Real estate franchise company RE/MAX (NYSE: RMAX) fell short of the market’s revenue expectations in Q1 CY2026, with sales falling 5.7% year on year to $70.23 million. Its non-GAAP profit of $0.16 per share was 27.3% below analysts’ consensus estimates.
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RE/MAX (RMAX) Q1 CY2026 Highlights:
- Revenue: $70.23 million vs analyst estimates of $72.17 million (5.7% year-on-year decline, 2.7% miss)
- Adjusted EPS: $0.16 vs analyst expectations of $0.22 (27.3% miss)
- Adjusted EBITDA: $15.56 million vs analyst estimates of $18.72 million (22.2% margin, 16.9% miss)
- Operating Margin: -11.1%, down from 7.2% in the same quarter last year
- Free Cash Flow was -$4.27 million compared to -$1.16 million in the same quarter last year
- Agents: up 3,066 year on year
- Market Capitalization: $234.8 million
Adjusted free cash flow after tax and non-dividend distributions to RIHI, Inc. ("RIHI"), an entity majority owned and controlled by David Liniger, our Chairman and Co-Founder, and by Gail Liniger, our Vice Chair Emerita and Co-Founder, is calculated as adjusted free cash flow less tax and other non-dividend distributions paid to RIHI (the non-controlling interest holder) to enable RIHI to satisfy its income tax obligations.
Company Overview
Short for Real Estate Maximums, RE/MAX (NYSE: RMAX) operates a real estate franchise network spanning over 100 countries and territories.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Unfortunately, RE/MAX’s 1.4% annualized revenue growth over the last five years was weak. This fell short of our benchmarks and is a tough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. RE/MAX’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 5% annually. 
RE/MAX also discloses its number of agents, which reached 149,192 in the latest quarter. Over the last two years, RE/MAX’s agents averaged 1.5% year-on-year growth. Because this number is higher than its revenue growth during the same period, we can see the company’s monetization has fallen. 
This quarter, RE/MAX missed Wall Street’s estimates and reported a rather uninspiring 5.7% year-on-year revenue decline, generating $70.23 million of revenue.
Looking ahead, sell-side analysts expect revenue to grow 1.1% over the next 12 months. While this projection suggests its newer products and services will spur better top-line performance, it is still below average for the sector.
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Operating Margin
Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.
RE/MAX’s operating margin has shrunk over the last 12 months and averaged 12.7% over the last two years. The company’s profitability was mediocre for a consumer discretionary business and shows it couldn’t pass its higher operating expenses onto its customers.
This quarter, RE/MAX generated an operating margin profit margin of negative 11.1%, down 18.3 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Sadly for RE/MAX, its EPS declined by 9% annually over the last five years while its revenue grew by 1.4%. This tells us the company became less profitable on a per-share basis as it expanded.
In Q1, RE/MAX reported adjusted EPS of $0.16, down from $0.24 in the same quarter last year. This print missed analysts’ estimates. We also like to analyze expected EPS growth based on Wall Street analysts’ consensus projections, but there is insufficient data.
Key Takeaways from RE/MAX’s Q1 Results
We struggled to find many positives in these results. Its adjusted operating income missed and its EPS fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 1.3% to $10.93 immediately after reporting.
The latest quarter from RE/MAX’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
