The Real Brokerage(US:REAX)2025-03-07 18:34Financial 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]