Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 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)		September 30, 2024
Franchise sales	$	24,613	$	3,892	$	(6,327)	$	22,178
Annual dues		13,282		23,897		(24,345)		12,834
Other		2,789		14,555		(14,249)		3,095
	$	40,684	$	42,344	$	(44,921)	$	38,107

(a) Revenue recognized related to the beginning balance for Franchise sales and Annual dues were $6.1 million and $12.2 million, respectively, for the nine months ended September 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		September 30, 2024
Capitalized contract costs for commissions	$	4,225	$	1,324	$	(2,034)	$	3,515

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	$	1,739	$	6,342	$	5,098	$	3,780	$	2,393	$	1,066	$	1,760	$	22,178
Annual dues		6,033		6,801		—		—		—		—		—		12,834
Total	$	7,772	$	13,143	$	5,098	$	3,780	$	2,393	$	1,066	$	1,760	$	35,012

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				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
U.S. Company-Owned Regions	$	34,378	$	35,504	$	100,094	$	105,440
U.S. Independent Regions		1,549		1,668		4,591		4,896
Canada Company-Owned Regions		10,717		10,607		31,223		30,946
Canada Independent Regions		707		721		2,094		2,168
Global		3,659		3,251		10,636		9,653
Fee revenue (a)		51,010		51,751		148,638		153,103
Franchise sales and other revenue (b)		3,629		4,812		15,198		21,649
Total Real Estate		54,639		56,563		163,836		174,752
U.S.		14,889		15,638		45,219		48,043
Canada		4,932		4,956		14,352		14,440
Global		277		259		760		789
Total Marketing Funds		20,098		20,853		60,331		63,272
Mortgage (c)		3,741		3,640		11,051		10,444
Other (c)		—		167		—		603
Total	$	78,478	$	81,223	$	235,218	$	249,071

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

(b) Franchise sales and other revenue is mostly derived within the U.S. The decline in other revenue is primarily 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 and from revenue from previous acquisitions.

(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):

	September 30, 2024		December 31, 2023
Cash and cash equivalents	$	83,779	$	82,623
Restricted cash:
Marketing Funds (a)		17,599		15,640
Settlement Fund (b)		55,000		27,500
Total cash, cash equivalents and restricted cash	$	156,378	$	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				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Technology − operating	$	1,066	$	1,169	$	3,166	$	3,507
Technology − capital(a)		—		—		—		(203)
Marketing staff and administrative services		1,507		1,441		4,504		4,416
Total	$	2,573	$	2,610	$	7,670	$	7,720

(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.