Segment Information (Tables)

9 Months Ended

Sep. 30, 2024

Segment Information

Schedule of Revenue from External Customers By Segment

The following table presents revenue from external customers by segment (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Continuing franchise fees	$	28,126	$	29,040	$	84,134	$	87,974
Annual dues		7,969		8,456		24,345		25,661
Broker fees		14,915		14,255		40,159		39,468
Franchise sales and other revenue		3,629		4,812		15,198		21,649
Total Real Estate		54,639		56,563		163,836		174,752
Continuing franchise fees		2,672		2,794		8,089		8,037
Franchise sales and other revenue		1,069		846		2,962		2,407
Total Mortgage		3,741		3,640		11,051		10,444
Marketing Funds fees		20,098		20,853		60,331		63,272
Other		—		167		—		603
Total revenue	$	78,478	$	81,223	$	235,218	$	249,071

Schedule of Revenue and Adjusted EBITDA of the Company's Reportable Segment

The following table presents a reconciliation of Adjusted EBITDA by segment to income (loss) before provision for income taxes (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Adjusted EBITDA: Real Estate	$	28,444	$	28,400	$	78,418	$	79,813
Adjusted EBITDA: Mortgage		(1,120)		(1,486)		(3,962)		(5,540)
Adjusted EBITDA: Other		(34)		(166)		(97)		(961)
Adjusted EBITDA: Consolidated		27,290		26,748		74,359		73,312
Settlement charge (a)		—		(55,000)		—		(55,000)
Equity-based compensation expense		(4,618)		(4,891)		(14,443)		(14,050)
Acquisition-related expense (b)		—		(59)		—		(160)
Fair value adjustments to contingent consideration (c)		437		280		300		379
Restructuring charges (d)		18		(4,278)		59		(4,245)
Gain on reduction in tax receivable agreement liability (e)		—		24,917		—		24,917
Other (f)		(605)		(395)		(2,444)		(1,471)
Interest income		885		1,173		2,835		3,318
Interest expense		(9,249)		(9,292)		(27,696)		(26,377)
Depreciation and amortization		(7,237)		(8,195)		(22,489)		(24,236)
Income (loss) before provision for income taxes	$	6,921	$	(28,992)	$	10,481	$	(23,613)

(a) Represents the settlement of the Nationwide Claims. See Note 11, Commitments and Contingencies for additional information.

(b) Acquisition-related expense includes personnel, legal, accounting, advisory and consulting fees incurred in connection with the acquisition activities and integration of acquired companies.

(c) Fair value adjustments to contingent consideration include amounts recognized for changes in the estimated fair value of the contingent consideration liabilities. See Note 8, Fair Value Measurements for additional information.

(d) During the third quarter of 2023, the Company announced a reduction in force and reorganization intended to streamline the Company’s operations and yield cost savings over the long term. See Note 2, Summary of Significant Accounting Policies for additional information.

(e) Gain on reduction in tax receivable agreement liability is a result of a valuation allowance on deferred tax assets recorded during the third quarter of 2023. See Note 9, Income Taxes for additional information.

(f) Other is primarily made up of employee retention related expenses from the Company's CEO transition.

Summary of Total Assets by Segment

The following table presents total assets of the Company’s segments (in thousands):

	September 30, 2024		December 31, 2023
Real Estate (a)	$	503,825	$	473,659
Marketing Funds (a)		31,644		69,710
Mortgage		43,164		33,722
Other		16		59
Total assets	$	578,649	$	577,150

(a) Change in assets primarily due to settlement of intercompany balances between segments.