The Real Brokerage(REAX) - 2023 Q1 - Quarterly Report

Financial Performance - Total revenues for the period ended March 31, 2023, were $107,845 thousand, representing a 74.9% increase from $61,649 thousand in the same period of 2022[6] - Gross profit for the same period was $10,808 thousand, up from $5,862 thousand, indicating an increase of 84.5%[6] - Net loss attributable to owners of the company for Q1 2023 was $7,395 thousand, compared to a net loss of $4,313 thousand in Q1 2022, reflecting a 71.9% increase in losses[6] - Total revenue for the period ended March 31, 2023, was $107.845 million, a 74.9% increase from $61.649 million in the same period of 2022[32] - Commissions accounted for $105.606 million of total revenue, up from $60.506 million year-over-year, reflecting a significant growth in sales activity[32] - Total expenses for the period were $114.883 million, compared to $65.916 million in the prior year, indicating a 74.3% increase[34] - The Company reported a basic and diluted loss per share of $(0.04) for the period ended March 31, 2023, compared to $(0.03) for the same period in 2022[38] Assets and Liabilities - Total assets as of March 31, 2023, were $52,248 thousand, an increase of 19.4% from $43,762 thousand as of December 31, 2022[5] - Current liabilities increased to $31,482 thousand as of March 31, 2023, compared to $21,105 thousand at the end of 2022, marking a 49% rise[5] - Cash, cash equivalents, and restricted cash balance at the end of Q1 2023 was $26,411 thousand, down from $28,988 thousand at the end of Q1 2022[10] - Cash balance as of March 31, 2023 was $10,975 thousand, slightly up from $10,846 thousand at December 31, 2022[70] - Total financial assets not measured at fair value increased to $27,885 thousand as of March 31, 2023, compared to $19,948 thousand at December 31, 2022[76] - Total other payables decreased from $1,188 thousand at December 31, 2022 to $713 thousand at March 31, 2023, with bonus payables increasing from $203 thousand to $548 thousand[73] Cash Flow and Investments - Operating activities generated net cash of $9,278 thousand for the period, compared to $10,625 thousand in the same period last year, a decrease of 12.7%[10] - The estimated fair value of short-term investments increased to $8.49 million as of March 31, 2023, from $7.89 million at the end of 2022[58] - The Company’s investment securities portfolio consists mainly of cash investments and debt securities, with maturity dates ranging from less than one year to over 20 years[59] - The total cash and cash equivalents held by the Company are primarily for meeting short-term cash commitments[54] Stock-Based Compensation and Equity - The company reported a significant increase in stock-based compensation expenses, totaling $5,761 thousand for Q1 2023, compared to $937 thousand in Q1 2022[10] - The Company recognized stock-based compensation expense of $2.56 million for the quarter ended March 31, 2023, compared to $1.79 million for the same period in 2022[51] - The balance of Restricted Share Units (RSUs) increased to 19,636 units as of March 31, 2023, from 16,908 units at the end of 2022[50] - The Company has a maximum of 70 million RSUs authorized under the amended Omnibus Incentive Plan[41] - The Company established an Omnibus Incentive Plan allowing for up to 20% of issued Common Shares (35.6 million shares) to be issued as RSUs or Options[40] - The Company’s stock option plan allows key management personnel and employees to purchase shares at a predetermined exercise price[39] - As of March 31, 2023, the total number of Options outstanding was 23,037, with a weighted average exercise price of $0.89[44] Acquisitions - The acquisition of Expetitle was completed for a total consideration of $8.2 million, including $7.4 million in cash and $800 thousand in contingent consideration[21] - The Company acquired LemonBrew Lending for a total purchase price of $1.25 million, consisting of $800 thousand in cash and $450 thousand in equity-settled share-based payment[27] - The Company recognized $3.4 million as the fair value of developed technology and $8.4 million as goodwill from the Expetitle acquisition[23] - The Company has entered into performance-based milestone payments of $2.5 million related to the LemonBrew acquisition, contingent on achieving specific EBITDA targets[28] - The contingent consideration related to the Expetitle transaction was released on January 23, 2023, upon meeting specific conditions[72] Risk Management - The Company actively manages market risk exposures within acceptable parameters while optimizing returns[87] - The Company utilizes forward foreign exchange contracts to manage exchange rate fluctuations[90] - The Company aims to manage its capital structure to diversify funding sources while minimizing costs and risks[68] - The company has retained adequate liquidity to ensure cash flows meet operational, investing, and financing requirements[69] - The company has no changes to its capital management policies during the periods ended March 31, 2023, and December 31, 2022[69] Credit and Currency Exposure - The Company's exposure to credit risk for trade receivables in the US was $1,245,000 as of March 31, 2023, up from $1,105,000 at the end of 2022[85] - The Company does not require collateral for trade and other receivables, indicating a reliance on the creditworthiness of customers[83] - The total foreign currency liabilities as of March 31, 2023, amounted to $(13,908,000), compared to $(7,140,000) as of December 31, 2022[91] - The Company reported a total exposure of $16,930,000 in foreign currency denominated monetary assets as of March 31, 2023[91] - The average loss rates for trade receivables are calculated using a 'roll rate' method based on delinquency stages[84]