The Real Brokerage, Inc.

Good morning, ladies and gentlemen, and welcome to the Real Brokerage fourth 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 Ravi Jani, Vice President of Investor Relations and Financial Planning and Analysis at the Real Brokerage. Sir, the floor is yours.

Thanks, and good morning. Good morning. Thank you for standing by and welcome to the Real Brokerage conference call and webcast for the fourth quarter and full year ended December 31st, 2023. We appreciate everyone for joining us today. With me on the call are Tamir Poleg, our Chairman and Chief Executive Officer, Sharan Srivatsa, President, and Michelle Ressler, our Chief Financial Officer. This morning, Real published an earnings release including results for the fourth quarter and full year ended December 31st, 2023. REAL expects to file in March 2024 audited consolidated financial statements and related notes for the period ended December 31st, 2023 and 2022, the related MD&A for the year ended December 31st, 2023, and its annual information form for the year ended December 31st, 2023, with the US SEC and its annual report on Form 40F on EDGAR and with the Canadian securities regulators on CEDAR. Before we get started, I'd like to remind everyone that statements made in this conference call that are not historical facts, including statements about future time periods, may be deemed to constitute forward-looking statements. Our actual results may differ materially from those forward-looking statements. And the risk factors that could cause these differences are detailed in our Canadian continuous disclosure documents and SEC reports. REAL disclaims any intent or obligation to update these forward-looking statements, except as expressly required by law. With that, I'd like to turn the call over to Chairman and Chief Executive Officer, Tamir Polay. Tamir, please proceed.

Good morning, and thank you, Ravi. I will start with an overview of our strategy and some recent business highlights. Sharon will provide an update on actions we are taking to drive agent growth and improve agent experience, and Michel will provide a more in-depth discussion of our financial results in the quarter. I'll then provide a few closing remarks before opening up the call for Q&A. To begin, Real is a real estate technology company that is differentiated in our industry. Unlike traditional real estate brokerage firms, we provide real estate agents with an unmatched combination of financial incentives a proprietary software-based technology platform which eliminates the need for physical office space, and a collaborative culture we believe is unique in our industry. Our vision is to simplify life's most complex transaction, that is, a purchase or sale of a home, by providing agents with the tools, technology, and resources they need to grow both their businesses and as individuals, all while delivering a seamless experience for home buyers and sellers. In the short term, This vision includes the rollout of our one real consumer-facing mobile app, which streamlines the client experience and enhances attachment of our higher margin ancillary services. In the long term, we expect our platform to encompass a holistic ecosystem of financial technology products, payments, and investment planning tools, providing agents with an avenue to build generational wealth. Ultimately, as the platform matures, we believe home buyers and sellers could also benefit from the breadth of our service offering. Our goal is to redefine the role of real estate brokerage in the lives of our agents and in the broader housing industry. Importantly, just like our institutional investors, agents are owners of our business, and that is why everything we do is with the intent to grow long-term shareholder value. Turning to the quarter, This morning, we reported record fourth quarter results with revenue in the fourth quarter of 2023 increasing by 89% versus the prior year to 181 million, driven by an 82% increase in the number of transactions closed, combined with a 4% increase in average revenue per transaction. For the full year, Revenue grew to a record $689 million, an increase of 81% versus $382 million in 2022, which compares favorably to the nearly 20% decline in existing home sales. We ended December with 13,650 agents, up 66% versus the prior year, and up 12% sequentially from the end of the third quarter of 2023. As Sharon will discuss, We're pleased that this momentum has continued and even accelerated so far in 2024. Adjusted EBITDA in the fourth quarter of 2023 was $8.5 million or $2.3 million, excluding the impact of non-recurring balance sheet adjustments that was recorded in the quarter. This was a significant improvement from a negative $0.1 million of adjusted EBITDA in the fourth quarter of 2022 and marked our third straight quarter of positive adjusted EBITDA. The improvement versus the prior year reflects robust revenue and gross profit growth, which outpaced growth in our operating expenses and demonstrates the scalability of our platform, combined with the benefits of actions taken earlier in the year to improve margins and optimize discretionary spend. Full year 2023 adjusted EBITDA was $13.9 million or $7.6 million excluding the balance sheet adjustment, a significant improvement from the negative $700,000 in the full year 2022. As we look ahead to 2024, there is a clear sense of excitement within REAL about the housing market nascent recovery. This optimism is bolstered by the momentum we're seeing in our pipeline, highlighted by both the surge in new agents joining our platform and the significant uptick in open transaction volume. That said, the rate environment remains volatile and warrants close monitoring. Nevertheless, Although we are not providing explicit financial guidance for 2024 at this time, I am confident in our ability to deliver another year of significant revenue and adjusted EBITDA growth, regardless of how the end market recovers. Moreover, we remain enthusiastic about the outlook for our mortgage brokerage and title business lines. We expect both businesses to grow at a pace faster than our core brokerage business in 2024, aided by the rollout of the one real consumer-facing app. combined with growth initiatives we have undertaken to drive increased attachment of these high margin ancillary services. We also remain on track for the Q2 2024 launch of our first FinTech product known as the Real Wallet, a digital debit and credit card platform specifically designed for real agents. As a reminder, The Real Wallet will enable agents to consolidate all commission income, revenue share payments, and equity earned through Real into one digital platform with the ability to access these funds through a Real branded debit or credit card. Utilizing the Real card will allow agents to accumulate points that can then be applied towards reducing their brokerage and transaction fees, further enhancing the value proposition for agents who join our platform. This innovation highlights our dedication to improving the Asian experience by providing unique tools and services that bolster their business operations and financial flexibility while positioning real squarely at the forefront of merging FinTech with real estate. With that, I'll turn it over to Sharon for an update on our growth initiative. Thank you, Tamir.