866

Other

​

​

925

​

​

1,248

​

​

3,313

​

​

4,777

Total revenue

​

$

71,073

​

$

71,541

​

$

193,552

​

$

214,100

​

(a)For the Nine Months ended September 30, 2020, Continuing franchise fees and Marketing Funds fees declined primarily due to the temporary COVID-19 related financial support programs offered to franchisees.
Schedule of Revenue and Adjusted EBITDA of the Company's Reportable Segment

The following table presents a reconciliation of Adjusted EBITDA by segment to income before provision for income taxes (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

​

​

September 30, 

​

September 30, 

​

​

2020

​

2019

​

2020

​

2019

Adjusted EBITDA: RE/MAX Franchising

​

$

30,959

​

$

29,134

​

$

71,008

​

$

83,299

Adjusted EBITDA: Motto Franchising

​

​

(176)

​

​

(652)

​

​

(1,495)

​

​

(2,112)

Adjusted EBITDA: Other

​

​

(448)

​

​

(324)

​

​

(730)

​

​

(157)

Adjusted EBITDA: Consolidated

​

​

30,335

​

​

28,158

​

​

68,783

​

​

81,030

Gain (loss) on sale or disposition of assets

​

​

11

​

​

10

​

​

33

​

​

(353)

Impairment charge - leased assets (a)

​

​

(7,902)

​

​

—

​

​

(7,902)

​

​

—

Equity-based compensation expense

​

​

(3,414)

​

​

987

​

​

(8,347)

​

​

(4,860)

Acquisition-related expense (b)

​

​

(1,021)

​

​

(181)

​

​

(1,915)

​

​

(268)

Fair value adjustments to contingent consideration (c)

​

​

(250)

​

​

15

​

​

105

​

​

(330)

Interest income

​

​

25

​

​

412

​

​

328

​

​

1,074

Interest expense

​

​

(2,159)

​

​

(3,089)

​

​

(7,028)

​

​

(9,398)

Depreciation and amortization

​

​

(6,850)

​

​

(5,595)

​

​

(19,572)

​

​

(16,694)

Income before provision for income taxes

​

$

8,775

​

$

20,717

​

$

24,485

​

$

50,201

​

​

​

​

​

​

​

​

​

​

​

​

​

(a)Represents the impairment recognized on a portion of the Company’s corporate headquarters office building. See Note 2, Summary of Significant Accounting Policies for additional information.
(b)Acquisition-related expense includes personnel, legal, accounting, advisory and consulting fees incurred in connection with the acquisition and integration of acquired companies.
(c)Fair value adjustments to contingent consideration include amounts recognized for changes in the estimated fair value of the contingent consideration liabilities. See Note 9, Fair Value Measurements for additional information.
v3.20.2
Business and Organization (Details)
 9 Months Ended
Sep. 30, 2020
country
Office
item
Minimum  
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]  
Number of agents | item 130,000
Number of offices | Office 8,000
Number of countries in which entity operates | country 110
REMAX  
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]  
Percentage of Company consisting of franchises 100.00%
v3.20.2
Summary of Significant Accounting Policies - Schedule of Deferred Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2020
Annual dues    
Disaggregation of Revenue [Line Items]    
Balance at beginning of period   $ 15,982
New billings   24,840
Revenue recognized   (26,304)
Balance at the end of period $ 14,518 14,518
Revenue recognized 2,400 13,700
Franchise sales    
Disaggregation of Revenue [Line Items]    
Balance at beginning of period   25,884
New billings   6,029
Revenue recognized   (7,130)
Balance at the end of period 24,783 24,783
Revenue recognized $ 2,000 $ 6,600
v3.20.2
Summary of Significant Accounting Policies - Commissions Related to Franchise Sales (Details) - Commissions Related to Franchise Sales
$ in Thousands
 9 Months Ended
Sep. 30, 2020
USD ($)
Capitalized Contract Cost [Line Items]  
Balance at beginning of period $ 3,578
Expense recognized 1,076
Additions to contract cost for new activity 1,142
Balance at end of period $ 3,644
v3.20.2
Summary of Significant Accounting Policies - Disaggregated revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Disaggregation of Revenue [Line Items]        
Total revenue $ 71,073 $ 71,541 $ 193,552 $ 214,100
Company -owned Regions        
Disaggregation of Revenue [Line Items]        
Total revenue 40,226 39,693 104,632 115,423
Independent Regions        
Disaggregation of Revenue [Line Items]        
Total revenue 8,792 8,954 25,357 25,726
Global and Other        
Disaggregation of Revenue [Line Items]        
Total revenue 1,934 2,434 9,239 10,141
RE/MAX Franchising        
Disaggregation of Revenue [Line Items]        
Total revenue 50,952 51,081 139,228 151,290
Total Marketing Funds        
Disaggregation of Revenue [Line Items]        
Total revenue 17,290 18,034 46,577 54,866
Motto Franchising        
Disaggregation of Revenue [Line Items]        
Total revenue 1,906 1,178 4,434 3,167
Other        
Disaggregation of Revenue [Line Items]        
Total revenue 925 1,248 3,313 4,777
U.S. | RE/MAX Franchising        
Disaggregation of Revenue [Line Items]        
Total revenue 42,257 42,013 114,786 125,437
U.S. | Total Marketing Funds        
Disaggregation of Revenue [Line Items]        
Total revenue 15,701 16,163 41,948 49,216
Canada | RE/MAX Franchising        
Disaggregation of Revenue [Line Items]        
Total revenue 5,898 5,886 15,833 17,128
Canada | Total Marketing Funds        
Disaggregation of Revenue [Line Items]        
Total revenue 1,405 1,644 4,075 5,029
Global | RE/MAX Franchising        
Disaggregation of Revenue [Line Items]        
Total revenue 2,797 3,182 8,609 8,725
Global | Total Marketing Funds        
Disaggregation of Revenue [Line Items]        
Total revenue $ 184 $ 227 $ 554 $ 621
v3.20.2
Summary of Significant Accounting Policies - Transaction Price (Details)
$ in Thousands
Sep. 30, 2020
USD ($)
Annual Dues And Franchise Sales  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation revenue $ 39,301
Annual dues  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation revenue 14,518
Franchise sales  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation revenue 24,783
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | Annual Dues And Franchise Sales  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation revenue $ 8,346
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 3 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | Annual dues  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation revenue $ 6,500
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 3 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | Franchise sales  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation revenue $ 1,846
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 3 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | Annual Dues And Franchise Sales  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation revenue $ 14,590
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | Annual dues  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation revenue $ 8,018
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | Franchise sales  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation revenue $ 6,572
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Annual Dues And Franchise Sales  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation revenue $ 5,230
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Annual dues  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation revenue $ 0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Franchise sales  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation revenue $ 5,230
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Annual Dues And Franchise Sales  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation revenue $ 3,831
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Annual dues  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation revenue $ 0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Franchise sales  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation revenue $ 3,831
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Annual Dues And Franchise Sales  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation revenue $ 2,555
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Annual dues  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation revenue $ 0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Franchise sales  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation revenue $ 2,555
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Annual Dues And Franchise Sales  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation revenue $ 1,350
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Annual dues  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation revenue $ 0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Franchise sales  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation revenue $ 1,350
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Annual Dues And Franchise Sales  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation revenue $ 3,399
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Annual dues  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation revenue $ 0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Franchise sales  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation revenue $ 3,399
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1
v3.20.2
Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Sep. 30, 2019
Dec. 31, 2018
Cash, Cash Equivalents and Restricted Cash        
Cash and cash equivalents $ 89,135 $ 83,001    
Restricted cash 15,635 20,600    
Total cash, cash equivalents and restricted cash 104,770 103,601 $ 106,881 $ 59,974
Marketing funds        
Cash, Cash Equivalents and Restricted Cash        
Cash and cash equivalents 89,135 83,001    
Restricted cash 15,635 20,600    
Total cash, cash equivalents and restricted cash $ 104,770 $ 103,601    
v3.20.2
Summary of Significant Accounting Policies - Services Provided to Marketing Funds by RE/MAX Franchising (Details) - Marketing funds - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Cost charges $ 3,813 $ 3,532 $ 13,477 $ 10,209
Technology development - operating        
Cost charges 2,721 1,523 9,414 3,687
Technology development - capital        
Cost charges 104 1,420 864 3,884
Marketing staff and administrative services        
Cost charges $ 988 $ 589 $ 3,199 $ 2,638
v3.20.2
Summary of Significant Accounting Policies - Leases (Details)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
USD ($)
lease
Sep. 30, 2019
USD ($)
Sep. 30, 2020
USD ($)
lease
Sep. 30, 2019
USD ($)
Leases        
Number of franchisees' leases recognized by the Company 0   0  
Number of sublease agreements     4  
Impairment charge - leased assets | $ $ 7,902 $ 0 $ 7,902 $ 0
v3.20.2
Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements (Details)
$ in Thousands
Jan. 01, 2020
USD ($)
Restatement Adjustment | ASU 2016-13  
New Accounting Pronouncements or Change in Accounting Principle [Line Items]  
Cumulative effect adjustment from change in accounting principle $ 0
v3.20.2
Non-controlling Interest - Ownership of common units in RMCO (Details) - RMCO, LLC - shares
Sep. 30, 2020
Dec. 31, 2019
Shares    
Non-controlling interest ownership of common units in RMCO 12,559,600 12,559,600
Holdings outstanding Class A common stock (equal to Holdings common units in RMCO) 18,372,134 17,838,233
Total number of common stock units in RMCO 30,931,734 30,397,833
Ownership Percentage    
Non-controlling interest ownership of common units in RMCO as a percentage 40.60% 41.30%
Holdings outstanding Class A common stock (equal to Holdings common units in RMCO) 59.40% 58.70%
Total percentage of common stock units 100.00% 100.00%
v3.20.2
Non-controlling Interest - Net income reconciliation (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Jun. 30, 2020
Mar. 31, 2020
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Sep. 30, 2020
Sep. 30, 2019
Minority Interest [Line Items]                
Weighted average ownership percentage of noncontrolling interest 40.80%     41.30%     41.00% 41.40%
Total (as a percentage) 100.00%     100.00%     100.00% 100.00%
Income before provision for income taxes: Non-controlling interest $ 3,633     $ 8,565     $ 9,896 $ 20,763
Income before provision for income taxes 8,775     20,717     24,485 50,201
Provision for income taxes: Non-controlling interest (462)     (474)     (1,631) (1,261)
Provision for income taxes (2,051)     (3,453)     (6,547) (8,547)
Net income attributable to RE/MAX Holdings, Inc. 3,553     9,173     9,673 22,152
Net income: Non-controlling interest 3,171     8,091     8,265 19,502
Net income $ 6,724 $ 5,924 $ 5,290 $ 17,264 $ 16,133 $ 8,257 $ 17,938 $ 41,654
RMCO, LLC                
Minority Interest [Line Items]                
Weighted average ownership percentage of controlling interest 59.20%     58.70%     59.00% 58.60%
Income before provision for income taxes attributable to RE/MAX Holdings, Inc. $ 5,142     $ 12,152     $ 14,589 $ 29,438
Provision for income taxes attributable to RE/MAX Holdings, Inc. (1,589)     (2,979)     (4,916) (7,286)
Net income attributable to RE/MAX Holdings, Inc. $ 3,553     $ 9,173     $ 9,673 $ 22,152
v3.20.2
Non-controlling Interest - Distributions Paid or Payable (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Dividends Payable [Line Items]    
Distributions paid or payable to or on behalf of non-controlling unitholders $ 10,566 $ 11,460
Tax and other distributions    
Dividends Payable [Line Items]    
Distributions paid or payable to or on behalf of non-controlling unitholders 2,277 3,547
Dividend distributions    
Dividends Payable [Line Items]    
Distributions paid or payable to or on behalf of non-controlling unitholders $ 8,289 $ 7,913
v3.20.2
Earnings Per Share and Dividends - Reconciliation of the numerator and denominator used in basic and diluted EPS calculations (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Numerator        
Net income attributable to RE/MAX Holdings, Inc. $ 3,553 $ 9,173 $ 9,673 $ 22,152
Earnings per share of Class A common stock        
Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock, basic $ 0.20 $ 0.51 $ 0.53 $ 1.24
Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock, diluted $ 0.19 $ 0.51 $ 0.53 $ 1.24
RMCO, LLC        
Numerator        
Net income attributable to RE/MAX Holdings, Inc. $ 3,553 $ 9,173 $ 9,673 $ 22,152
Common Class A        
Denominator for basic net income per share of Class A common stock        
Weighted average shares of Class A common stock outstanding 18,196,454 17,826,332 18,098,227 17,803,708
Denominator for diluted net income per share of Class A common stock        
Weighted average shares of Class A common stock outstanding 18,196,454 17,826,332 18,098,227 17,803,708
Add dilutive effect of the following:        
Weighted average shares of Class A common stock outstanding, diluted 18,368,051 17,840,158 18,182,856 17,830,942
Earnings per share of Class A common stock        
Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock, basic $ 0.20 $ 0.51 $ 0.53 $ 1.24
Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock, diluted $ 0.19 $ 0.51 $ 0.53 $ 1.24
Restricted stock        
Add dilutive effect of the following:        
Restricted stock 171,597 13,826 84,629 27,234
v3.20.2
Earnings Per Share and Dividends - Additional Information (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 9 Months Ended
Nov. 04, 2020
Sep. 30, 2020
Jun. 30, 2020
Mar. 31, 2020
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Sep. 30, 2020
Sep. 30, 2019
Dividends Payable [Line Items]                  
Dividends to Class A common stockholders   $ 3,988 $ 3,987 $ 3,986 $ 3,745 $ 3,739 $ 3,740    
Common Class A                  
Dividends Payable [Line Items]                  
Cash dividends declared per share of Class A common stock   $ 0.22     $ 0.21     $ 0.66 $ 0.63
Quarterly dividend                  
Dividends Payable [Line Items]                  
Dividend to non-controlling unitholders   $ 2,763 $ 2,763 $ 2,763 $ 2,638 $ 2,637 $ 2,638 $ 8,289 $ 7,913
Quarterly dividend | Common Class A                  
Dividends Payable [Line Items]                  
Cash dividends declared per share of Class A common stock   $ 0.22 $ 0.22 $ 0.22 $ 0.21 $ 0.21 $ 0.21 $ 0.66 $ 0.63
Dividends to Class A common stockholders   $ 3,988 $ 3,987 $ 3,986 $ 3,745 $ 3,739 $ 3,740 $ 11,961 $ 11,224
Quarterly dividend | Common Class A | Subsequent Event                  
Dividends Payable [Line Items]                  
Cash dividends declared per share of Class A common stock $ 0.22                
v3.20.2
Acquisitions (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 10, 2020
Aug. 25, 2020
Sep. 30, 2020
Sep. 30, 2019
Dec. 31, 2019
Jan. 01, 2019
Business Acquisition [Line Items]            
Cash consideration     $ 10,627 $ 0    
Goodwill     $ 176,302   $ 159,038  
Gadberry            
Business Acquisition [Line Items]            
Cash consideration $ 4,600          
Maximum amount of equity based compensation to be earned over time 9,900          
Contingent consideration liability $ 900          
Gadberry | Minimum            
Business Acquisition [Line Items]            
Period over which equity based compensation will be accounted for into the future (in years) 2 years          
Gadberry | Maximum            
Business Acquisition [Line Items]            
Period over which equity based compensation will be accounted for into the future (in years) 3 years          
Gadberry | Common Class A            
Business Acquisition [Line Items]            
Consideration transferred $ 5,500          
Wemlo            
Business Acquisition [Line Items]            
Cash consideration   $ 6,100        
Maximum amount of equity based compensation to be earned over time   $ 6,700        
Period over which equity based compensation will be accounted for into the future (in years)   3 years        
Goodwill   $ 14,400        
Other intangible assets   6,300        
Wemlo | Common Class A            
Business Acquisition [Line Items]            
Consideration transferred   $ 3,300        
Marketing funds            
Purchase Price Allocation            
Restricted cash           $ 28,495
Other current assets           8,472
Property and equipment           788
Other assets, net of current portion           126
Total assets acquired           37,881
Other current liabilities           37,881
Total liabilities assumed           $ 37,881
v3.20.2
Intangible Assets and Goodwill - Components of Company's Intangible Assets (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Dec. 31, 2019
Finite Lived Intangible Assets [Line Items]          
Net Balance $ 76,065   $ 76,065   $ 87,670
Amortization expense 6,400 $ 5,200 18,300 $ 15,500  
Franchise agreements          
Finite Lived Intangible Assets [Line Items]          
Initial Cost 180,867   180,867   180,867
Accumulated Amortization (104,802)   (104,802)   (93,197)
Net Balance 76,065   $ 76,065   87,670
Franchise agreements | Weighted Average          
Finite Lived Intangible Assets [Line Items]          
Useful life of intangible assets     12 years 6 months    
Other intangible assets          
Finite Lived Intangible Assets [Line Items]          
Initial Cost 52,552   $ 52,552   45,484
Accumulated Amortization (21,128)   (21,128)   (13,169)
Net Balance 31,424   $ 31,424   32,315
Other intangible assets | Weighted Average          
Finite Lived Intangible Assets [Line Items]          
Useful life of intangible assets     4 years 7 months 6 days    
Software          
Finite Lived Intangible Assets [Line Items]          
Initial Cost 42,251   $ 42,251   36,680
Accumulated Amortization (15,952)   (15,952)   (9,653)
Net Balance 26,299   $ 26,299   27,027
Software | Weighted Average          
Finite Lived Intangible Assets [Line Items]          
Useful life of intangible assets     4 years 4 months 24 days    
Trademarks          
Finite Lived Intangible Assets [Line Items]          
Initial Cost 2,311   $ 2,311   1,904
Accumulated Amortization (1,204)   (1,204)   (1,037)
Net Balance 1,107   $ 1,107   867
Trademarks | Weighted Average          
Finite Lived Intangible Assets [Line Items]          
Useful life of intangible assets     8 years 3 months 18 days    
Software Development          
Finite Lived Intangible Assets [Line Items]          
Capitalized software development costs 800   $ 800   10,500
Non-compete agreements          
Finite Lived Intangible Assets [Line Items]          
Initial Cost 3,920   3,920   3,700
Accumulated Amortization (2,479)   (2,479)   (1,546)
Net Balance 1,441   $ 1,441   2,154
Non-compete agreements | Weighted Average          
Finite Lived Intangible Assets [Line Items]          
Useful life of intangible assets     4 years 4 months 24 days    
Training materials          
Finite Lived Intangible Assets [Line Items]          
Initial Cost 2,400   $ 2,400   2,400
Accumulated Amortization (1,000)   (1,000)   (640)
Net Balance 1,400   $ 1,400   1,760
Training materials | Weighted Average          
Finite Lived Intangible Assets [Line Items]          
Useful life of intangible assets     5 years    
Other          
Finite Lived Intangible Assets [Line Items]          
Initial Cost 1,670   $ 1,670   800
Accumulated Amortization (493)   (493)   (293)
Net Balance $ 1,177   $ 1,177   $ 507
Other | Weighted Average          
Finite Lived Intangible Assets [Line Items]          
Useful life of intangible assets     3 years 9 months 18 days    
v3.20.2
Intangible Assets and Goodwill - Estimated Future Amortization of Intangible Assets, Other Than Goodwill (Details)
$ in Thousands
Sep. 30, 2020
USD ($)
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]  
Remainder of 2020 $ 7,271
2021 27,622
2022 21,004
2023 16,817
2024 14,150
Thereafter 20,625
Estimated future amortization expense over next five years $ 107,489
v3.20.2
Intangible Assets and Goodwill - Schedule of Changes in Goodwill (Details)
$ in Thousands
 9 Months Ended
Sep. 30, 2020
USD ($)
Changes to goodwill  
Beginning Balance $ 159,038
Goodwill recognized from acquisitions 17,349
Effect of changes in foreign currency exchange rates (85)
Ending Balance 176,302
RE/MAX Franchising  
Changes to goodwill  
Beginning Balance 147,238
Goodwill recognized from acquisitions 2,926
Effect of changes in foreign currency exchange rates (85)
Ending Balance 150,079
Motto Franchising  
Changes to goodwill  
Beginning Balance 11,800
Goodwill recognized from acquisitions 6,837
Effect of changes in foreign currency exchange rates 0
Ending Balance 18,637
Other  
Changes to goodwill  
Beginning Balance 0
Goodwill recognized from acquisitions 7,586
Effect of changes in foreign currency exchange rates 0
Ending Balance $ 7,586
v3.20.2
Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Accrued Liabilities.    
Marketing Funds $ 41,709 $ 39,672
Accrued payroll and related employee costs 3,443 11,900
Accrued taxes 1,833 2,451
Accrued professional fees 1,895 2,047
Other 3,193 4,093
Accrued liabilities $ 52,073 $ 60,163
v3.20.2
Debt - Schedule of Debt (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Debt Instrument [Line Items]    
Senior Secured Credit Facility $ 225,739  
Other long-term financing 139 $ 362
Less unamortized debt issuance costs (957) (1,182)
Less unamortized debt discount costs (699) (862)
Less current portion (2,489) (2,648)
Debt, net of current portion 221,594 223,033
Senior Secured Credit Facility    
Debt Instrument [Line Items]    
Senior Secured Credit Facility $ 225,600 $ 227,363
v3.20.2
Debt - Schedule of Maturities of Debt (Details)
$ in Thousands
Sep. 30, 2020
USD ($)
Debt  
Remainder of 2020 $ 663
2021 2,414
2022 2,350
2023 220,312
Long term debt $ 225,739
v3.20.2
Debt - Additional Information (Details) - USD ($)
$ in Millions
Sep. 30, 2020
Dec. 31, 2016
Term loan    
Debt Instrument [Line Items]    
Debt instrument, interest rate 3.50%  
Term loan | Senior Secured Credit Facility    
Debt Instrument [Line Items]    
Notes Payable to Bank   $ 235.0
Revolving loan facility    
Debt Instrument [Line Items]    
Amounts drawn on line of credit $ 0.0  
Revolving loan facility | Senior Secured Credit Facility    
Debt Instrument [Line Items]    
Credit facility, borrowing capacity   $ 10.0
v3.20.2
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details)
$ in Thousands
 9 Months Ended
Sep. 30, 2020
USD ($)
item
Sep. 10, 2020
USD ($)
Dec. 31, 2019
USD ($)
Measured on a recurring basis      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Contingent consideration liability $ 5,830   $ 5,005
Level 1 | Measured on a recurring basis      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Contingent consideration liability 0   0
Level 2 | Measured on a recurring basis      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Contingent consideration liability 0   0
Level 3 | Measured on a recurring basis      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Contingent consideration liability $ 5,830   $ 5,005
Gadberry      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Contingent consideration liability   $ 900  
Minimum      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assumed number of franchises sold annually | item 60    
Maximum      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assumed number of franchises sold annually | item 80    
Weighted Average      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assumed number of franchises sold annually | item 75    
Gross Receipts 8 Percent [Member]      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Percentage of gross revenues to be paid yearly 8.00%    
Franchise Sale Reduction, Percentage 10    
Change in discount rate 1.00%    
Business Combination, Contingent Consideration, Liability, Measurement Input [Extensible List] us-gapp:MeasurementInputDiscountRateMember    
Business Combination, Contingent Consideration, Liability, Measurement Input 15    
Gross Receipts 8 Percent [Member] | Ten Percent Reduction In Franchise Sales [Member]      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Deferred revenue, current and noncurrent $ 200    
Gross Receipts 8 Percent [Member] | One Percent Change To Discount Rate [Member]      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Deferred revenue, current and noncurrent $ 100    
v3.20.2
Fair Value Measurements - Reconciliation of Assets and Liabilities Measured Using Significant Unobservable Inputs (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Sep. 10, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Fair value adjustment $ 250 $ (15) $ (105) $ 330  
Measured on a recurring basis          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Balance at Beginning     5,005    
Contingent consideration liability 5,830   5,005    
Balance at Ending 5,830   5,830    
Gadberry          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Contingent consideration liability         $ 900
Level 3 | Measured on a recurring basis          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Balance at Beginning     5,005    
Fair value adjustment     (105)    
Contingent consideration liability 5,830   5,005    
Balance at Ending $ 5,830   5,830    
Level 3 | Gadberry | Measured on a recurring basis          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Fair value adjustment     $ 930    
v3.20.2
Fair Value Measurements - Schedule of Senior Secured Credit Facility (Details) - Senior Secured Credit Facility - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Carrying amounts    
Debt Instrument [Line Items]    
Long term debt, carrying amount $ 223,944 $ 225,319
Level 2 | Estimated fair value    
Debt Instrument [Line Items]    
Long term debt, fair value $ 222,216 $ 227,363
v3.20.2
Equity-Based Compensation (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Employee stock-based compensation expense        
Equity-based compensation capitalized $ 0 $ 25 $ (32) $ (159)
Equity-based compensation expense 3,414 (987) 8,347 4,860
Time-based Restricted Stock        
Employee stock-based compensation expense        
Equity-based compensation expense $ 3,040 1,883 $ 7,535 5,846
Restricted Stock Units        
Nonvested at beginning of period     455,452  
Granted     769,750  
Shares vested (including tax withholding)     (163,028)  
Forfeited     (14,778)  
Nonvested at end of period 1,047,396   1,047,396  
Nonvested at beginning of period, Weighted average grant date fair value per share     $ 46.15  
Granted, Weighted average grant date fair value per share     33.05  
Shares vested (including tax withholding) , Weighted average grant date fair value per share     45.58  
Forfeited, Weighted average grant date fair value per share     37.20  
Nonvested at end of period, Weighted average grant date fair value per share $ 36.73   $ 36.73  
Unrecognized compensation cost $ 30,000   $ 30,000  
Period for recognition of RSU compensation expense     2 years 2 months 12 days  
Performance-based Restricted Stock        
Employee stock-based compensation expense        
Equity-based compensation expense $ 374 (3,582) $ 844 (3,332)
Restricted Stock Units        
Nonvested at beginning of period     139,964  
Granted     205,188  
Shares vested (including tax withholding)     (6,331)  
Forfeited     (8,629)  
Nonvested at end of period 330,192   330,192  
Nonvested at beginning of period, Weighted average grant date fair value per share     $ 45.31  
Granted, Weighted average grant date fair value per share     28.34  
Shares vested (including tax withholding) , Weighted average grant date fair value per share     38.49  
Forfeited, Weighted average grant date fair value per share     39.77  
Nonvested at end of period, Weighted average grant date fair value per share $ 35.04   $ 35.04  
Unrecognized compensation cost $ 2,900   $ 2,900  
Period for recognition of RSU compensation expense     2 years  
Bonus settled in shares        
Employee stock-based compensation expense        
Equity-based compensation expense $ 0 $ 687 $ 0 $ 2,505
v3.20.2
Segment Information (Details)
 9 Months Ended
Sep. 30, 2020
segment
Segment Information  
Number of Operating Segments 4
v3.20.2
Segment Information - Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Segment Reporting Information        
Total revenue $ 71,073 $ 71,541 $ 193,552 $ 214,100
Other        
Segment Reporting Information        
Total revenue 925 1,248 3,313 4,777
Operating Segments | RE/MAX Franchising        
Segment Reporting Information        
Total revenue 50,952 51,081 139,228 151,290
Operating Segments | Motto Franchising        
Segment Reporting Information        
Total revenue 1,906 1,178 4,434 3,167
Operating Segments | Marketing Funds fees        
Segment Reporting Information        
Total revenue 17,290 18,034 46,577 54,866
Operating Segments | Other        
Segment Reporting Information        
Total revenue 925 1,248 3,313 4,777
Continuing franchise fees        
Segment Reporting Information        
Total revenue 24,339 25,168 65,220 75,018
Continuing franchise fees | Operating Segments | RE/MAX Franchising        
Segment Reporting Information        
Total revenue 22,799 24,096 61,471 72,191
Continuing franchise fees | Operating Segments | Motto Franchising        
Segment Reporting Information        
Total revenue 1,540 1,072 3,749 2,827
Annual dues        
Segment Reporting Information        
Total revenue 8,638 8,835 26,304 26,508
Annual dues | Operating Segments | RE/MAX Franchising        
Segment Reporting Information        
Total revenue 8,638 8,835 26,304 26,508
Broker fees        
Segment Reporting Information        
Total revenue 15,457 13,292 35,327 35,339
Broker fees | Operating Segments | RE/MAX Franchising        
Segment Reporting Information        
Total revenue 15,457 13,292 35,327 35,339
Franchise sales and other revenue        
Segment Reporting Information        
Total revenue 5,349 6,212 20,124 22,369
Franchise sales and other revenue | Operating Segments | RE/MAX Franchising        
Segment Reporting Information        
Total revenue 4,058 4,858 16,126 17,252
Franchise sales and other revenue | Operating Segments | Motto Franchising        
Segment Reporting Information        
Total revenue $ 366 $ 106 $ 685 $ 340
v3.20.2
Segment Information - Reconciliation (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated        
Adjusted EBITDA $ 30,335 $ 28,158 $ 68,783 $ 81,030
Gain (loss) on sale or disposition of assets 11 10 33 (353)
Impairment charge - leased assets (7,902) 0 (7,902) 0
Equity-based compensation expense (3,414) 987 (8,347) (4,860)
Acquisition-related expense (1,021) (181) (1,915) (268)
Fair value adjustments to contingent consideration (250) 15 105 (330)
Interest income 25 412 328 1,074
Interest expense (2,159) (3,089) (7,028) (9,398)
Depreciation and amortization (6,850) (5,595) (19,572) (16,694)
Income before provision for income taxes 8,775 20,717 24,485 50,201
RE/MAX Franchising        
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated        
Adjusted EBITDA 30,959 29,134 71,008 83,299
Motto Franchising        
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated        
Adjusted EBITDA (176) (652) (1,495) (2,112)
Other        
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated        
Adjusted EBITDA $ (448) $ (324) $ (730) $ (157)