The first quarter loss compares with net income of $5.8 million in the fourth quarter but was an improvement on the $3.4 million loss one year prior.

Operating earnings, a non-GAAP measurement, of 24 cents a share beat Keefe, Bruyette & Woods' expectations of 19 cents and the consensus estimate of 18 cents.

Other factors besides the lower mortgage segment revenue responsible for that 5% decline included lower agent counts and revenue from previous Remax acquisitions.

The "challenging mortgage environment" is affecting that segment, which means it will take "a few more quarters" for the business to return to consistent revenue growth, pointing to positive signs popping up, said Karri Callahan, Remax chief financial officer, on the earnings call.

"In [fiscal year] 2024 network-wide transactions and volume increased compared to 2023," Callahan said. "Recently, we also experienced a flurry of franchise renewals with long-term Motto owners recommitting for another seven years."

Even so, the number of open Motto Mortgage franchises fell to 224 as of March 31, down from 225 at the end of 2024 and 243 for the first quarter last year; the year-over-year drop was nearly 8%.

Much of the revenue issues at both Motto, as well as the Wemlo processing business are "macro driven," with the biggest driver being the reduced office count compared with one year ago, Callahan said.

But Remax has seen some stabilization on a sequential quarter basis, as well as good engagement at a Motto event in April, she added.

"So people still see the importance in the field in terms of ancillary services and mortgage," Callahan said. "It's something that we think is still a tremendous growth opportunity for us."

Remax's U.S. real estate agent count fell 7.5% from a year ago, and by 2.8% from the fourth quarter. A seasonal decline is normal, but this was above KBW's 2.5% expected drop and the consensus model of 2%, said analyst Tommy McJoynt in a flash note.

"Home sale volumes have yet to show signs of a sustained rebound as we head into the spring season," McJoynt added. "This presents a challenging backdrop for Remax to curtail its agent rank decline, though it is taking proactive steps to further improve its value proposition to agents (e.g., sourcing lead referrals from digital marketing)."

In March, Remax announced Ward Morrison, president of Motto Mortgage, along with the Wemlo business, will be retiring on June 15.

"We have a great team in place at Motto and Wemlo, and so that team is doing great things right now," CEO Erik Carlson said in response to a question about who might be stepping in those roles.

"First off Ward is just irreplaceable, I'll say that, but we do have an active search, both internally and externally," he continued. "Obviously, with the mortgage market, there's a lot of great candidates out there."