Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2024

Summary of Significant Accounting Policies

Schedule of deferred revenue for franchise sales and annual dues

The activity consists of the following (in thousands):

	Balance at				Revenue		Balance at
	January 1, 2024		New billings		recognized (a)		March 31, 2024
Franchise sales	$	24,613	$	1,299	$	(2,149)	$	23,763
Annual dues		13,282		8,911		(8,225)		13,968
Other		2,789		5,402		(5,797)		2,394
	$	40,684	$	15,612	$	(16,171)	$	40,125

(a) Revenue recognized related to the beginning balance for Franchise sales and Annual dues were $2.1 million and $6.1 million, respectively, for the three months ended March 31, 2024.

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, 2024		for new activity		recognized		March 31, 2024
Capitalized contract costs for commissions	$	4,255	$	357	$	(651)	$	3,961

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 2024		2025		2026		2027		2028		2029		Thereafter		Total
Franchise sales	$	5,178	$	5,940	$	4,661	$	3,302	$	1,877	$	742	$	2,063	$	23,763
Annual dues		13,294		674		—		—		—		—		—		13,968
Total	$	18,472	$	6,614	$	4,661	$	3,302	$	1,877	$	742	$	2,063	$	37,731

Schedule of disaggregated revenue

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

	Three Months Ended
	March 31,
	2024		2023
U.S. Company-Owned Regions	$	31,739	$	33,861
U.S. Independent Regions		1,468		1,476
Canada Company-Owned Regions		9,903		9,798
Canada Independent Regions		728		724
Global		3,468		3,198
Fee revenue (a)		47,306		49,057
Franchise sales and other revenue (b)		7,142		11,573
Total Real Estate		54,448		60,630
U.S.		15,366		16,305
Canada		4,616		4,763
Global		224		274
Total Marketing Funds		20,206		21,342
Mortgage (c)		3,633		3,188
Other (c)		—		241
Total	$	78,287	$	85,401

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

(b) Franchise sales and other revenue is derived primarily within the U.S. The decline in other revenue is mostly attributable to a reduction in revenue from the Company’s annual RE/MAX agent convention as a result of lower attendance due the 50^th anniversary celebration in the prior year.

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

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, 2024		December 31, 2023
Cash and cash equivalents	$	82,077	$	82,623
Restricted cash:
Marketing Funds (a)		17,859		15,640
Settlement Fund (b)		27,500		27,500
Total cash, cash equivalents and restricted cash	$	127,436	$	125,763

(a) All cash held by the Marketing Funds is contractually restricted, pursuant to the applicable franchise agreements.

(b) Represents the net amounts held in the Settlement Fund as part of the settlement of industry class-action lawsuits. See Note 11, Commitments and Contingencies for additional information.

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,
	2024		2023
Technology − operating	$	1,050	$	1,169
Technology − capital(a)		—		(203)
Marketing staff and administrative services		1,505		1,492
Total	$	2,555	$	2,458

(a) During the first quarter of 2023, the Company determined that certain development projects were no longer needed and therefore $0.2 million, reflecting the cost of work in process assets that would no longer be placed in service, was refunded to the Marketing Funds.