reAlpha Tech (AIRE) - 2026 Q1 - Quarterly Results

Q2 2025 Performance Overview Summarizes reAlpha Tech Corp.'s financial results and key business developments for Q2 2025 Financial Highlights reAlpha Tech Corp. reported substantial revenue growth in Q2 2025, primarily driven by mortgage brokerage transactions, but experienced increased net losses and a decline in gross profit margin year-over-year, alongside a significant decrease in cash Key Financial Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 ($) | Q2 2024 ($) | Change (%) | | :-------------------- | :------------ | :------------ | :--------- | | Revenue | 1,300,000 | 62,353 | 1,909% | | Cash (period end) | 587,311 | 3,700,000 | -84.1% | | Gross Profit | 621,465 | 44,103 | 1,309% | | Gross Profit Margin | 50% | 71% | -21 ppts | | Adjusted EBITDA | (3,500,000) | (1,100,000) | -218% | | Net Loss | (4,100,000) | (1,500,000) | -173% | - The increase in gross profit was primarily driven by mortgage brokerage transactions provided by subsidiaries, reAlpha Mortgage and GTG Financial, Inc., which included loan origination fees, broker commissions, and processing fees[5] - Gross profit margin declined from 71% to 50% year-over-year, reflecting higher cost of revenue from delivering loan brokerage services and technology solutions[5] Business Highlights reAlpha made significant strategic and operational advancements, including key leadership appointments, the launch of an AI-powered Loan Officer Assistant, early repayment of a secured promissory note, expansion into new markets, and integration of its technology platform - Mike Logozzo was appointed Chief Executive Officer in June 2025, succeeding founder Giri Devanur, who now serves as Executive Chairman[6] - Launched a proprietary AI-powered Loan Officer Assistant to streamline mortgage operations, automating key loan origination tasks and showing an approximately 60% reduction in manual document preparation time[6] - Fully repaid the approximately $4.47 million principal balance outstanding on its $5.45 million secured promissory note to Streeterville Capital prior to its scheduled maturity, strengthening the balance sheet[6] - Appointed Cristol Rippe as Chief Marketing Officer to lead brand, marketing, and communications, bringing over 20 years of experience in fintech and real estate[9] - Implemented a new internal organizational structure, transitioning to a functional model to enhance operational efficiency and cross-functional coordination[9] - Expanded its AI-powered homebuying platform into Texas with real estate brokerage services and entered the Utah mortgage market, marking the first step in its national rollout strategy[9] - Rebranded 'Be My Neighbor' to 'reAlpha Mortgage' and strengthened its leadership with new CEO and Chief Sales Officer appointments, along with onboarding five high-performing loan officers[9] - Launched a redesigned website and fully integrated its customer relationship management (CRM) platform across real estate and mortgage operations to automate lead capture and pipeline management[9] Company Information Outlines reAlpha Tech Corp.'s business model and includes disclosures on forward-looking statements About reAlpha Tech Corp. reAlpha Tech Corp. is an AI-powered real estate technology company focused on transforming the U.S. real estate services market by developing an end-to-end platform for homebuying, including brokerage, mortgage, and title services, through an acquisition-driven growth model - reAlpha Tech Corp. (Nasdaq: AIRE) is an AI-powered real estate technology company transforming the multi-trillion dollar U.S. real estate services market[7] - The company is developing an end-to-end platform that streamlines the homebuying journey, including real estate brokerage, mortgage, and title services[7] - reAlpha is building a vertically integrated ecosystem designed to deliver a streamlined and more affordable path to homeownership, utilizing a strategic, acquisition-driven growth model and proprietary AI infrastructure[7] Forward-Looking Statements This section outlines the forward-looking nature of certain statements within the press release, emphasizing that actual results may differ materially due to various risks and uncertainties, and advises readers not to place undue reliance on these statements - The press release includes forward-looking statements, identifiable by terminology such as 'may', 'should', 'expect', 'intend', 'will', 'estimate', 'anticipate', 'believe', 'predict', 'potential' or 'continue'[8] - Factors that may cause actual results to differ materially include reAlpha's ability to pay contractual obligations, liquidity, operating performance, ability to secure adequate financing, limited operating history, technology acceptance, commercialization of AI, market entry, integration of acquired businesses, loss of key employees, legal proceedings, licensing, and ability to identify and acquire complementary companies[8][10] - Readers are cautioned not to put undue reliance on forward-looking statements, and reAlpha does not undertake any obligation to update or revise any forward-looking statements, except as required by law[10] Condensed Consolidated Financial Statements Presents reAlpha Tech Corp.'s condensed consolidated balance sheets, statements of operations, and cash flows Condensed Consolidated Balance Sheet The balance sheet as of June 30, 2025, shows an increase in total assets and total liabilities compared to December 31, 2024, primarily driven by growth in current assets and deferred liabilities, while cash significantly decreased and stockholders' equity shifted to a deficit Condensed Consolidated Balance Sheet Highlights | Metric | June 30, 2025 ($) | December 31, 2024 ($) | | :-------------------------------- | :------------ | :---------------- | | Cash | 587,311 | 3,123,530 | | Total Current Assets | 5,061,607 | 4,043,098 | | Total Assets | 15,517,538 | 11,994,458 | | Total Current Liabilities | 9,488,487 | 4,145,437 | | Total Liabilities | 16,618,018 | 10,426,986 | | Total Stockholders' (Deficit) Equity | (1,100,480) | 1,567,472 | Condensed Consolidated Statements of Operations and Comprehensive Loss The statements of operations indicate substantial revenue growth for both the three and six months ended June 30, 2025, compared to the prior year, but also a significant increase in operating expenses and net loss, reflecting increased investment in growth and operations Statements of Operations Highlights (Three Months Ended June 30) | Metric | Q2 2025 ($) | Q2 2024 ($) | | :-------------------------- | :------------ | :------------ | | Revenues | 1,252,381 | 62,353 | | Cost of revenues | 630,916 | 18,250 | | Gross Profit | 621,465 | 44,103 | | Total operating expenses | 4,710,595 | 1,253,498 | | Operating Loss | (4,089,130) | (1,209,395) | | Net Loss | (4,110,016) | (1,478,312) | | Basic loss per share | (0.08) | (0.03) | Statements of Operations Highlights (Six Months Ended June 30) | Metric | H1 2025 ($) | H1 2024 ($) | | :-------------------------- | :------------ | :------------ | | Revenues | 2,178,016 | 82,779 | | Cost of revenues | 1,037,884 | 36,499 | | Gross Profit | 1,140,132 | 46,280 | | Total operating expenses | 7,651,521 | 2,488,704 | | Operating Loss | (6,511,389) | (2,442,424) | | Net Loss | (6,960,368) | (2,897,357) | | Basic loss per share | (0.14) | (0.07) | Consolidated Statements of Cash Flows For the six months ended June 30, 2025, reAlpha experienced a significant net cash outflow from operating activities, partially offset by net cash provided by financing activities, resulting in a net decrease in cash and a lower cash balance at period end compared to the prior year Cash Flow Highlights (Six Months Ended June 30) | Activity | H1 2025 ($) | H1 2024 ($) | | :-------------------------------------- | :------------ | :------------ | | Net cash used in operating activities | (4,602,029) | (2,550,879) | | Net cash provided by (used in) investing activities | 191,132 | (79,423) | | Net cash provided by (used in) financing activities | 1,874,264 | (143,885) | | Net decrease in cash | (2,536,633) | (2,774,187) | | Cash - End of Period | 587,311 | 3,682,327 | - Non-cash investing and financing activities included preferred stock issuance for MMC and GTG Financial transactions, deferred cash payments for GTG Financial, and common stock issuance for GTG acquisition and Streeterville Capital, LLC[18] Non-GAAP Financial Measures Provides a reconciliation of non-GAAP financial measures, specifically Adjusted EBITDA, to comparable GAAP financial measures Adjusted EBITDA Reconciliation reAlpha uses Adjusted EBITDA as a non-GAAP financial measure to evaluate operating performance, excluding non-cash, non-operating, or non-recurring items, showing an increased adjusted loss for both the three and six months ended June 30, 2025 - Adjusted EBITDA is used to evaluate ongoing operations and for internal planning and forecasting, providing consistency and comparability with past financial performance[19] - Adjusted EBITDA is reconciled to net income (loss) by excluding interest expense, depreciation and amortization, changes in fair value of contingent consideration and preferred stock, share-based compensation, and other non-cash, non-operating, or non-recurring items[20] Adjusted EBITDA (Q2 and H1 2025 vs 2024) | Metric | Q2 2025 ($) | Q2 2024 ($) | H1 2025 ($) | H1 2024 ($) | | :---------------- | :------------ | :------------ | :------------ | :------------ | | Net loss | (4,110,016) | (1,478,312) | (6,960,367) | (2,897,357) | | Adjusted EBITDA | (3,474,092) | (1,147,511) | (5,286,097) | (2,236,601) |