Real Brokerage (REAX) Q4 2025 Earnings Transcript

Core Insights - The Real Brokerage Inc. experienced significant growth in 2025, with revenue increasing by 56% to nearly $2 billion and gross profit rising by 44% to $166 million, despite a challenging housing market [2][15][22] - The company achieved a GAAP net loss of $8.1 million for the year, a substantial improvement from a loss of $26.5 million in the previous year, while adjusted EBITDA reached $62.9 million, up 57% year-over-year [22][24] - The brokerage's agent count grew by 31% year-over-year, reaching over 33,000 agents, contributing to a 38% increase in closed transactions in the fourth quarter [2][22] Financial Performance - Fourth quarter revenue rose 44% to $505 million, with gross profit increasing by 30% to $39 million [2][15] - Operating expenses grew by 22% to $44 million in the fourth quarter, while the full-year operating expenses were limited to a 25% increase [20][22] - The company generated approximately $66 million in cash flow from operations and returned $39 million to shareholders through buybacks [22] Operational Highlights - The Real Brokerage Inc. is expanding its ancillary services, with OneReal Mortgage generating $6 million in revenue, up 50% year-over-year, and OneReal Title generating $5 million, a 5% increase [5][6] - RealWallet, which completed its first full year, generated nearly $900,000 in revenue with a current run rate of approximately $1.5 million, and over 7,000 agents are actively using the service [6][55] - The company is focused on integrating AI into its operations, enhancing agent productivity and compliance through tools like LEO Copilot and LEO Voice Broker [10][11] Market Position and Strategy - The Real Brokerage Inc. is positioned to capitalize on structural factors driving its growth, including agent attraction and productivity, despite broader market constraints [5][15] - The company aims to maintain a best-in-class retention profile, with revenue churn improving to 1.6% in the fourth quarter [18][19] - The strategic focus is on building a unified platform that enhances agent engagement and expands revenue opportunities through integrated services [7][28]