The Real Brokerage(REAX) - 2024 Q1 - Quarterly Report

Financial Performance - Revenues for the year ended December 31, 2023, were $689.2 million, compared to $381.8 million in 2022, representing an increase of 80.5%[20] - Gross profit for the year ended December 31, 2023, was $62.9 million, up from $31.9 million in 2022, reflecting a 97% increase[20] - The net loss for the year ended December 31, 2023, was $27.2 million, compared to a net loss of $20.3 million in 2022[20] - Loss per share was $0.15 for the full year 2023, compared to a loss of $0.12 per share in 2022[11] - Net loss for Q4 2023 was $11.99 million, compared to a loss of $6.76 million in Q4 2022, representing a 77% increase in losses year-over-year[22] - Total revenue for Q4 2023 reached $181.34 million, a 85% increase from $97.82 million in Q4 2022[27] - Commissions accounted for $180.42 million in Q4 2023, up from $97.33 million in Q4 2022, indicating a 85% growth[27] - Adjusted EBITDA for Q4 2023 was $8.51 million, compared to a loss of $0.12 million in Q4 2022, marking a significant turnaround[25] Operating Expenses - Operating expenses increased by 72% to $88.9 million for the full year 2023, up from $51.7 million in 2022[11] - Adjusted operating expenses were $42.8 million for the full year 2023, a 55% increase from $27.7 million in 2022[11] - Adjusted operating expenses for Q4 2023 were $26.80 million, compared to $15.18 million in Q4 2022, representing a 77% increase[30] - Operating expenses excluding revenue share increased from $11,164,000 in Q4 2022 to $19,956,000 in Q4 2023, an increase of 78.5%[32] - Adjusted operating expense per transaction decreased from $870 in Q4 2022 to $632 in Q4 2023, a reduction of 27.4%[32] Cash and Investments - As of December 31, 2023, the company held unrestricted cash and investments of $28.9 million, a $10.2 million increase from the prior year[11] - Total cash balance at the end of Q4 2023 was $27.66 million, up from $18.33 million at the end of Q4 2022, showing a 51% increase[22] - Cash provided by operating activities for the year was $19.87 million, compared to $5.99 million in the previous year, reflecting a 232% increase[22] Assets and Liabilities - The total assets as of December 31, 2023, were $64.5 million, an increase from $43.8 million in 2022[18] - The total liabilities as of December 31, 2023, were $27.5 million, compared to $21.3 million in 2022[18] - The company reported a goodwill impairment of $723,000 for the year 2023, which was not present in 2022[22] Agent Metrics - Closed transaction sides increased from 9,745 in Q4 2022 to 17,749 in Q4 2023, representing an increase of 82.5% year-over-year[32] - Total value of home side transactions rose from $3.5 billion in Q4 2022 to $6.8 billion in Q4 2023, a growth of 94.3%[32] - Total agents increased from 8,200 in Q4 2022 to 13,650 in Q4 2023, marking a growth of 66.5%[32] - Agent churn rate improved from 10.8% in Q3 2023 to 6.2% in Q4 2023, indicating better retention[32] - Revenue per full-time employee increased from $1,144,000 in Q4 2022 to $1,537,000 in Q4 2023, a rise of 34.4%[32] Company Strategy - The company anticipates continued growth in agent recruitment and retention, with a focus on expanding its digital brokerage platform[34] - Real operates in all 50 states in the U.S. and Canada, supporting 16,000 agents through its technology-driven services[36]