The Real Brokerage, Inc.

Good morning, ladies and gentlemen, and welcome to the Real Brokerage first quarter 2024 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. Thank you for standing by and welcome to the Real Brokerage conference call and webcast for the first quarter ended March 31st, 2024. We appreciate everyone for joining us today. With me on the call today 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 press release including our results for the first quarter ended March 31st, 2024. The press release, along with the unaudited consolidated financial statements and related management discussion and analysis for the quarter have been filed with the US Securities and Exchange Commission on EDGAR with the Canadian securities regulators on CEEDAR. 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 these 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 our Chairman and Chief Executive Officer, Tamir Pollack.

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 Michelle will provide a more in-depth discussion of our financial results this 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 that 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 services offering. Our goal is to redefine the role of a real estate brokerage in the lives of our agents and in the broader housing industry. Importantly, Just like our institutional investors, many of our agents are also shareholders in our company, 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 first quarter results with revenue in the first quarter of 2024 increasing by 86% versus the prior year to 201 million, driven by a 74% increase in the number of transactions closed, combined with a 7% increase in average revenue per transaction. This compares favorably to the 3% decline in overall industry transactions during the quarter. Gross profit in the first quarter of 2024 was a record $20.8 million and contributed to adjusted EBITDA of $3.6 million, also a quarterly record, and a significant improvement from negative $0.8 million of adjusted EBITDA in the first quarter of 2023. This marks our fourth straight quarter of positive adjusted EBITDA and is particularly encouraging given the first quarter is traditionally the lowest of the year for the industry. We ended the first quarter with 16,680 agents, up 67% versus the prior year, and an increase of over 3,000 agents from the end of 2023. As Sharon will discuss, the acceleration in growth this year has been driven in part by our recently launched private label and pro-teams initiative, which makes it easier than ever for high-performing teams and independent brokerages to align with Real. In addition to our impressive brokerage results, our ancillary mortgage and title business lines grew by a combined 104% versus the prior year. Notably, our mortgage business alone expanded by over 400% year over year, all organic. These ancillary businesses typically command gross margins that are six to eight times higher than our average brokerage gross margin, and we are pleased that the growth initiatives we have implemented are becoming more apparent in our results. Importantly, based on the strength we are seeing in both business lines, we continue to expect overall ancillary revenue growth to significantly outpace growth in our core brokerage business in 2024. With respect to broader industry backdrop, obviously the interest rate environment remains volatile and the timing of potential Fed rate cuts continues to be delayed. However, at Real, we are charging full steam ahead. Our results this quarter, and indeed over the past three years, demonstrate our ability to grow rapidly, irrespective of the broader macro environment, thanks to our differentiated business model and unique agent value proposition. As we enter the peak selling season, we remain enthusiastic about the outlook for the balance of the year based on the strong momentum we are seeing in our open transaction pipeline, which is currently at an all-time high and up over 75% versus the prior year. On the product front, we continue to make upgrades to our one real consumer-facing app, including a completely redesigned client interface, and we expect further enhancement to be rolled out in the coming quarters. Regarding the real wallet, although we remain on track for our initial product launch in 2024, we expect a delay in our launch as we establish the necessary regulatory and compliance protocols required for such a novel product with our primary banking partner. We still look forward to rolling out the wallet to our agent's base this year as soon as we and our partner finalize the crucial work. With that, I'll turn it over to Sharon for an update on our growth initiatives.