Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 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)		June 30, 2024
Franchise sales	$	24,613	$	2,590	$	(4,442)	$	22,761
Annual dues		13,282		16,670		(16,376)		13,576
Other		2,789		10,705		(9,946)		3,548
	$	40,684	$	29,965	$	(30,764)	$	39,885

(a) Revenue recognized related to the beginning balance for Franchise sales and Annual dues were $4.4 million and $10.0 million, respectively, for the six months ended June 30, 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		June 30, 2024
Capitalized contract costs for commissions	$	4,225	$	801	$	(1,422)	$	3,604

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	$	3,437	$	6,068	$	4,806	$	3,480	$	2,084	$	833	$	2,053	$	22,761
Annual dues		10,563		3,013		—		—		—		—		—		13,576
Total	$	14,000	$	9,081	$	4,806	$	3,480	$	2,084	$	833	$	2,053	$	36,337

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				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
U.S. Company-Owned Regions	$	33,977	$	36,075	$	65,716	$	69,936
U.S. Independent Regions		1,574		1,752		3,042		3,228
Canada Company-Owned Regions		10,603		10,541		20,506		20,339
Canada Independent Regions		659		723		1,387		1,447
Global		3,509		3,204		6,977		6,402
Fee revenue (a)		50,322		52,295		97,628		101,352
Franchise sales and other revenue (b)		4,427		5,264		11,569		16,837
Total Real Estate		54,749		57,559		109,197		118,189
U.S.		14,964		16,100		30,330		32,405
Canada		4,804		4,721		9,420		9,484
Global		259		256		483		530
Total Marketing Funds		20,027		21,077		40,233		42,419
Mortgage (c)		3,677		3,616		7,310		6,804
Other (c)		—		195		—		436
Total	$	78,453	$	82,447	$	156,740	$	167,848

(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):

	June 30, 2024		December 31, 2023
Cash and cash equivalents	$	66,064	$	82,623
Restricted cash:
Marketing Funds (a)		19,610		15,640
Settlement Fund (b)		55,000		27,500
Total cash, cash equivalents and restricted cash	$	140,674	$	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				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Technology − operating	$	1,050	$	1,169	$	2,100	$	2,338
Technology − capital(a)		—		—		—		(203)
Marketing staff and administrative services		1,492		1,483		2,997		2,975
Total	$	2,542	$	2,652	$	5,097	$	5,110

(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.