The Real Brokerage, Inc.

Good morning, ladies and gentlemen, and welcome to the Real Brokerage first 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 the Real Brokerage. Sir, the floor is yours.

Good morning, everyone, and thank you for joining us today for Real's first quarter 2023 earnings call. With me on the call today are Tamir Poleg, our Chairman and Chief Executive Officer, and Michelle Ressler, our Chief Financial Officer. This morning, REAL filed its financial statements and management discussion and analysis for the first quarter ended March 31, 2023, 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 all 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 Polek. Tamir, please proceed.

Good morning, and thank you, Jason. Q1 of 2023 was a tough quarter for our industry once again, with elevated mortgage rates continuing to weigh on affordability for buyers and U.S. existing home sales down 26% year over year and 16% quarter over quarter. Against this difficult backdrop, we're pleased to announce that we will continue to see exceptionally strong growth. Our revenue for the quarter was $108 million, a 75% year-over-year increase and a 12% sequential growth from the prior quarter. January tends to be the slowest month in real estate, and we are pleased to report a strong consecutive revenue increase in both February and March. Driving this revenue was our accelerating agent attraction. During the quarter, our agent base grew to just over 10,000 agents, a 120% year-over-year increase. This represents a nearly 1,800 net addition, the largest increase in our company in history. In fact, we've seen an impressive acceleration in agents choosing to join our platform with nearly 1,500 agents added in Q4 and 1,100 in Q3. This growth drove an improvement in transaction volume despite productivity levels that are affected by challenging housing market. Total transaction size improved 75% year over year to 10,960 63. These results come during a difficult period for agents across the country, as evidenced by shrinking agent bases at many other brokerages. What's clear to us is that our agent attraction model is working and our technology and value proposition is resonating with agents that want to be successful. We're seeing this anecdotally in the conversation we have with our agents and prospects, and ultimately we're seeing it in a number of agents that are making the choice to join our platform. Our gain in market share has not gone unnoticed. I'm proud to report that we were recently recognized as a top brokerage by Realtrend, T360, RIS Media, and Housing Wire. We have been working hard to build a tech-powered brokerage where agents are excited to join and thrive. Our inclusion in this ranking highlights the pace of growth we have experienced in just a few short years, and we are pleased to have been recognized for our achievements. On the geographic expansion front, we launched operations in Delaware in May, which strengthen our presence in the Middle Atlantic region and brings our total state count to 46. Also in May, we expanded into Manitoba in Canada, growing our total presence in the country to four provinces, including Alberta, Ontario, and British Columbia. Back in December, we announced the addition of Sharan Srivatsa as president of the company. He's focused on all aspects of growth, including agent attraction and education. In April, we hosted our first RealX annual virtual summit a two-day agent event led by Charan that assembled our industry's best thought leaders and inspired thousands of attendees. We also announced our second annual agent conference called Rise, which is scheduled for October 22 to 24 in San Diego, California. Now, to touch on some new products and initiatives we're excited about. The home buying experience has been a focus for us in recent quarters. We understand that the future of real estate lies in taking this very complex process of buying a home and wrapping it into a single well-crafted, easy to understand product. As part of bringing this vision to life, we will be launching an initial limited beta version of our consumer facing app in a few weeks, focusing on streamlining the mortgage application process. In a few days, We will also be launching fast 14 a program that provides homebuyers with guarantee that they will be clear to close on their mortgage within 14 days of submitting their mortgage application. We believe that the certainty provided by this program, as well as the speed to close will be attractive to many buyers we expect fast 14 to be embedded into our consumer facing APP later this year. We pride ourselves on our nimble development culture, which is why we immediately recognize the revolutionary potential that recent advances in AI and machine learning models offer. This led us to announce the development of Leo earlier this month, a new AI virtual assistant that will be fully integrated into our recent transaction management platform that will answer agent questions in real time, 24-7, leveraging real extensive proprietary knowledge base to create a completely customized experience. for our agents and make our already lean support team even more efficient, which fundamentally aligns with our core philosophy of becoming the premier brokerage by providing scalable solutions for our agents. We expect to roll out an initial version for testing by the end of Q2. We are also happy to announce on this call that today we have launched RealSignature to all of our agents, a proprietary electronic signature tool built fully inside of Reason. This feature will benefit agents by allowing them to save time by creating document templates for future transactions and to save money by avoiding third-party subscription fees. Further, by developing this tool in-house, we will also own all of the data associated with the transaction experience, which we can leverage to better automate the transaction process and create better user experiences over the long term. It is an important building block of the one-stop shop consumer product we are developing. Subsequent to the end of the quarter, on April 4th, we announced Century Residential merged its military-focused national brokerage into REAL, adding to REAL's existing 500-plus military-focused agents. REAL plans to leverage our growing presence to launch a REAL military division, the first of several planned divisions of practice. This is a great milestone for the company as we create a specialized pillar of our community to focus on military veterans and their clients. On our prior earnings call, we were optimistic that Q4 was the bottom for us given record open transaction volume on our platform in early 2023. As of today, our open transaction volume has reached new records once again as we enter the seasonally busiest time of the year in our industry. As a result, we are confident that tremendous market share growth and the recently announced changes to our model will have a growing impact on our financials. We believe this will have an even more significant effect as per agent productivity accelerates with increased macro environment stabilization as our platform now boasts considerably more agents. We remain focused on aggressively gaining strong market share by providing the best ecosystem for agents. Given our accelerating performance and the progress witnessed thus far this quarter, we now expect to reach our goal of becoming adjusted EBITDA profitable in Q2, earlier than our prior target of reaching adjusted EBITDA profitability in the second half of 2023. As we scale our title in mortgage businesses, we continue to lay the foundations for an industry-changing consumer experience, and we'll begin testing initial versions of a consumer-focused application with a select group of agents and clients early in the second half of 2023 that will feature mortgage pre-approval. While we anticipate that it will take another year to iterate to a full consumer-facing product, we want to prioritize growing sustainably while executing our long-term vision. And with that, I'll turn it over to Michelle for the financial update.