2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying Condensed Consolidated Balance Sheet at December 31, 2025, which was derived from the audited consolidated financial statements at that date, and the unaudited interim condensed consolidated financial statements and notes thereto have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying condensed consolidated financial statements are presented on a consolidated basis and include the accounts of Holdings and its consolidated subsidiaries. All significant intercompany accounts and transactions have been eliminated. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments and eliminations, consisting only of normal and recurring adjustments, necessary to present fairly the financial position and results of operations for the Company for the reported periods. Interim results may not be indicative of full-year performance.

These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements within the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Annual Report on Form 10-K”). Please refer to that document for a fuller discussion of all significant accounting policies.

Use of Estimates

The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Segment Reporting

The Company operates under the following reportable segments: Real Estate, Mortgage, and Marketing Funds. The Company presents all other business activities and operating segments which, due to quantitative insignificance, do not

meet the quantitative significance tests for reportable segments under Other.

Revenue Recognition

The Company generates most of its revenue from contracts with customers. The Company’s major streams of revenue are:

Deferred Revenue and Capitalized Contract Costs

Deferred revenue is primarily driven by Franchise sales and Annual dues, as discussed above, and is included in “Deferred revenue” and “Deferred revenue, net of current portion” on the Condensed Consolidated Balance Sheets. Other deferred revenue is primarily related to events-related revenue. The activity consists of the following (in thousands):
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Capitalized contract costs include commissions paid on Franchise sales and other contract costs that are recognized as an asset and amortized over the contract life of the franchise agreement. The activity in the Company’s capitalized contract costs (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):

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):

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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):

Cash, Cash Equivalents and Restricted Cash

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):

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Services Provided to the Marketing Funds by Real Estate

Real Estate charges the Marketing Funds for various services it performs or for payments it makes on behalf of the Marketing Funds to third-party vendors. These services are primarily comprised of (a) building and maintaining the remax.com and remax.ca websites and mobile apps, (b) agent and consumer-facing technology via the BoldTrail platform (refer to the Company’s 2025 Annual Report on Form 10-K for further details), (c) dedicated employees focused on consumer-facing marketing initiatives, and (d) various administrative services including customer support of technology, accounting and legal. 

Costs charged from Real Estate to the Marketing Funds are as follows (in thousands):

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Accounts and Notes Receivable

As of June 30, 2026, and December 31, 2025, the Company had allowances against accounts and notes receivable of $13.3 million and $12.6 million, respectively.

Other Current Assets and Other Assets, Net of Current Portion

Other current assets and Other assets, net of current portion consist of the following (in thousands):

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Property and Equipment

As of June 30, 2026 and December 31, 2025, the Company had accumulated depreciation of $18.2 million and $17.2 million, respectively. Depreciation expense for the three months ended June 30, 2026, and 2025 was $0.6 million, respectively, and $1.2 million for the six months ended June 30, 2026 and 2025, respectively.

Leases

The Company leases corporate offices, a distribution center, billboards and certain equipment. As all franchisees are independently owned and operated, there are no leases recognized for any offices used by the Company’s franchisees. All of the Company’s material leases are classified as operating leases. The Company acts as the lessor for sublease agreements on its corporate headquarters, consisting solely of operating leases.

Restructuring Charges

During the second quarter of 2025, the Company restructured its support services intended to further enhance the overall customer experience. As a result of this restructuring, during the three and six months ended June 30, 2025, the Company incurred $2.9 million of severance and related expenses and accelerated certain performance-based restricted

stock units and forfeited the remaining grants, resulting in an equity compensation benefit of $0.3 million, which are recognized as “Selling, operating and administrative expenses” in the Consolidated Statements of Income (Loss). See Note 6, Accrued Liabilities, for a roll forward of the liability related to the restructuring as of June 30, 2026.

Foreign Currency Derivatives

The Company is exposed to foreign currency transaction gains and losses related to certain foreign currency denominated asset and liability positions, with the Canadian dollar representing the most significant exposure primarily from an intercompany Canadian loan between RMCO and the Canadian entity for RE/MAX INTEGRA (“INTEGRA”). The Company uses short duration foreign currency forward contracts, generally with maturities ranging from a few days to a few months, to minimize its exposures related to foreign currency exchange rate fluctuations. None of these contracts are designated as accounting hedges as the underlying currency positions are revalued through “Foreign currency transaction gains (losses)” on the Condensed Consolidated Statements of Income (Loss) along with the related derivative contracts. Maturities of the foreign currency forward contracts are included within “Net cash provided by operating activities” on the Condensed Consolidated Statements of Cash Flows, with any non-cash portion included as a component of “Changes in operating assets and liabilities” on the Condensed Consolidated Statements of Cash Flows. During the three months ended June 30, 2026, and 2025, the Company recognized a net gain of $0.6 million and net loss of $1.6 million, respectively. During the six months ended June 30, 2026 and 2025, the Company recognized a net gain of $1.2 million and a net loss of $1.5 million, respectively.

The Company has a short-term $44.0 million Canadian dollar forward contract that matures in the third quarter of 2026 that net settles in U.S. dollars based on the prevailing spot rates at maturity.

Recently Adopted Accounting Pronouncements

None.

New Accounting Pronouncements Not Yet Adopted

In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-06, Intangibles (Topic 350) – Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which clarifies and modernizes the accounting for costs related to internal-use software. The amendments remove all references to project stages in ASC 350-40 and clarify the threshold that entities should apply to begin capitalizing costs. The new standard is effective for annual periods beginning after December 15, 2027, and interim periods within those fiscal years. The amendments can be applied using a prospective, retrospective, or modified transition approach. The Company believes the amendments of ASU 2025-06 will not have a significant impact on the Company’s consolidated financial statements or required disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement (Topic 220) – Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires enhanced disclosures around disaggregation of certain income statement expense lines into specified categories. The new standard applies to public business entities and is effective on a prospective basis for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company believes the amendments of ASU 2024-03 will not have a significant impact on the Company’s consolidated financial statements and will include all required disclosures upon adoption.

Arrangement Agreement and Plan of Merger with The Real Brokerage Inc.

On April 26, 2026, RE/MAX Holdings, Inc. (“Holdings” or the “Company”) entered into an Arrangement and Plan of Merger (as may be amended, modified or supplemented from time to time, the “Merger Agreement”) to be acquired by The Real Brokerage Inc. (“Real”). Pursuant to the Merger Agreement, a new holding company, Real REMAX Group Inc., will be formed to combine Real and Holdings into a single publicly traded company (the “Merger”) expected to be listed on the Nasdaq Stock Market under the ticker symbol “REAX.”

Under the terms of the Merger Agreement, each outstanding share of RE/MAX Holdings, Inc. Class A common stock will be converted into the right to receive either (i) 5.15 shares of Real REMAX Group Inc. common stock, to be adjusted to reflect a 10-for-1 share consolidation prior to transaction close, or (ii) $13.80 in cash, subject to proration such that the aggregate cash consideration is between a minimum of $60 million and a maximum of $80 million. Upon closing, ownership of the combined company is expected to be approximately 60% held by former Real shareholders and 40% held by former RE/MAX Holdings, Inc. shareholders, assuming the maximum cash election.

The transaction is intended to qualify as a tax‑free exchange for U.S. federal income tax purposes and is subject to regulatory approvals, the approval by the shareholders of both companies, and customary closing conditions. On July 13, 2026, the U.S. Department of Justice granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), related to the Merger. Both companies plan to hold special meetings for their respective shareholders on August 14, 2026. The merger is expected to close in the second half of 2026.

In connection with the Merger, Real has obtained committed financing in an aggregate amount of up to $550 million, led by Morgan Stanley Senior Funding, Inc. and Apollo Global Funding, LLC. The financing is expected to be used to fund the cash portion of the merger consideration and transaction costs and to refinance the Company’s existing indebtedness at closing. The financing commitments are subject to customary terms and conditions and are not expected to be a condition to the completion of the transaction. Merger related transaction costs, primarily related to legal expenses, is recorded to “Merger transaction costs” in the accompanying Condensed Consolidated Statements of Income (Loss) and is primarily recorded to “Accrued liabilities” within the Condensed Consolidated Balance Sheets. Merger related transaction costs are included in the Real Estate segment.

The Merger Agreement contains customary representations, warranties and covenants, including covenants relating to the conduct of the Company's business during the period between execution and closing, and non-solicitation obligations subject to customary exceptions for superior proposals and other matters. Consummation of the Mergers is subject to the satisfaction or waiver of customary closing conditions, including, among others, approval by the Company's stockholders and Real's shareholders, regulatory approvals and the consummation of the RIHI Merger (defined below). The Merger Agreement may be terminated by either party under certain circumstances, including if the Mergers have not closed within nine months (subject to two automatic extensions of 45 days each under specified circumstances), or upon the failure to receive required stockholder or shareholder approvals. Upon termination under certain specified circumstances, a termination fee may be payable by either the Company or Real.

RIHI Merger and Elimination of Up-C Structure

Concurrent with the execution of the Merger Agreement, the Company entered into a separate Agreement and Plan of Merger with RIHI, Inc. (“RIHI”) and certain merger subsidiaries of the Company (the "RIHI Merger Agreement") providing for the merger of a wholly owned subsidiary of the Company with and into RIHI and then the merger of the resulting company with and into another wholly-owned subsidiary of the Company (collectively, the “RIHI Merger”). RIHI is the holder of the single outstanding share of the Company's Class B common stock and of the common units of RMCO not held by the Company. Upon the effectiveness of the RIHI Merger (i) each outstanding share of RIHI common stock will be converted into a number of shares of the Company’s Class A common stock based on exchange ration set forth in the RIHI Merger Agreement, and (ii) the share of the Company’s Class B common stock and the RMCO common units, each held by RIHI will be surrendered to the Company. As a result, the Company will acquire RIHI as the holder of such securities, thereby eliminating the Company’s existing Up-C structure. The share of Company Class A common stock received by the shareholders of RIHI pursuant to the RIHI Merger will thereafter be converted into the right to receive the Merger Consideration (as defined in the Merger Agreement) in the Mergers. Consummation of the RIHI Merger is a condition to closing the Mergers.

Amendment to Tax Receivable Agreement

Concurrently with the execution of the Merger Agreement, the Company and RIHI entered into Amendment No. 1 (the “RIHI TRA Amendment”) to the Tax Receivable Agreement, dated October 7, 2013, between the Company and RIHI (the "RIHI TRA"), pursuant to which the RIHI TRA will terminate upon the closing of the Mergers or any other Qualifying Change of Control (as defined in the RIHI TRA Amendment), and no Early Termination Payment, Tax Benefit Payment (each as defined in the RIHI TRA Amendment) or other payment will be made to RIHI thereunder. If a Qualifying Change of Control does not occur within eighteen months of the date of the RIHI TRA Amendment, the RIHI TRA Amendment will be void and of no further effect.

Support Agreement

In connection with the Merger Agreement, holders of shares of Company common stock representing approximately 38% of the Company's outstanding voting power entered into a support agreement pursuant to which they agreed to vote their shares in favor of the adoption of the Merger Agreement, subject to customary terms and conditions.

For additional information on the Merger, see the Company’s Current Report on Form 8-K filed with the SEC on April 28, 2026.