Real Brokerage Q1 2025 Earnings Report

Real Brokerage EPS Results

• Actual EPS: -$0.02
• Consensus EPS: -$0.05
• Beat/Miss: Beat by +$0.03
• One Year Ago EPS: N/A

Real Brokerage Revenue Results

• Actual Revenue: $353.98 million
• Expected Revenue: $332.92 million
• Beat/Miss: Beat by +$21.06 million
• YoY Revenue Growth: N/A

Real Brokerage Announcement Details

• Quarter: Q1 2025
• Date: 5/8/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, May 8, 2025
• Conference Call Time: 8:00AM ET

Real Brokerage (NASDAQ:REAX), together with its subsidiaries, operates as a real estate technology company in the United States and Canada. It operates in three segments: North American Brokerage, Real Title, and One Real Mortgage. It offers brokerage, title, and mortgage broker services. The company is based in Miami, Florida.

Real Brokerage Q1 2025 Earnings Call Transcript

Key Takeaways

• REAL reported record Q1 2025 results, with revenue up 76% to $354 million, a 77% increase in closed transactions to 33,600, net loss narrowing to $5.1 million, and adjusted EBITDA more than doubling to $8.3 million.
• Agent count climbed to 26,870 at quarter end (up 61% YOY) and exceeded 27,700 as of this morning, reflecting a robust recruitment pipeline and one of the fastest onboarding rates in the industry.
• The RealWallet fintech platform and related high-margin ancillaries grew 50% YOY, with over 3,200 U.S. agents using business checking accounts, $8 million in deposits, $126,000 in Q1 revenue, and an annualized run rate above $700,000.
• All inbound agent support calls now run through LEO Copilot, the AI-powered assistant handling thousands of daily interactions to speed up compliance and tech support, boost agent productivity, and prepare for consumer-facing AI services.
• REAL is scaling ancillary arms and agent capabilities via statewide title joint ventures, a new RSU program for its 97 loan officers (over half are licensed agents), and expanded skill-building through Real Academy, regional roadshows, and elite masterminds.

Presentation

[Operator]

Good morning, ladies and gentlemen, and welcome to the RealBrokerage first quarter two thousand twenty five earnings call. At this time, all participants have been placed on a listen only mode, and we will open the floor for your questions and comments after the presentation. I will now turn the call over to Alex Lumpkin. Ma'am, the floor is yours.

[Alix Lumpkin, Chief Legal Officer at The Real Brokerage]

Thanks, and good morning. Thank you for standing by, and welcome to The Real Brokerage conference call and webcast for the first quarter ended 03/31/2025. We appreciate everyone for joining us today. With me on the call today are Tamir Poleg, our Chairman and Chief Executive Officer Sharan Srivastava, President and Ravi Jani, our Chief Financial Officer. This morning, REAL published an earnings press release, including results for the first quarter ended 03/31/2025.

[Alix Lumpkin, Chief Legal Officer at The Real Brokerage]

The press release, along with the unaudited consolidated financial statements and related management's discussion and analysis for the quarter ended, have been filed with the U. S. Securities and Exchange Commission on EDGAR and with the Canadian securities regulators on SEDAR. Before we get started, I'd like to remind everyone that statements made in this conference call that are not historical facts, including statements about future time periods, may be deemed to constitute forward looking statements. Our actual results may differ materially from these forward looking statements and the risk factors that could cause these differences are detailed in our Canadian continuous disclosure documents and SEC reports.

[Alix Lumpkin, Chief Legal Officer at The Real Brokerage]

Real disclaims any intent or obligation to update these forward looking statements except as expressly required by law. With that, I'd like to turn the call over to Chairman and Chief Executive Officer, Tamir Polag. Tamir, please proceed.

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

Good morning, and thank you, Alex. I will start with an overview of our strategy and recent business highlights. Sharan will provide an update on actions we are taking to drive agent growth and improve agent experience, and Ravi will provide a more in-depth discussion of our financial results. I'll then provide a few closing remarks before opening up the call for Q and A. To begin, Real is a real estate technology company that is differentiated in our industry.

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

Unlike traditional real estate brokerage firms, we provide real estate agents with a compelling combination of financial incentives, a proprietary software based technology platform, which eliminates the need for an agent's physical office space, and a collaborative culture that we believe is unique in our industry. Our vision is to simplify life's most complex transaction, that is, a purchase or sale of a home, by providing agents with the tools, technology and resources they need to grow both their businesses and as individuals, while delivering a seamless experience for clients. In the short term, this vision includes the rollout of a consumer facing product, which streamlines the client experience and enhances the attachment of our higher margin ancillary services. In the long term, we expect our platform to encompass a holistic ecosystem of financial technology products and investment planning tools, providing agents with an avenue to build long term wealth. Ultimately, as the platform matures, we believe homebuyers and sellers could also benefit from the breadth of our service offering.

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

Our goal is to redefine the role of a real estate brokerage in the lives of our agents and in the broader housing industry. Importantly, just like our institutional investors, many of our agents are also shareholders in our company. That is why we will remain relentless in our focus on delivering long term value for our agents, for their clients and for our shareholders. Turning to the quarter. This morning Real reported record first quarter results.

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

Revenue of $354,000,000 increased 76% compared to $2.00 $1,000,000 in the prior year, driven by a 77% increase in the number of transactions closed, which reached 33,600. This compares favorably to the 2% decline in existing home sale industry transactions during the quarter. Gross profit in the first quarter of twenty twenty five was $33,900,000 an increase of 63%, while net loss improved to $5,100,000 from a loss of $16,100,000 in the prior year. Our strong top line growth contributed to adjusted EBITDA of $8,300,000 a significant improvement from $3,600,000 in the first quarter of twenty twenty four. We ended the first quarter with 26,870 agents, up 61% versus the prior year.

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

As of this morning, our agent count exceeds 27,700, meaning we've added over 800 agents since the start of the second quarter. We continue to see strong momentum across our technology platform and high margin ancillary businesses, including mortgage, title and real wallet, which grew by a combined 50% versus the prior year. As a reminder, these business lines typically generate gross margins that are typically five to 8x higher than our core brokerage segment and are central to our long term strategy for driving margin expansion and operating leverage. That momentum is also being driven by the rapid evolution of LEO Copilot, our AI powered agent assistant. In April, we transitioned all inbound agent support calls to LEO, making Real one of the first brokerages to automate its primary support layer with AI.

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

LEO now handles thousands of agent interactions daily across mobile and voice and continuously learns from those interactions to deliver faster, more accurate, and more personalized assistance. This represents a meaningful step forward in our vision to build a scalable intelligent brokerage platform that increases agent productivity while driving efficiency across our operation. RealWallet continues to show strong progress across both product development and adoption. This quarter, we were pleased to welcome Dominik Parikh to Real as General Manager of RealWallet. Dominik brings over a decade of experience in fintech and lending, including prior roles at Funding Circle and BCG, and we're excited about the future of the platform under his leadership.

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

We've expanded product functionality with new Apple Pay and Google Pay integrations and in March launched dedicated tax planning business checking accounts to help agents better manage their tax liabilities. In The U. S, over 3,200 agents now use RealWallet business checking accounts, with total deposits reaching approximately $8,000,000 including nearly 300 agents using the new tax focused business checking accounts. In Canada, we've extended over 2,000,000 in credit to 200 agents through our production based lending program. To put that in perspective, it took Real seven years to reach 3,000 agents.

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

RealWallet hit that same milestone in just seven months, highlighting the demand for agent aligned financial tools. In Q1, RealWallet generated 126,000 in revenue, and we now estimate the annualized run rate revenue exceeds $700,000 an increase from $500,000 at the time of our last earnings call, and we expect meaningful upside as adoption and product offerings continue to expand. At One Real Title, we are executing a strategic pivot under new leadership to position the business for greater scalability. Rather than expanding via individual, team based joint ventures, we are now pursuing statewide strategy, which provides more consistent operating leverage and allows us to grow more efficiently. We're launching our first three state level JVs this month, with three more expected next month.

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

This model will position us for a reacceleration in title growth in the back half of the year. At One Real Mortgage, we continue building an agent aligned mortgage business. In the first quarter, we introduced a new stock award program that enables loan officers the opportunity to earn RSUs and participate in REAL's long term upside, similar to programs offered to our agents. This initiative enhances alignment across the transaction and reinforces our commitment to attracting and retaining top performing LOs who share our vision to reshape the home buying and selling experience. We now have 97 loan officers, over half of whom are real agents licensed to originate loans under the Real Program, delivering a more connected, transparent financing experience for clients.

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

Altogether, these initiatives reflect our continued focus on building a tech enabled real estate platform that supports agents at every step of the transaction and strengthens our financial profile in the process. With that, I'll turn it over to Sharan for an update on our growth and agent initiatives.

[Sharran Srivatsaa, President at The Real Brokerage]

Thank you, Tamir, and good morning, everyone. I'll provide an update on our brokerage business in a quick top five format. So let's dive in and discuss some of the key highlights and areas of focus this quarter. Number one, a sluggish market, but real agents are leaning in. The housing market has kicked off 2025 on a slow note with existing home sale units down about 2% year over year during the first quarter, reflecting the ongoing affordability pressures that have weighed on the market.

[Sharran Srivatsaa, President at The Real Brokerage]

In fact, our latest agent survey indicates a shift occurring under the surface. Buyers are gaining more leverage and sellers are adjusting pricing expectations lower accordingly. Against this backdrop, real agents delivered a 5% year over year increase in average transactions per agent. We believe it's a clear signal that our agents are well equipped to navigate this market with skill and focus. Number two, while the industry debates, we stay focused.

[Sharran Srivatsaa, President at The Real Brokerage]

Now I've been in this industry for nearly two decades, and the narrative is always shifting from lawsuits and commission rates to today's focus on exclusivity and listing access. It's important to understand that at Real, we don't chase headlines. We stay focused on building a model that works in any market. Number one, when conditions tighten, agents join us to lower their cost structure. Number two, when the market strengthens, they join us to retain more of the upside and participate in ownership.

[Sharran Srivatsaa, President at The Real Brokerage]

And number three, as a top 10 brokerage, we have the scale to launch a massive exclusive listing network if we believed it was in the best interest of agents and their clients. But we also know there is no one size fits all approach in real estate. Our job is to empower agents and their clients with flexibility and not force them into any single playbook. That's how we continue to grow by staying grounded in what actually helps agents succeed. So number three, continuing our growth momentum as we march towards Realex.

[Sharran Srivatsaa, President at The Real Brokerage]

We welcomed over 2,700 net new agents in q one, which was one of our strongest quarters ever. Importantly, our attraction pipeline remains robust, especially among a top producing teams. I am excited to showcase the breadth of our platform next week at RealX, our annual virtual conference open to the entire industry. With thousands already registered, RealX has become a powerful engine for introducing agents to our model, our technology, and most importantly, our culture. I look forward to seeing you all there.

[Sharran Srivatsaa, President at The Real Brokerage]

Number four, the industry is shifting, and skill is the new commission. We believe real estate remains one of the most complex transactions a consumer can face even with an agent's guidance along the way. That's why we see the future of this industry anchored by highly skilled agents who are empowered by AI and systems, not replaced by them. But make no mistake. The skill of the agent is still the most important variable.

[Sharran Srivatsaa, President at The Real Brokerage]

So for context, in just the past twelve months, two foundational pillars of the real estate industry model, which are buyer agency and clear cooperation, have come under fire. On top of that, agents are navigating volatile macro conditions, evolving policies, and rising interest rates. In fact, the national data now clearly shows a widening gap in per agent sales productivity. The skill gap is real, and it's growing. That's why we're doubling down on skill building with three focus delivery formats.

[Sharran Srivatsaa, President at The Real Brokerage]

Number one, master class style training through Real Academy. This is where agents can learn new skills, new tools, and capabilities on demand. Number two, high impact regional road shows where our leaders are traveling and educating in local markets. And number three, functional masterminds like the hundred million dollar roundtable, which is ultra focused on our largest enterprise teams, and the luxury mastermind for agents serving the high end markets. We believe a well trained agent operating on a world class platform like Real can navigate any change in legislation or policy or market conditions and still deliver exceptional results for their clients.

[Sharran Srivatsaa, President at The Real Brokerage]

While real estate is getting harder, our agents are getting smarter. Number five, strengthening the flywheel for long term success. So as I step into a new role on Real's board next month, I have never been more confident in the foundation we've built. Real is now one of the largest brokerages in North America with a leadership team, culture, and platform that continue to raise the bar. In q one, we advanced that foundation further with enhancements to LEO Copilot and RealWallet and team driven innovations like ProTeams and private label.

[Sharran Srivatsaa, President at The Real Brokerage]

These aren't just features. They're part of a a growing flywheel that creates long term value for agents, clients, and shareholders alike. In short, I'm incredibly proud of our team and even more excited about what lies ahead. So to our employees and our agents, thank you. None of this would be possible without you.

[Sharran Srivatsaa, President at The Real Brokerage]

Now I'll pass it to Ravi for the financials.

[Ravi Jani, CFO at The Real Brokerage]

Thanks, Sharan. We're pleased to report another quarter of impressive performance as we continue to deliver consistent growth and improving profitability. Revenue in the first quarter rose to $354,000,000 an increase of 76% versus the first quarter of twenty twenty four. This was driven primarily by a 77% increase in brokerage revenue, which reached $352,000,000 while ancillary businesses contributed $2,200,000 in revenue this quarter, an increase of 50% year over year. Growth in ancillary was led by a 55% increase in OneReal Mortgage and 30% growth in OneReal Title.

[Ravi Jani, CFO at The Real Brokerage]

As Tamir mentioned, we generated approximately $126,000 in RealWallet revenue during its first full quarter. And while still early, RealWallet is gaining traction and should continue to grow sequentially as we roll out new products and features. Gross profit for the first quarter came in at $33,900,000 up 63% from $20,800,000 in Q1 twenty twenty four. Gross margin was 9.6% consistent with our expectations and compares to 10.3% in the prior year. The year over year decline reflects the growing share of production from agents who have reached their annual commission cap.

[Ravi Jani, CFO at The Real Brokerage]

For context, at the end of Q1, '12 percent of our agent base had capped, up from 8% a year ago. These agents contributed roughly 50% of total commission revenue in the quarter, compared to 40% in Q1 twenty twenty four. As a reminder, once an agent caps, they stop paying the standard 15% split, and instead pay a $285 per transaction fee, resulting in lower gross margin on those transactions. Looking ahead, we remain focused on driving gross margin expansion over time as our ancillary services scale. While the shift in revenue mix toward more productive capped agents will likely continue in Q2, we expect this to be partially offset by the fee changes implemented earlier this year, along with the improving contributions from our ancillary business lines.

[Ravi Jani, CFO at The Real Brokerage]

Operating expenses, including G and A, marketing and R and D, totaled $39,100,000 or 11.1% of revenue in the first quarter, compared to $36,500,000 or 18.2% of revenue during Q1 twenty twenty four. Now the prior year period included a 9,300,000 litigation settlement. Excluding that, our operating expenses increased by approximately $12,000,000 year over year. Approximately 5,500,000.0 was related to higher revenue share in agent equity based compensation, with the remaining increase driven by corporate investments across the business, including operations, R and D, back office functions, as well as higher professional fees, including those incurred related to our transition to U. S.

[Ravi Jani, CFO at The Real Brokerage]

GAAP. Adjusted operating expense, which is a non GAAP measure and meant to provide insight into what we view as our recurring fixed cash OpEx, totaled $21,200,000 in the first quarter or 6% of revenue. That's a roughly 80 basis point improvement from 6.8% in Q1 twenty twenty four. We're pleased to see this metric continue to improve, particularly considering the significant investments we continue to make across the business. Operating loss improved to $5,200,000 compared to a loss of $15,700,000 in Q1 twenty twenty four, while net loss was $5,100,000 compared to a net loss of $16,100,000 in the first quarter of twenty twenty four.

[Ravi Jani, CFO at The Real Brokerage]

Adjusted EBITDA more than doubled to $8,300,000 up from $3,600,000 in the first quarter of twenty twenty four, driven by our strong revenue and gross profit growth, which outpaced growth in our ongoing cash operating expenses. Total stock based compensation for the quarter was $12,700,000 broken down as follows: 8,000,000 related to our agent stock purchase program, which is reflected in cost of sales, 3,000,000 in agent equity awards recorded in marketing, and 1,700,000.0 in employee related stock compensation. Stock comp is excluded from both adjusted operating expense and adjusted EBITDA, and full reconciliations are provided in our earnings release and investor presentation. We ended the quarter with a very strong balance sheet and net unrestricted cash and investments of approximately 35,000,000, up from 33,000,000 at year end. We generated 16,000,000 in operating cash flow and returned 6,000,000 to shareholders through the repurchase of 1,300,000.0 shares.

[Ravi Jani, CFO at The Real Brokerage]

We continue to operate with no debt and ample liquidity to support our growth, while maintaining flexibility to return capital to shareholders and opportunistically invest in M and A. I'll close with a few KPIs. Our gross transaction value was $13,500,000,000 up 80% year over year. Our median sale price was $380,000 in the first quarter, up 2% year over year. Adjusted OpEx per transaction was $631 down 12% year over year from $715 in Q1 twenty twenty four.

[Ravi Jani, CFO at The Real Brokerage]

And our headcount efficiency ratio, which we define as the number of full time brokerage employees divided by the number of agents on our platform was one to 88 at the end of the first quarter. Notably, this is down from one to 136 as of the end of twenty twenty four, and this is due to the fact that during the quarter, we transitioned 136 employees in India from contractor status to full time employees, including 70 employees in our R and D organization. Even with this transition, we continue to believe we have one of the most efficient brokerage operations in the industry from a headcount standpoint. More details on our results and key operating metrics can be found in the earnings press release and investor presentation that accompanied this call. As you know, we don't provide formal guidance, but we do continue to expect significant improvements in revenue, gross profit and adjusted EBITDA for the year, and we're certainly off to a good start.

[Ravi Jani, CFO at The Real Brokerage]

I will now turn it back to Tamir.

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

Thank you, Ravi. As we close today's call, I want to acknowledge the backdrop we're operating in. We know it's been an uncertain time for agents, for consumers, and for the broader economy. But at the same time, we're equally convinced that the world is entering one of the most transformative technological eras in history. The rise of AI is not just another tool, but a fundamental shift that, in our view, will reshape industries, professions, and entire business models.

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

Our industry is no exception. What gives us confidence is that REAL was built for moments like this. As we've demonstrated this quarter and over the past several years, we believe we've developed a model designed to win in any environment. While others brace for change, we lean into it. That's why despite the noise, we continue to invest in innovation, expand our moat, and deliver value for our agents by embracing the future, not resisting it.

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

In fact, as a small but meaningful signal of where we're headed, I'll let you in on something. My prepared remarks today, including this section, were read entirely by Leo AI. That's not a gimmick. It's a reflection of how far we've come and a hint of where we're going. At this time, Leo is able to have real time voice conversations, and we are planning to test these capabilities with our agents in the coming weeks.

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

Now let's move to the q and a session.

[Operator]

Certainly. Everyone at this time will be conducting a question and answer session for analysts. If you have any questions or comments, please press star one on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press 1 on your phone.

[Operator]

Your first question is coming from Darren Aftahi from Roth Capital Partners. Your line is live.

[Dillon Heslin, Research Associate at Roth Capital Partners]

Hey. This is Dylan for Darren. Thanks for taking my questions. First, on on sort of AI and and LEO. Could you talk about how agent adoption is of using those services?

[Dillon Heslin, Research Associate at Roth Capital Partners]

I know you said you switched all the inbound calls over to LEO, but do you have any metrics that you're tracking you can share about how these tools you're introducing are helping agents that are already quite productive become more productive?

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

Yeah. Thanks for the question. LEO co pilot is focused on us delivering a better service to the agents. So currently, as we said, LEO is taking all of the inbound phone calls, and also having thousands of daily interactions with agents. Those are typically questions that have to do with compliance, with tech related questions, things that agents need in order to perform or operate on the platform.

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

What we are now building and started testing is all of those things that LEO can assist with agents and their clients. So everything that is consumer facing, this is still not rolled out, so currently I don't think we have any metrics that relate to how LEO can help agents perform better or serve clients in a better way, but we do track the metrics of providing better service to our agents through faster support, faster answers, help with documents, review, and all of those things. So obviously, at the end of the day, LEO helps agents save time on every transaction, but still not consumer facing.

[Dillon Heslin, Research Associate at Roth Capital Partners]

Got it. Thanks. And if I ask one more, Robbie, on gross margins and capping, like, can you help us think about the trends in gross margins? I know like 50% of the revenue was from capped agents and you're working on the new ancillary programs, but not quite at scale yet. Like how do you sort of get us to think about the trend in gross margins and some of the expansion?

[Ravi Jani, CFO at The Real Brokerage]

Yeah, thanks Dylan. I think as I mentioned, we did start out the year with a higher mix of capped agents and capped revenue. I mean, it's a high class problem to have just more productive agents on the platform. As I mentioned, I do think that dynamic will continue into Q2, but the partial offset will be the fact that we had some fee program changes in February that will start to phase in. I think you'll see that mix impact that you saw in the first quarter, but that will be more and more offset as the year progresses as ancillary and some of the fee changes roll out.

[Dillon Heslin, Research Associate at Roth Capital Partners]

Got it. Thank you. That's it for me.

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

Thanks, Sean.

[Operator]

Thank you. Your next question is coming from Steven Sheldon from William Blair. Your line is live.

[Stephen Sheldon, Research Analyst - Technology, Media & Communications at William Blair & Company, L.L.C]

Hey. Good morning. Thanks. And congrats on the strong start to the year. And it's both incredible and scary how much that sounded like you, Tamir.

[Stephen Sheldon, Research Analyst - Technology, Media & Communications at William Blair & Company, L.L.C]

So maybe just on that topic with voice AI, you know, it sounds like you guys have been playing around with it quite a bit. Where do you see the opportunities to take voice AI and kind of leverage it, I guess, within the value proposition, for agents? How are you guys thinking about that?

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

Thanks, Steven. Actually, my mom couldn't distinguish between my actual voice and my AI voice. So, yeah, it's pretty scary, but also opens up your mind to a lot of possibilities. I think that when it comes to AI and especially voice application of AI, we see we see it in in two ways. First of all, later this month, we're gonna transition LEO phone line, agent support phone line to my voice.

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

So agents who call in to our support line will be answered by my voice and can have a conversation with me. We're currently testing real life conversations between Leo and potential buyers and sellers, so Leo can can now have a conversation about what is your desired property, what are you looking for, what's your financial situation, if you wanna schedule a showing at a specific house. Leo can already do that, which is extremely impressive. So I think that moving forward, we will continue to expand LEO capabilities with supporting our agents internally and just saving us a lot of overhead and, you know, human capital when it comes to internal support, but at the same time, I think that the biggest potential is equipping our agents with a phone number where they can actually train their own AI to use their own voice and then take their clients' phone calls and answer all of their questions. And in addition to that, throughout that process, I think that lies a tremendous opportunity to also push our ancillary services through those direct interactions that LEO will have with consumers.

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

So this is where we're heading. It's it's moving very quickly. And and as I said, even this month, we will experiment with some things that I don't think that anybody else in the industry is is trying to do.

[Stephen Sheldon, Research Analyst - Technology, Media & Communications at William Blair & Company, L.L.C]

Got it. Yeah. It'll be fascinating to see how that that all progresses. And then just maybe on the the agent recruiting side, you guys are are becoming more and more of an outlier in the industry by growing agent count when most are losing agents. So I guess, is there any part of Reel's value proposition that's really resonating right now or initiatives like private label and proteins that are gaining even more traction?

[Stephen Sheldon, Research Analyst - Technology, Media & Communications at William Blair & Company, L.L.C]

Is there anything that when you look out there that stands out as having an outsized impact on your ability to recruit in this environment?

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

Yeah, can take that. I think that on agent attraction, what we've been doing very well for many years now is finding the right balance between providing value and constantly growing that value and the cost of operating on our platform. And I think that with all the technological advances and innovation that we're planning and also putting into place at the moment, that value only increases. So you mentioned private label and proteins. It's a part of the mix.

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

At the end of the day, agents join us either as solo independent agents or as teams or as brokerages that are coming in under private label, but we don't think that there is any one specific reason at the moment that we can identify that agents are joining because of it. It's a combination of value and cost at the end of the day.

[Stephen Sheldon, Research Analyst - Technology, Media & Communications at William Blair & Company, L.L.C]

Got it. That's helpful. And then just last one for me. On on the conversion of some employees in India to full time, get that there won't be a financial impact, think a material financial impact, but will that have any changes on ability to get products and capabilities to market on the development side? Yeah.

[Stephen Sheldon, Research Analyst - Technology, Media & Communications at William Blair & Company, L.L.C]

I guess just generally, how could this impact speed to market for some of the initiatives you have underway?

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

Yeah. There wouldn't be any financial impact. I think that as you bring in independent contractors and turn them into employees and a part of the family, maybe the connection, the bond, the commitment is a little bit stronger. We are expanding that team, so it will be difficult to, you know, to compare apples to apples just because that team is continuously growing, but I think that it's a positive move overall that, yes, will help us with time to market.

[Stephen Sheldon, Research Analyst - Technology, Media & Communications at William Blair & Company, L.L.C]

Great, thank you.

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

Thanks, Steven.

[Ravi Jani, CFO at The Real Brokerage]

Thanks, Steven.

[Operator]

Thank you. Your next question is coming from Matthew Erdner from Jones Trading. Your line is live.

[Matthew Erdner, Director at Jones Trading]

Hey, good morning guys. I'd like to build off of that last question a little bit. And then again, congrats on a great quarter. But with regard to the pipeline, are you guys still seeing the same growth at kind of the top of the funnel there? And then as you brought on kind of more people recently, has the onboarding time changed at all, you know, when you guys are bringing on these teams or private label brokerages?

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

Thanks, Matt. Yeah, the pipeline is still very strong. We've added about 900 agents since the beginning of the quarter, and we have a strong pipeline, as I mentioned. I don't see any change in the onboarding time. What we do see is maybe more pain overall in the industry.

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

The market conditions are very challenging for agents, so obviously that has an effect on, you know, agent movements and teams movements. We're getting into the selling season, the summer season of the housing market, which is typically slower for agent transitions. But overall, I think that we still have a very strong pipeline and we didn't see any significant change either way.

[Matthew Erdner, Director at Jones Trading]

Got it. That's helpful. And then sorry, Robbie, go ahead.

[Ravi Jani, CFO at The Real Brokerage]

Yeah. Matt, I just wanted to add that Jenna Rosenblatt and her team, they've added a ton of talent on the agent success, agent experience and onboarding side. And so, as private label and pro teams have grown, we've added some really skilled leaders that are doing a great job onboarding teams. So, relative to a year ago, it is getting smoother, but it's because we put the resources in place.

[Matthew Erdner, Director at Jones Trading]

Right. That's great. And then as a follow-up switching to ancillary services, looking at title and mortgage kind of on that slide 32 where you guys are located, how much additional, I guess, do you think you could pick up by getting license in all 50 states? And how big of a priority is that for you guys to kind of get rolled out in all 50 states? And then, yeah, I guess just what are your thoughts there?

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

Yeah, at the moment we're not looking to expand to all 50 states, either on title or mortgage. I think that we have a lot of work to do within the geographies that we're already in. So that's what we focus on. On the title side, we did identify that we had a service level issue that we corrected, and now we go out to our agents, and as Ravi mentioned, we're changing a little bit the JV structure, going from stage AV from team focused JVs to stage AVs, and we're starting to see the revenue ramping up. Both mortgage and title had record revenue month in April, so we're seeing a lot of momentum, but we just think that it's better for us to focus on the markets that they operate in at the moment instead of going and trying to expand to all 50 states.

[Matthew Erdner, Director at Jones Trading]

Got it. That's helpful. Thank you, guys.

[Operator]

Thank you. There are no further questions from analysts in the queue. I'll now hand the floor over to CFO, Ravi Jani, for questions from retail investors.

[Ravi Jani, CFO at The Real Brokerage]

Great. Thank you, Matthew. And so now that we've concluded the analyst portion, we wanted to address some of the questions we received from shareholders on the SAIT Technologies Q and A portal that was opened last week. We received a number of excellent questions. And so thank you to all who participated.

[Ravi Jani, CFO at The Real Brokerage]

First question for Tamir is a combination of two questions, but what acquisitions or tech developments are on the horizon that serve RIIO's agents? And how does RIIO plan to prioritize in house R and D versus external partnerships or subscriptions?

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

Thank you everybody for the questions. Obviously technology is something I'm very passionate about, and we are highly active in evaluating M and A and tech opportunities that could add unique capabilities or accelerate the time to market for us. As you know, the prop tech industry has seen billions of dollars in investment over the past few years, and now many of these companies are trading at far more compelling valuations than just twelve or eighteen months ago. That said, we'll stay disciplined and we'll only pursue opportunities that truly enhance our agent value proposition and add differentiated capabilities, improve retention and or improve productivity. And so we'll always invest organically in our own platform in things like AI and FinTech, which we've been focused on in the past year and a half, but we see an opportunity to add features or feature set that we don't have, we'll be opportunistic as long as we believe it creates value for our agents and our shareholders.

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

And as I said at the beginning, we remain very active in looking into potential M and A opportunities.

[Ravi Jani, CFO at The Real Brokerage]

Great. Thanks, Tamir. Next question for Sharan. What is Real investing in with regards to agent support, technology, and growth opportunities?

[Sharran Srivatsaa, President at The Real Brokerage]

Awesome. Thank you, Ravi. We're actually investing across the board. Now, whether it may be AI tools and technology, as you heard Tamir talk about, to make agents productive because the more time they can spend taking care of their operating needs, the less time they can spend on their operating needs, the more time they can spend with their clients. And then developing these fintech products like the RealWallet to give agents more financial flexibility, especially in a time like this where there's kind of up and down in market volatility.

[Sharran Srivatsaa, President at The Real Brokerage]

Also, as the markets change, we're expanding our operations and support infrastructure, maybe broker support or Tom talked about, kind of support for agents to get their back of the office stuff done much faster so they can be a bigger and a better service advisor to our clients. And of course, this is not a one time non changing thing. We're sticking to our strategy and always looking for more ways to find and make our agents more productive and of course to generate more income for them.

[Ravi Jani, CFO at The Real Brokerage]

Great. Thanks, Ron. Next question I'll take, which is how is Real balancing fiscal responsibility with growth and expansion given the industry slowdown? As you know, we've been disciplined from day one. We're focused on building a business with strong unit economics.

[Ravi Jani, CFO at The Real Brokerage]

And even as the broader market has contracted the past several years, we've continued to grow and improve profitability by keeping our cost structure lean and leveraging technology. And so at the same time, we're continuing to invest in high impact areas in technology and agent support and other initiatives that support long term growth. But we're always going to be very disciplined and focused on costs and execution. And we're fortunate that our balance sheet remains in a really strong place. We have $35,000,000 in cash, no debt.

[Ravi Jani, CFO at The Real Brokerage]

And so we can continue to invest in our business, support our agents while also returning capital to shareholders via share repurchases like we did this quarter. And so the last question for Tamir, As the role of the MLS in real estate continues to evolve, what is REAL's perspective on its future and what strategic adjustments is REAL making?

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

Thanks for the question. There's been a lot of noise in the industry around the role of the MLS, and it's true that the landscape is evolving as one of the largest brokerage in the country. A lot of companies are involving us in their ideas or their initiatives and trying to kind of collaborate with us on that, but at Real, our perspective is pretty simple. Any change in how homes are listed and discovered should ultimately benefit the consumer. Some companies are approaching this from a lens of trying to gain a competitive advantage, but we're focused on what delivers the best possible experience for buyers and sellers.

[Tamir Poleg, Chairman and CEO at The Real Brokerage]

The reality is, the more exposure a listing has, the better the outcome. This is what we believe in, and that's the foundation of an efficient marketplace. So while the MLS conversations will likely continue, here at REAL we'll stay focused on building for the future.

[Ravi Jani, CFO at The Real Brokerage]

Thanks, Damir. I think it's a great way to wrap it up. If you have any additional questions on today's earnings release, please feel free to contact me directly. Matthew, would you please give the conference call replay instructions once again? Thank you.

[Operator]

Certainly. Ladies and gentlemen, today's conference will be available for replay. The replay phone number is (877) 481-4010 and the replay code is 52080. Once again, the replay phone number is (877) 481-4010, and the replay code is 52080. You may disconnect your phone lines at this time, and have a wonderful day.

[Operator]

Thank you for your participation.

Participants

Executives

• Alix Lumpkin, Chief Legal Officer
• Tamir Poleg, Chairman and CEO
• Sharran Srivatsaa, President
• Ravi Jani, CFO

Analysts

• Dillon Heslin, Research Associate at Roth Capital Partners
• Stephen Sheldon, Research Analyst - Technology, Media & Communications at William Blair & Company, L.L.C
• Matthew Erdner, Director at Jones Trading