The Real Brokerage (NasdaqCM:REAX) FY Conference Transcript

Summary of The Real Brokerage FY Conference Call Company Overview - Company Name: The Real Brokerage (NasdaqCM:REAX) - Industry: Real Estate Technology - Founded: 2014 - Current Revenue: Expected to exceed $2 billion in 2023, up from approximately $300 million in 2022, representing a growth of about 7x in two to three years [4][5] Core Business Model - Agent Monetization: Revenue is generated through commission splits with agents and additional fees. The company has diversified its revenue streams by entering mortgage, title, and fintech products [4][5]. - Agent Acquisition: 100% organic growth, with 85% of new agents coming from referrals and 15% from inbound inquiries. The company does not spend on upfront marketing costs [10][11]. - Agent Churn: The company experiences a 7% quarterly churn rate among agents, but revenue churn from productive agents is significantly lower at 1.4% [16][17]. Competitive Advantages - Value Proposition: Offers agents more freedom, flexibility, and lower costs compared to traditional brokerages. Agents pay about half of what they would at traditional firms [6][7]. - Technology Suite: Provides a comprehensive operating system for agents, including marketing and productivity tools [7][8]. - Collaborative Culture: Focuses on collaboration rather than competition among agents, fostering a unique company culture [8]. Recent Developments - AI Integration: Launched "Leo," an AI assistant that handles support tickets and will soon engage with clients directly, enhancing agent productivity and client interaction [20][25]. - New Features: Leo will assist agents in nurturing leads and pre-qualifying clients for mortgages, potentially increasing transaction volumes [25][26]. - Attach Rates: The company is working on increasing attach rates for its mortgage and title services, currently at 1% and 4% respectively, with joint ventures showing over 30% attach rates [82][88]. Market Outlook - Housing Market Predictions: Anticipates around 4.3 million homes sold in 2026, with a gradual recovery expected as affordability improves and demand is unlocked [54][61]. - Interest Rates: Low mortgage rates in the low fives are seen as a potential catalyst for market recovery [62][64]. Strategic Focus for 2026 - Growth Goals: Aims to continue adding agents and increasing transaction counts while focusing on high-margin services such as title and mortgage [119]. - Operational Efficiency: Plans to reduce operating expenses per transaction through technology and scale, which will enhance profitability [115][116]. Additional Insights - Private Label Program: Allows small independent brokerages to operate under Real's umbrella while maintaining their branding, contributing to 15% of growth [12][13]. - Agent Engagement: The company is focused on keeping agents engaged through various monetization opportunities, including a share purchase program and referral incentives [17][96]. This summary encapsulates the key points discussed during the conference call, highlighting the company's growth trajectory, competitive advantages, and strategic initiatives moving forward.