v3.26.1
Revenue Recognition
 6 Months Ended
Jun. 30, 2026
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition
Revenue is recognized upon the transfer of control of promised services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those services in accordance with the revenue accounting standard. The Company's revenue disaggregated by major revenue categories and by reportable segment is presented in the table below (in millions):
Three Months Ended June 30,
Brokerage
Franchise
Integrated Services
Total
20262025202620252026202520262025
Gross commission income (1)
$3,947 $2,008 $— $— $— $— $3,947 $2,008 
Service revenue (2)
— — — — 205 39 205 39 
Franchise fees (3)
— — 119 8 — — 119 8 
Other (4)
13 5 16 — 6 — 35 5 
Total revenue$3,960 $2,013 $135 $8 $211 $39 $4,306 $2,060 
Six Months Ended June 30,
Brokerage
Franchise
Integrated Services
Total
20262025202620252026202520262025
Gross commission income (1)
$6,400 $3,331 $— $— $— $— $6,400 $3,331 
Service revenue (2)
— — — — 348 61 348 61 
Franchise fees (3)
— — 193 13 — — 193 13 
Other (4)
27 10 32 1 10 — 69 11 
Total revenue$6,427 $3,341 $225 $14 $358 $61 $7,010 $3,416 
(1)Gross commission income within the Brokerage segment is recognized at a point in time upon the closing of a home sale transaction.
(2)Service revenue primarily consists of title and escrow fees earned by the Company's title and escrow businesses, which are recognized at a point in time upon the closing of a home sale transaction. Service revenue also includes relocation fees, which are recognized when the related performance obligation is satisfied depending on the type of service performed.
(3)Franchise fees earned by the Franchise segment primarily consist of domestic royalties, which are recognized at a point in time when the underlying franchisee revenue is earned upon the closing of a home sale transaction.
(4)Other revenue is comprised of brand marketing funds received from franchisees within the Franchise segment and other miscellaneous revenues across the Company's other business segments.
The Company's revenue streams are discussed further below by business segment.
Brokerage
Brokerage revenue is primarily comprised of gross commission income which contains a single performance obligation that is satisfied upon the closing of a real estate services transaction, at which point the entire transaction price is earned. The Company is not entitled to any commission until the performance obligation is satisfied and is not owed any commission for unsuccessful transactions, even if services have been provided.
Franchise
Domestic Franchisees
In the U.S., the Company employs a direct franchising model whereby it franchises its real estate brands to real estate brokerage businesses that are independently owned and operated. Franchise revenue principally consists of royalty and marketing fees from the Company’s franchisees. The royalty received is primarily based on a gross percentage of the franchisee’s gross commission income. Royalty fees are recorded as the underlying franchisee revenue is earned (upon close of the real estate transaction). Annual volume incentives given to certain franchisees on royalty fees are recorded as a reduction to revenue and are accrued for in relative proportion to the recognition of the underlying gross franchise revenue. Other sales incentives are generally recorded as a reduction to revenue ratably over the related performance period or from
the date of issuance through the remaining life of the related franchise agreement. Franchise revenue also includes domestic initial franchise fees and marketing fees. Initial franchise fees are generally non-refundable and recognized as revenue upon the execution or opening of a new franchisee office to cover the upfront costs of opening the franchisee for business under one of the Franchise segment's brands. Marketing fees earned from franchisees are utilized by the Company to fund marketing campaigns on their behalf.
International Franchisees
The Company utilizes a direct franchising model and master franchise model outside of the U.S. Under both the direct and master franchise models outside of the U.S., the Company enters into long-term franchise agreements (generally 25 years in duration) and receives an initial area development fee (“ADF”) and ongoing royalties. Ongoing royalties are generally a percentage of the royalties received by the master franchisor from its franchisees with which it contracts and are recorded once the funds are received by the master franchisor. Under the direct franchise model, a royalty fee is paid to the Company on transactions conducted by its franchisees in the applicable country or region. The ADFs that the Company collects are recorded as deferred revenue when received and are classified as current or non-current liabilities in the condensed consolidated balance sheets based on the expected timing of revenue recognition. ADFs are recognized into franchise revenue over the average 25 year life of the related franchise agreement as consideration for the right to access and benefit from the Company’s brands. In the event an ADF agreement is terminated prior to the end of its term, the unamortized deferred revenue balance will be recognized into revenue immediately upon termination.
In connection with the Anywhere Merger, the Company assumed $47 million of deferred revenue liabilities related to the acquired franchise business, primarily consisting of the ADFs that are recognized as franchise revenue over a 25-year period. During the six months ended June 30, 2026, the Company recognized $49 million in additional deferred revenue offset by $43 million of revenue recognized from various sources including brand marketing fees. The outstanding balance for deferred revenue was $53 million as of June 30, 2026 related to the Anywhere franchise business.
Integrated Services
The Company provides incremental services related to a real estate transaction, including title and escrow and settlement services to consumers, real estate companies, corporations and financial institutions. These services relate to the closing of home purchases and refinancing of home loans and therefore, title revenues, title and escrow, and closing service fees are recorded at the time a real estate transaction or refinancing closes.
Additionally, the Company provides relocation services, through Cartus, to corporations managing employee transfers and earns referral fees for directing brokerage transactions to real estate professionals in its Brokerage and Franchise segments. Services include home sale assistance, policy counseling, group move management, expense processing, compensation and compliance support, visa and immigration support, and household goods moving. Revenue comes from fees paid by real estate brokers and moving companies, recognized when services are completed, and from outsourcing management fees charged to clients. Management fees are recorded as deferred revenue when billed (typically at the start of a relocation) and recognized over the move's duration, generally 3 to 6 months.