Valentin Alvar

Valentin Alvar requested clarification on the selling, operating, and administrative (SO&A) expenses, seeking to differentiate between ongoing and one-time cost pressures to better understand the future run rate. He also asked if RE/MAX is more likely to engage in additional share repurchases, considering the current stock price and mortgage rates, compared to Q4.

Answer

CFO Karri Callahan explained that Q4 SO&A expenses included a one-time charge of approximately $1 million for asset disposal, which will not recur. She indicated that the normalized Q4 run rate should be consistent for Q2-Q4 2026, with Q1 typically higher due to increased investment for the annual agent convention. Regarding share repurchases, Ms. Callahan stated that being below the 3.5x leverage level provides increased flexibility for capital allocation, and while taking a prudent approach, return of capital is 'more back on the table,' balanced with reinvesting in the business.

Valentin Alvar asked for clarification on ongoing versus one-time cost pressures within selling, operating, and administrative (SO&A) expenses to understand the run rate, and whether the company is more likely to engage in additional share repurchases given its current stock price and mortgage rates.

Answer

Karri Callahan, CFO, identified a $1 million one-time charge in Q4 for asset disposal, indicating that the normalized Q4 SO&A run rate should be consistent for Q2-Q4 2026, with Q1 typically higher due to convention investments. Regarding capital allocation, she noted increased flexibility due to leverage remaining below 3.5x, balancing share repurchases with strategic reinvestment for growth.