The Real Brokerage, Inc.

Greetings and welcome to the Real Brokerage First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during today's conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Mr. James Carbonara, Investor Relations. Thank you, sir. You may begin.

Thank you. And once again, welcome to REAL's first quarter 2021 earnings call. With me on the call are Tamir Poleg, Chief Executive Officer, and Michelle Ressler, Chief Financial Officer. This morning, REAL filed its unaudited interim financial statements and management discussion and analysis for its first quarter ended March 31, 2021 on CDAR. These documents, along with the accompanying news release, can be found on CDAR. The content of this conference should be considered in conjunction with and is qualified in its entirety by reference to such documents. I would like to begin the call by reading the Safe Harbor Statement. This statement is made pursuant to the Safe Harbor for forward-looking statements described in the Private Securities Litigation Reform Act of 1995. All statements made on this call, with exception of historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21A of the Securities Exchange Act of 1934. Although the company believes that expectations and assumptions reflected in these forward-looking statements are reasonable, it makes no assurances that such expectations will prove to have been correct. Actual results may differ materially from those expressed or implied in the forward-looking statements due to various risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those expressed or implied in the forward-looking statements, please see risk factors detailed in the company's annual report contained in subsequent filed quarterly reports, as well as in other reports that the company files from time to time with CDAR. Any forward-looking statements included in this earnings goal are made only as of the date of this goal. We do not undertake any obligation to update or supplement any forward-looking statements to reflect subsequent knowledge, events, or circumstances. unless otherwise mentioned, all references to currency in this call are in US dollars. Now, I would like to turn the call over to Tamir Pohle, Chief Executive Officer of Real. Tamir, please proceed.

Thanks, James, and thanks everyone for joining today. I would like to start by thanking the hundreds of agents who joined Real in the past few months and to our community of agents who have contributed massively to the accelerated growth we are experiencing. I will now continue by highlighting some top-level financial results. Then I'll provide some operational updates before turning it over to Michelle to dive deeper into our financials. After that, we will open up the call for Q&A. Okay, so let's start with the financial results. Q1 revenue was $9.3 million, an increase of 217% year-over-year. Driving that growth was an 82% increase in real estate agents joining Real, and we see no signs of slowing down. In fact, as we mentioned in today's press release, if we look at March alone, we added 255 agents with $20 million in training 12-month revenue recorded prior to joining Real. April performance was very similar to March. Notably, our core business does not include ancillary services, which we already have started exploring. With the addition of ancillary services, Real could expand into new areas of the market. This continued Continued growth serves a benefit to our agents who have equity incentives and to our shareholders, of course, and to consumers who enjoy the streamlined buying and selling process. Taken all together, we are well on track to achieving our ultimate vision of having a positive impact on as many human beings as possible within the real estate space. Now, turning to operating highlights. When we consider what is supporting our tremendous growth, it is a few operational factors and strategies And those are geographic extension, agent referrals, retention, product focus, and our team. Beginning with geographic extension, we entered 2021 operating in 22 states and the District of Columbia, and really rapidly adding new states based on demands from productive agents. To that end, during the first quarter, we announced real expansion into five additional states. We expanded into Utah, Oklahoma, Wisconsin, Kansas, and Hawaii. That brings our tally to 27 states plus DC. We look forward to the growth of each of those states can bring to Real. In terms of agent referrals, Real's agents earn revenue share through five tiers of referrals, creating a network growth effect. We recently announced that high producing real estate teams have joined Real in the fourth quarter of 2020, and first quarter of 2021 through February 9th. In the 12 months prior to joining Real, the new teams and agents have closed a volume of over $1 billion in home sales. You can attribute an approximately 2.5% commission on home sales to arrive at their trailing 12-month revenue figure, which is very attractive to Real on a go-forward basis and supportive of our growth ambitions. Moving to retention, At Real, we offer an equity incentive plan for agents vested over years. It was an important reason for us going public. Under the equity incentive plan, Real agents are eligible to receive stock options exercisable for common shares of Real under the stock option plan and restricted share units that vest as common shares of Real under the RSU plan. Agents can earn these stock-based incentives in recognition of their personal performance and ability to attract agents to real. The equity incentive plan builds on our listings on the TSX Venture Exchange June 12, 2020, and the OTCQX Best Market on August 11, 2020. And last month, we took another important step forward as it relates to our equity as an attraction and retention incentive with an application to list our common shares on the NASDAQ capital market. The equity incentives plan has allowed us to attract and retain not only more agents, but more high producing agents, which has had a big impact on our growth. Turning to our product focus, we are currently building a new agent app and we're building the infrastructure to accommodate scaling the company to 100,000 agents without needing any additional substantial investment in technology infrastructure. For that reason, in Q1, we also announced the acquisition of the business assets and intellectual property of RealtyCrunch. RealtyCrunch is a collaboration web and mobile app for home buyers and real estate agents. Launched in September 2020, it had already attracted over 2,000 real estate agents in the US who used it to streamline communication and document signing with their clients. Pritesh Damani, the founder and CEO of RealtyCrunch and additional RealtyCrunch employees joined real as part of the acquisition. Preetesh assumed the role of Chief Product Officer with Real's wholly owned subsidiary, Real Broker LLC, to continue his journey in real estate product innovation. Together, we will shape the future of the real estate brokerage industry with transformational software tools for real estate agents and their clients. As you can see, product has and will continue to be a big factor in our dramatic growth. Finally, moving on to our team. We were pleased to announce in Q1 that Vicky Bartolome had joined Real's advisory board to provide guidance and support to Real's board of directors and management with a focus on industry and real estate agent relations. Vicky is a recognized leader in the real estate industry who previously served as chief of agent success at Side and president of VXT Realty, where she helped the company grow from 500 agents to 15,000 agents in just three years. She also worked as team leader and agent throughout her career with Tarbell Realtors, Disney Vacation Development, and Keller Williams. She has extensive experience coaching real estate agents. In April, we were also excited to announce that Vicky had joined our board of directors. Her addition to Real has and will continue to support our growth ambitions. Additionally, we have had growth in the number of full-time employees, which has had a positive correlation to the volume of our real estate transactions. This has been done very efficiently. In fact, as of March 31st, 2021 real efficiency ratio, which means full-time employees to agents was one to 56 with a long-term target of one to 75. We view this as a competitive advantage in terms of how quickly and efficiently we can scale. and it provides benefits in future profit margins. For context, most companies in our field have a ratio closer to one to 25 or one to 30. And now to sum up, we had a fantastic first quarter, March and April were phenomenal with roughly 250 agents coming on each month with approximately $20 million in trailing 12 month revenue before joining real best of all, Our agents who are receiving equity incentives and shareholders are also rewarded. Later this year, we will be focusing substantial development resources on building an unparalleled consumer experience for home buyers and home sellers that are using real agents. We believe that there is a massive opportunity in improving many aspects of the real estate transaction for consumers while still heavily relying on the agent in the middle of the transaction. This will enable Real to accomplish its mission of having positive impact on as many human beings as possible within the real estate space. At this point, I will now turn it over to Michelle for a more in-depth view of our financials. Michelle.