The Real Brokerage, Inc.

Good morning, ladies and gentlemen, and welcome to the Real Brokerage third quarter earnings call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. I will now turn the call over to Jason Lee, Vice President of Capital Markets and Investor Relations at Real Brokerage. Sir, the floor is yours.

Good morning, everyone, and thank you for joining us today for Real's third quarter 2022 earnings call. With me on the call today are Tamir Kolig, our Chairman and Chief Executive Officer, and Michelle Ressler, our Chief Financial Officer. This morning, REAL filed its interim financial statements, as well as its management discussion and analysis for the third quarter at its September 30, 2022, on Cedar and Edgar. These documents, along with the accompanying earnings press release, can be found on both Cedar and Edgar. Before I turn the call over to Tamir, I'd like to remind everyone that the company will be making statements about its future results and other forward-looking statements during this call. Our actual results may differ materially from these forward-looking statements, and the risk factors that could cause these differences are detailed in our Canadian Continuous Disclosure Documents and SEC reports. We will disclaim any intent or obligation to update these forward-looking statements except as expressly required by law. Now, with that, I'd like to turn the call over to Chairman and Chief Executive Officer, Tamir Folek. Tamir, please proceed.

Good morning, and thank you, Jason. Q3 was a challenging period for the housing market broadly. During the quarter, the number of residential transactions in the U.S. fell by 11%, and the median home sales price moderated by approximately 5% compared to Q2-22. In Canada, a market in which we continue to see significant growth, volumes and price fell by 14% and 10% respectively compared to the prior quarter. Meanwhile, mortgage rates climbed throughout the quarter, exceeding 7% in October for the first time since 2001, which is weighing on current affordability and new transaction volumes. Against this backdrop, in which many of our peers have reported year-over-year declines in revenue, we posted growth of 188% year-over-year which we believe demonstrates the resiliency of our model and competitive offering in a tough market. During the quarter, we continue to gain market share, growing both our agent base and total number of transactions processed. As of September 30, 2022, we had over 6,700 agents on our platform, a 20% increase quarter-over-quarter, and a 126 year-over-year surge. Subsequent to the end of the quarter, we announced we reached the 7,000 agent milestone, which represents an 82% increase from where we were at the beginning of the year. We experienced growth in both our US and Canadian agent bases. Currently, Canada represents 7.8% of our agents, up marginally from 7.6 in Q2. However, our Canadian agents made up to 20% of commission revenue over the quarter, and Ontario represents the fastest growing region across our footprint with transaction growth of 91% since Q2. Our other highest revenue growth states and provinces include Florida, Minnesota, Washington, and Arizona. Subsequent to the end of the quarter, we announced we are leveraging our existing relationships with Redline Real Estate Group, one of Canada's top brokerage teams that joined Real in October 2021 to serve as the foundation for our expansion into British Columbia and further cementing our presence in the country. While acquiring brokerage firms as a method to grow agent count is not part of our strategy, this nominal acquisition was conducted to acquire Redline's real estate license to operate in BC and gives us a strong foothold in the province. We look to continue to expand across BC and our next Canadian territory target consists of the Manitoba and Saskatchewan provinces which we are targeting to open in the first half of 2023. Over the quarter and at our one real conference in October, we made several exciting announcements about the development of our business. First and foremost, we announced we will be launching an early version of our consumer-facing app in the first half of 2023, which will mark the first concrete step in bringing our one-stop shop home buying experience to fruition. The initial version of the app will include a conversational UX design to guide the buyer through the traditional complex mortgage and title processes and will feature instant pre-approval and seamlessly title selection. This will be our first major step in crystallizing our consumer vision and we are excited to continue to iterate and expand the consumer portal over time. In September, We have signed an agreement to acquire Lemon Brew Lending, a tech-enabled home loan platform, delivering on our plan to make an acquisition to get a foothold in the mortgage services space. The acquisition represents an important building block to our consumer-facing strategy of providing a frictionless home buying experience for consumers. Lemon Brew is licensed to provide a full suite of mortgage services across 20 states in the U.S., including Texas, California, and Florida. The transaction is expected to close in Q4. after which we expect to have more details to provide on the integration of this business. Regarding our previous title acquisition, which we completed in January of this year, we continue to see progress with the launch of JVs into Florida and Georgia and Q3. While the revenue contribution from this business is still small, it remains a significant growth engine for us going forward as we integrate these ancillary businesses within our consumer app. Title is now licensed in 19 states with plans to expand operations to several key states, including California, Utah, Minnesota, and Tennessee in Q4 and the first half of 2023. Subsequent to the end of the quarter, we began exploring opportunities to provide our title services to non-REO brokerages and already have one signed deal while pursuing others. We look for continued progress on the title front, and we are excited to continue laying the groundwork for this key building block to gain momentum within our consumer app strategy. Overall, with respect to our corporate development strategy more broadly, our current approach as we build out our one-stop shop consumer app experience is to focus on partnership or joint ventures on the home insurance side, as well as M&A in the agent tool and mortgage services space. However, I want to stress that we are strategic and adaptive, so we are always looking to make opportunistic acquisitions and remain in favorable position to do so if we see attractive targets. Elsewhere on the technology front, we announced at the OneReal conference that Reason, Real's proprietary technology platform, has now been launched to all U.S. and Canada-based agents. This is the real 2.0 moment we touched on briefly last quarter. This software is the backbone of our transaction processing efficiency and is a key to unlocking operating leverage as we continue to scale. What this means is that our agents will no longer need a third party system for including new transactions, which gives us greater control with the transaction experience, allows us to better integrate our own technology as we develop our full consumer app and drives productivity and efficiency for agents. Importantly, We have built an open platform which provides more control and flexibility of integration. And for real, it provides heavy automation of processes to lower costs and support strong operational scaling. We also announced that we have expanded our new agent coaching program to include coaching specifically targeted at helping increase the productivity of our more experienced agents. This supplements the mentorship program announced last quarter that focuses on agents new to the industry. Our new suite of coaching programs empower our agents to start closing transactions more quickly and can improve agent productivity while allowing for increased profitability as we enter the large and growing coaching market. As part of our focus on growing our presence across the marketplace, we announced the addition of our new Chief Marketing Officer, Dre Madden. Dre brings over 20 years of digital and brand experience and will be responsible for driving brand awareness, increasing corporate visibility, and implementing a strategic roadmap to scale the company's agent base, which will include, amongst other initiatives, hosting in-person events and the development of resources to help our existing agents with attraction. As we look to close out the year and plan for 2023 and beyond, our top priorities remain building an industry-changing consumer experience, executing on further monetization opportunities on our growing platform, and maintaining a cost-effective structure with strong cash management. And with that, I will turn it over to Michelle for the financial update.