Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $354 million, a 76% increase compared to $201 million in Q1 2024, driven by a 77% increase in closed transactions to 33,600 [8][27] - Gross profit increased to $33.9 million, up 63% from $20.8 million in the prior year, while net loss improved to $5.1 million from a loss of $16.1 million [8][32] - Adjusted EBITDA rose to $8.3 million, more than doubling from $3.6 million in Q1 2024 [9][33] - The company ended the quarter with net unrestricted cash and investments of approximately $35 million, up from $33 million at year-end [33] Business Line Data and Key Metrics Changes - Brokerage revenue reached $352 million, contributing significantly to overall revenue growth, while ancillary businesses generated $2.2 million, a 50% year-over-year increase [27][28] - OneReal Mortgage saw a 55% increase in revenue, and OneReal Title grew by 30% [28] - RealWallet generated $126,000 in revenue during its first full quarter, with an annualized run rate exceeding $700,000, up from $500,000 previously [13][29] Market Data and Key Metrics Changes - The existing home sale industry experienced a 2% decline in transactions, contrasting with the company's 77% increase in closed transactions [8][16] - The median sale price was $380,000, reflecting a 2% year-over-year increase [34] Company Strategy and Development Direction - The company aims to redefine the role of real estate brokerage by providing agents with financial incentives, a technology platform, and a collaborative culture [6][7] - The long-term vision includes creating a holistic ecosystem of financial technology products and investment planning tools for agents [6] - The company is focusing on enhancing its technology platform and high-margin ancillary businesses to drive margin expansion and operating leverage [10][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain operating environment but expressed confidence in the company's model designed to thrive in any market condition [37][38] - The rise of AI is seen as a transformative opportunity, with the company actively investing in innovation and technology to enhance agent productivity [37][39] Other Important Information - The company transitioned all inbound agent support calls to LEO, its AI-powered assistant, which now handles thousands of interactions daily [10][41] - The agent count increased to 26,870, a 61% rise year-over-year, with over 800 agents added since the start of Q2 [9][10] Q&A Session Summary Question: Agent adoption of AI and LEO services - Management indicated that LEO is currently focused on improving service to agents, handling inbound calls and providing support for compliance and tech-related questions [41][42] Question: Trends in gross margins and capping - Management noted that a higher mix of capped agents is expected to continue impacting gross margins, but fee changes and growth in ancillary services will help offset this [43][44] Question: Opportunities with voice AI - Management discussed plans to leverage voice AI for agent support and consumer interactions, enhancing the value proposition for agents [48][49] Question: Agent recruiting and value proposition - Management emphasized the importance of providing value and maintaining a balance between cost and service to attract agents, with no single factor driving recruitment [51][52] Question: Impact of converting contractors to full-time employees - Management stated that this transition would strengthen team commitment and potentially improve time to market for product initiatives [54] Question: Growth pipeline and onboarding - Management confirmed a strong pipeline with no significant changes in onboarding times, despite challenging market conditions [58][61] Question: Expansion to all 50 states for ancillary services - Management clarified that the focus remains on improving operations within current markets rather than expanding to all states at this time [62]

Company Overview - The Real Brokerage Inc was founded in 2014 and aims to disrupt the traditional real estate brokerage model by offering agents higher value at a lower cost[11] - The company's vision is to redefine the home buying and selling process and enable agents to build long-term wealth[11] Financial Performance - The company's last twelve months revenue as of Q1 2025 was $1418 million[13] - The company's last twelve months Adjusted EBITDA as of Q1 2025 was $446 million[15] - As of Q1 2025, the company had 26870 agents[13] - The company's gross profit for the three months ended March 31, 2025, was $33936 thousand[164] Agent Value Proposition - The company offers a competitive 85%/15% commission split, favoring agents, with agents keeping all gross commission income after reaching a $12000 annual cap[40] - The company provides a revenue sharing model where agents can earn additional income by receiving a percentage of commissions generated by agents they attract to Real[40] Technology and Innovation - The company's proprietary software platform, reZEN, offers a comprehensive range of tools for real estate agents[54] - The company launched Real Wallet in Q4 2024, offering a Real-branded debit card for U S agents and a business line of credit for Canadian agents, generating $126K in revenue in Q1 2025[60,62] Market Position and Growth - Since 2021, Real has grown agent count by over 6x, even as the Existing Home Sales market has declined by over 30% during that time[24] - The company represents less than 2% of the US agent market share[72]

Group 1 - Real Brokerage (NASDAQ: REAX) is recognized as an impressive disruptor in the market, although it is currently trading at an expensive valuation due to its superior long-term growth prospects [1] - The stock has experienced a decline since the last analysis, indicating potential volatility in its market performance [1] Group 2 - The author expresses a focus on value investing, particularly in emerging markets, and admires renowned investors like Li Lu and Peter Lynch [1] - The investment philosophy emphasizes an owner-mindset while largely ignoring macroeconomic noise, suggesting a long-term investment strategy [1] - The author has been influenced by Austrian economic thinkers and highlights the importance of clear and logical economic reasoning in investment decisions [1]

Financial Data and Key Metrics Changes - The company reported record fourth quarter and full year 2024 results, with total transaction value reaching $49 billion, up 90% year over year, while revenue grew to $1.3 billion, marking an increase of 84% from $689 million in 2023 [12][13] - Gross profit in 2024 grew 82% year over year to $115 million, while adjusted EBITDA reached a record $40 million, up 188% from the prior year [13][49] - The company ended the year with a net loss attributable to owners of $26.5 million, compared to a net loss of $27.5 million in 2023 [48] Business Line Data and Key Metrics Changes - For the full year 2024, mortgage and title services grew by a combined 105%, with over 200% growth at One Real Mortgage and 60% growth at One Real Title [20][23] - Revenue from ancillary businesses totaled $2.5 million during the fourth quarter of 2024, an increase of 176% versus the fourth quarter of 2023 [50] Market Data and Key Metrics Changes - The total value of homes transacted over the platform increased to $14.6 billion in the fourth quarter of 2024, a 115% year over year increase [62] - The median sale price of properties sold by agents was $380,000 in the fourth quarter of 2024, representing a 7% year over year increase [62] Company Strategy and Development Direction - The company aims to redefine the role of a real estate brokerage by providing agents with a technology platform that eliminates the need for physical office space and enhances their ability to grow their businesses [8][11] - The long-term vision includes creating a holistic ecosystem of financial technology products and investment planning tools for agents [10] Management's Comments on Operating Environment and Future Outlook - Management noted that many in the broader real estate sector are waiting for a market recovery, but the company is focused on building for the future despite existing home sales remaining near historic lows [14] - The company expects to deliver significant year over year improvement in revenue, gross profit, and adjusted EBITDA in 2025, although the first quarter is expected to be the lowest of the year for revenue [45][49] Other Important Information - The company transitioned its financials to U.S. GAAP, which had no notable impact from prior periods [46] - The company has made changes to its business model, including increasing transaction fees and adjusting commission caps to better reflect operational costs [24][25] Q&A Session Summary Question: What contributed to the strong performance in Q4 despite seasonal trends? - Management attributed the strong performance to significant growth and market share gains, particularly in December [76] Question: What are the expectations for the ancillary business growth? - Management expressed confidence in the growth of the ancillary services, particularly with the new leadership in place for One Real Title [79][80] Question: What is the outlook for agent recruitment and team expansion? - Management indicated that the agent recruitment pipeline is strong, with expectations of continued momentum into 2025 [88] Question: How does the company plan to scale the Real Wallet product? - Management noted that they are in the process of hiring a general manager for Real Wallet and expect to see rapid adoption and revenue growth [104] Question: What are the unit economics of Title and Mortgage transactions? - Management highlighted that combining Title and Mortgage transactions with brokerage transactions significantly increases revenue and gross profit [114][116]

Core Insights - The Real Brokerage Inc. reported a quarterly loss of $0.03 per share, better than the Zacks Consensus Estimate of a loss of $0.05, and an improvement from a loss of $0.07 per share a year ago, representing a 40% earnings surprise [1] - The company achieved revenues of $350.63 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 16.67% and showing significant growth from $181.34 million in the same quarter last year [2] - The stock has increased approximately 7.6% since the beginning of the year, contrasting with a -0.7% decline in the S&P 500 [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.02 on revenues of $301.18 million, and for the current fiscal year, it is -$0.08 on revenues of $1.51 billion [7] - The estimate revisions trend for The Real Brokerage is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Technology Services industry, to which The Real Brokerage belongs, is currently ranked in the top 27% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Company Performance - The Real Brokerage Inc. reported a quarterly loss of $0.01 per share, better than the Zacks Consensus Estimate of a loss of $0.04, and improved from a loss of $0.02 per share a year ago, representing an earnings surprise of 75% [1] - The company posted revenues of $372.49 million for the quarter ended September 2024, exceeding the Zacks Consensus Estimate by 11.32%, and up from $214.64 million in the same quarter last year [2] - Over the last four quarters, The Real Brokerage has surpassed consensus EPS estimates two times and topped consensus revenue estimates four times [2] Stock Performance - The Real Brokerage shares have increased approximately 252.5% since the beginning of the year, significantly outperforming the S&P 500's gain of 24.3% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.05 on revenues of $292.23 million, and for the current fiscal year, it is -$0.18 on revenues of $1.17 billion [7] Industry Outlook - The Technology Services industry, to which The Real Brokerage belongs, is currently ranked in the top 28% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5]

Core Viewpoint - The sustainability of a trend is crucial for successful short-term investing, and confirming fundamental factors is essential to maintain momentum in stocks [1][2]. Group 1: Stock Performance - The Real Brokerage Inc. (REAX) has shown a solid price increase of 19.7% over the past 12 weeks, indicating strong investor interest [4]. - In the last four weeks, REAX has maintained a price increase of 12.7%, suggesting that the upward trend is still intact [5]. - REAX is currently trading at 94.9% of its 52-week high-low range, indicating a potential breakout [5]. Group 2: Fundamental Strength - REAX holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7]. Group 3: Investment Strategy - The "Recent Price Strength" screen is a useful tool for identifying stocks like REAX that have the fundamental strength to maintain their recent uptrend [3]. - There are additional stocks that meet the criteria of the "Recent Price Strength" screen, providing further investment opportunities [8].

Financial Data and Key Metrics Changes - Revenue for Q2 2024 increased by 84% year-over-year to $341 million, driven by a 73% increase in closed transactions and a 6% increase in average revenue per transaction [6][18] - Gross profit reached a record $31.9 million, up 79% from $17.8 million in Q2 2023, with adjusted EBITDA improving to $14 million from $2.6 million in the prior year [7][22] - Net loss narrowed to $1.2 million in Q2 2024 compared to a net loss of $4.1 million in Q2 2023 [22] Business Line Data and Key Metrics Changes - Ancillary businesses, including mortgage and title services, grew by 68% year-over-year, with One Real Mortgage experiencing a 160% increase [8][18] - The number of agents increased by 70% year-over-year to 19,500, with an additional 1,000 agents added since the start of Q2 2024 [7][24] Market Data and Key Metrics Changes - The total value of homes transacted over the platform increased to $12.6 billion, an 80% year-over-year increase, while the median sales price of properties sold was $384,000, representing a 4% increase [24] - Canada accounted for 12% of commission revenue in Q2 2024, down from 15% in the same quarter of the previous year [24] Company Strategy and Development Direction - The company aims to redefine the role of real estate brokerage by providing agents with financial incentives, a proprietary technology platform, and a collaborative culture [4][5] - The long-term vision includes developing a holistic ecosystem of financial technology products and enhancing the consumer experience through the One Real mobile app [5][6] - The company is focused on agent growth and improving agent experience through innovative programs and training initiatives [11][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macroeconomic environment, with existing home sales declining year-over-year, but emphasized the company's strong performance in this context [8][9] - The company remains optimistic about growth prospects and is committed to innovation and enhancing agent support [17][30] Other Important Information - The company ended Q2 2024 with approximately $33.6 million in unrestricted cash and investments, maintaining a strong balance sheet with no debt [23] - The company is preparing agents for upcoming NAR rule changes through extensive training programs [16][50] Q&A Session Summary Question: What is the focus on agent churn rate? - Management noted that a significant portion of churn is due to agents doing one or fewer transactions, and they are closely monitoring churn metrics while providing operational support to agents [33][34] Question: What is the strategy to increase attach rates for ancillary services? - Management highlighted the focus on creating joint ventures with large teams and embedding title services into the consumer app to enhance the overall experience [36] Question: Are there opportunities for acquisitions? - Management remains open to acquisitions but believes they currently have the necessary components to build their tech roadmap without significant new investments [40] Question: How does Real Brokerage's value proposition compare to competitors? - Management emphasized their entrepreneurial-centric model, technology platform, and favorable economics as key differentiators that attract agents [52][54] Question: How is the company preparing for the NAR settlement changes? - Management is conducting extensive training to ensure agents are aligned with the new practices required by the settlement [50][51]

Group 1: Earnings Performance - The Real Brokerage Inc. reported a quarterly loss of $0.01 per share, better than the Zacks Consensus Estimate of a loss of $0.02, representing a 50% earnings surprise [1] - The company posted revenues of $340.78 million for the quarter ended June 2024, exceeding the Zacks Consensus Estimate by 29.06%, compared to $185.33 million in the same quarter last year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates two times and topped consensus revenue estimates four times [2] Group 2: Stock Performance and Outlook - The Real Brokerage shares have increased approximately 241.3% since the beginning of the year, significantly outperforming the S&P 500's gain of 9.9% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.02 on revenues of $293.68 million, and for the current fiscal year, it is -$0.17 on revenues of $1.02 billion [7] - The estimate revisions trend for The Real Brokerage is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Group 3: Industry Context - The Technology Services industry, to which The Real Brokerage belongs, is currently in the top 40% of over 250 Zacks industries, suggesting a favorable outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Revenue in Q1 2024 increased to $201 million, an 86% rise compared to Q1 2023, driven by a 74% increase in closed transactions and a 7% increase in average revenue per transaction [19][88] - Gross profit reached $20.8 million, a 92% increase from $10.8 million in Q1 2023, with a gross margin of 10.3%, reflecting a 30 basis point improvement year-over-year [7][88] - Net loss was $16.1 million in Q1 2024, including $9.9 million in litigation expenses, compared to a net loss of $7.4 million in Q1 2023 [23] - Adjusted EBITDA improved to $3.6 million in Q1 2024, a significant improvement from negative $800,000 in Q1 2023 [23][88] Business Line Data and Key Metrics Changes - Brokerage revenue saw an 86% increase, with closed transactions exceeding 19,000 [19][88] - Revenue from ancillary businesses totaled $1.5 million, a 104% increase year-over-year, driven by a 427% growth in One Real Mortgage and a 33% growth in One Real Title [20][89] - Adjusted operating expense per transaction declined 18% year-over-year to $715, down from $870 [24] Market Data and Key Metrics Changes - The total value of homes transacted over the platform increased to $7.5 billion, an 88% year-over-year increase [24] - Canada accounted for 13% of commission revenue in Q1 2024, up from 11% in Q1 2023 [11] Company Strategy and Development Direction - The company aims to redefine the role of real estate brokerage by providing agents with financial incentives, a proprietary technology platform, and a collaborative culture [86][87] - The rollout of the One Real consumer-facing mobile app is expected to enhance client experience and increase attachment of higher-margin ancillary services [86][91] - The company anticipates that disruptions within traditional brokerages will drive greater consolidation across the industry, positioning itself as a consolidator [28] Management's Comments on Operating Environment and Future Outlook - The management views the NAR settlement as an opportunity rather than a challenge, expecting to emerge stronger from the changes [26] - The company remains optimistic about the outlook for the year, citing a robust open transaction pipeline that is currently at an all-time high, up over 75% year-over-year [90] - Despite a volatile interest rate environment, the company continues to grow rapidly due to its differentiated business model [90] Other Important Information - The company ended Q1 2024 with unrestricted cash and investments of approximately $34.5 million, an increase of $5.6 million from the end of 2023 [10] - The company is making strategic hires for onboarding and agent experience teams to support the growing agent count [25] Q&A Session Summary Question: Impact of NAR settlement on pipeline of new agents and teams - Management indicated that many brokerages are inquiring about the Private Label and ProTeams offerings, viewing Real as a potential destination for agents seeking better opportunities [31][32] Question: Revenue churn and retention of productive teams - Revenue churn was reported at 1.9%, the lowest in years, with management expressing confidence in retaining high-performing teams [33][34] Question: Timeline for onboarding teams - The onboarding process can take between 45 to 90 days, depending on the team's size and readiness, while the actual activation can occur within 24 hours once a decision is made [41] Question: Percentage of transactions captured by One Real Mortgage - The attach rate for One Real Mortgage is currently below 2%, but the company anticipates growth as they scale responsibly [45] Question: Plans to attract institutional investors - The company aims to attract more institutional investors by delivering exceptional results and sustainably compounding earnings and cash flow per share [82]