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Non-controlling Interest

12 Months Ended

Dec. 31, 2025

Non-controlling Interest

Non-controlling Interest

4. Non-controlling Interest

Holdings is the sole managing member of RMCO and operates and controls all the business affairs of RMCO. The ownership of the common units in RMCO is summarized as follows:


		December 31, 2025				December 31, 2024
		Shares		Ownership %		Shares		Ownership %
Non-controlling interest ownership of common units in RMCO		12,559,600		38.5	%	12,559,600		39.8	%
Holdings outstanding Class A common stock (equal to Holdings common units in RMCO)		20,095,180		61.5	%	18,971,435		60.2	%
Total common units in RMCO		32,654,780		100.0	%	31,531,035		100.0	%

The weighted average ownership (“WAO”) percentages for the applicable reporting periods are used to calculate the “Net income (Loss) attributable to RE/MAX Holdings, Inc.” A reconciliation of “Income (loss) before provision for income taxes” to “Net income (loss) attributable to RE/MAX Holdings, Inc.” and “Net Income attributable to non-controlling interest” in the

accompanying Consolidated Statements of Income (Loss) for the periods indicated is detailed as follows (in thousands, except percentages):


		Year Ended December 31,
		2025									2024									2023
		Holdings			NCI			Total			Holdings			NCI			Total			Holdings			NCI			Total
WAO percentage of RMCO^(a)			61.2	%		38.8	%		100.0	%		59.9	%		40.1	%		100.0	%		59.1	%		40.9	%		100.0	%
Income (loss) before provision for income taxes^(a)		$	11,743		$	7,885		$	19,628		$	3,216		$	2,984		$	6,200		$	(14,149)		$	(27,390)		$	(41,539)
(Provision) / benefit for income taxes^(b)			(3,590)			(2,605)			(6,195)			3,907			(2,030)			1,877			(54,873)			(2,074)			(56,947)
Net income (loss)		$	8,153		$	5,280		$	13,433		$	7,123		$	954		$	8,077		$	(69,022)		$	(29,464)		$	(98,486)

NCI – non-controlling interest

(a)	The WAO percentage of RMCO differs from the allocation of income (loss) before provision for income taxes between RE/MAX Holdings and the non-controlling interest due to certain items recorded at Holdings.

(b)

The provision for income taxes attributable to Holdings is primarily comprised of U.S. federal and state income taxes on its proportionate share of the pass-through income (loss) from RMCO. It also includes Holdings’ share of taxes directly incurred by RMCO and its subsidiaries, including taxes in certain foreign jurisdictions. See Note 11, Income Taxes, for additional information.

Distributions and Other Payments to Non-controlling Unitholders

Under the terms of RMCO’s limited liability company operating agreement, RMCO makes cash distributions to non-controlling unitholders on a pro-rata basis. For the year ended December 31, 2023, the distributions paid to non-controlling unitholders was $8.7 million.

Tax Receivable Agreements

Holdings has twice acquired significant portions of the ownership in RMCO; first in October 2013 at the time of IPO when Holdings acquired its initial 11.5 million common units of RMCO and, second, in November and December 2015 when it acquired 5.2 million additional common units. Holdings issued Class A common stock, which it exchanged for these common units of RMCO. RIHI then sold the Class A common stock to the market.

When Holdings acquired common units in RMCO, it received a step-up in tax basis on the underlying assets held by RMCO. The step-up is principally equivalent to the difference between (1) the fair value of the underlying assets on the date of acquisition of the common units and (2) their tax basis in RMCO, multiplied by the percentage of units acquired. Most of the step-up in basis relates to intangibles assets, primarily franchise agreements and goodwill, and the step-up is often substantial. These assets are amortizable under IRS rules and result in deductions on the Company’s tax return for many years and consequently, Holdings receives a future tax benefit. These future benefits are reflected within deferred tax assets on the Company’s consolidated balance sheets.

If Holdings acquires additional common units of RMCO from RIHI, the percentage of Holdings’ ownership of RMCO will increase, and additional deferred tax assets will be created as additional tax basis step-ups occur.

In connection with the initial sale of RMCO common units in October 2013, Holdings entered into Tax Receivable Agreements (“TRAs”) which require that Holdings make annual payments to the TRA holders equivalent to 85% of any tax benefits realized on each year’s tax return from the additional tax deductions arising from the step-up in tax basis. The TRA holders as of December 31, 2025 are RIHI and Parallaxes Rain Co-Investment, LLC (“Parallaxes”). TRA liabilities were established for the future cash obligations expected to be paid under the TRAs and are not discounted.

This liability is recorded within “Payable pursuant to tax receivable agreements” in the Consolidated Balance Sheets and was $1.5 million in aggregate as of December 31, 2025, and 2024. In 2023, the Company evaluated the need for a valuation allowance against its deferred tax assets and determined that a valuation allowance was necessary in light of the reduction in taxable income primarily due to the settlement of costly litigation associated with several industry class-action lawsuits. See Note 13, Commitments and Contingencies, for additional information. In connection therewith, we also remeasured the liabilities under the TRAs, which resulted in a reduction in the TRA liabilities and corresponding gain of $25.3 million. See Note 11, Income Taxes, for additional information.

Similar to the deferred tax assets, the TRA liabilities would increase if Holdings acquired additional common units of RMCO from RIHI or upon the future reversal of valuation allowances.