Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2022

Summary of Significant Accounting Policies

Schedule of deferred revenue for franchise sales and annual dues

Deferred revenue is primarily driven by Franchise sales and Annual dues, as discussed above, and is included in “Deferred revenue” and “Deferred revenue, net of current portion” on the Consolidated Balance Sheets. Other deferred revenue is primarily related to event-based revenue. The activity consists of the following (in thousands):
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	Balance at				Revenue		Balance at
	January 1, 2022		New billings		recognized (a)		March 31, 2022
Franchise sales	$	26,043	$	2,685	$	(2,141)	$	26,587
Annual dues		15,020		10,053		(8,920)		16,153
Other		5,044		4,219		(8,432)		831
	$	46,107	$	16,957	$	(19,493)	$	43,571

(a) Revenue recognized related to the beginning balance for Franchise sales and Annual dues were $2.1 million and $6.7 million, respectively, for the three months ended March 31, 2022.

Schedule of 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):

			Additions to
	Balance at		contract cost		Expense		Balance at
	January 1, 2022		for new activity		recognized		March 31, 2022
Three Months Ended March 31, 2022	$	4,010	$	437	$	(501)	$	3,946

Schedule of disaggregated revenue

In the following table, segment revenue is disaggregated by Company-Owned or Independent Regions, where applicable, and by geographical area (in thousands):

	Three Months Ended March 31,
	2022		2021
U.S. Company-Owned Regions (a)	$	39,154	$	32,546
U.S. Independent Regions (a)		1,701		3,288
Canada Company-Owned Regions (a)		10,475		3,554
Canada Independent Regions (a)		703		2,205
Global		3,092		2,641
Fee revenue (b)		55,125		44,234
Franchise sales and other revenue (c)		9,612		6,920
Total Real Estate		64,737		51,154
U.S. (a)		17,559		16,182
Canada (a)		5,013		1,737
Global		279		226
Total Marketing Funds		22,851		18,145
Mortgage (d)		3,028		2,323
Other (d)		388		673
Total	$	91,004	$	72,295

(a) In July 2021, the Company acquired the operating companies of the North America regions of RE/MAX INTEGRA (“INTEGRA”). Fee revenue from these regions were previously recognized in the U.S. and Canada Independent Regions. See Note 5, Acquisitions, for information related to this transaction.

(b) Fee revenue includes Continuing franchise fees, Annual dues and Broker fees.

(c) Franchise sales and other revenue is derived primarily within the U.S.

(d) Revenue from Mortgage and Other are derived exclusively within the U.S.

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 2022		2023		2024		2025		2026		2027		Thereafter		Total
Annual dues	$	15,370	$	783	$	—	$	—	$	—	$	—	$	—	$	16,153
Franchise sales		5,510		6,183		4,994		3,737		2,331		1,184		2,648		26,587
Total	$	20,880	$	6,966	$	4,994	$	3,737	$	2,331	$	1,184	$	2,648	$	42,740

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):

	March 31, 2022		December 31, 2021
Cash and cash equivalents	$	118,495	$	126,270
Restricted cash		36,889		32,129
Total cash, cash equivalents and restricted cash	$	155,384	$	158,399

Schedule of cost charges to intersegment

Costs charged from Real Estate to the Marketing Funds are as follows (in thousands):

	Three Months Ended
	March 31,
	2022		2021
Technology − operating	$	4,224	$	3,600
Technology − capital		631		180
Marketing staff and administrative services		1,541		1,118
Total	$	6,396	$	4,898