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Boston Real Estate News: RE/Max Loses $25M
Just because the third quarter was rich in revenue for some brokerages doesn’t mean profits were something to brag about.
RE/MAX revenue and the somewhat dubious metric of “adjusted EBITDA” reached all-time highs last quarter but its net profits and agent growth fell short of expectations, its holding company announced.
Real Estate Loss for RE/MAX
The brokerage’s adjusted EBITDA reached $35 million and its adjusted earnings per diluted share was $0.71.
RE/MAX attributed the growth to the RE/MAX INTEGRA North American regions acquisition, fewer agent recruiting initiatives and increased broker fees stemming from rising home prices.
For other brokerages, a boost in agent growth did some good. In its earnings call early last month, eXp World Holdings announced that its brokerage’s revenue had reached another all-time high of $1.1 billion.
Such gains were largely driven by agent growth, which increased 82 percent to 65,269 from the third quarter of 2020. Closed residential transactions increased 72 percent to 130,029 and transaction volume nearly doubled, rising 97 percent to $46.6 billion.
Net income for eXp increased 60 percent to $23.8 million, and gross profit increased 70 percent to $79.5 million. The adjusted EBITDA increased 6 percent to $23.1 million.
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Boston real estate
RE/Max For the year, revenue was $266 million, down from $282 million in 2019.
Net income from October through December was $1.29 million, down 55 percent from $2.88 million in 2019. For the year, net income was $10.9 million, down from $25 million in 2019.
“Selling, operating and administrative expenses increased primarily due to higher equity-based compensation expense, discretionary bonuses, and increased personnel costs largely from acquisitions,” the company noted. It said some of those costs were offset by belt-tightening measures implemented throughout 2020.
Near the end of the third quarter, the brokerage acquired two companies: Wemlo, a 20-month-old mortgage processing startup, and Gadberry Group, a location intelligence data firm that RE/MAX has worked with since 2019.
