The Real Brokerage, Inc.

Good day, everyone, and welcome to the Real Brokerage fourth quarter and full year 2024 earnings call. At this time, all participants have been placed on a listen-only mode. If you have any questions or comments during the presentation, you may press star 1 on your phone to enter the question queue at any time, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Ravi Jani. 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 fourth quarter and full year ended December 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 results for the fourth quarter ended December 31st, 2024. The press release, along with the audited consolidated financial statements and related management discussion and analysis for the year, have been filed with the U.S. Securities and Exchange Commission 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 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, Robby. 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 a compelling combination of financial incentives, a proprietary software-based technology platform, which eliminates the need for an agent's 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, 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 clients in the short term this vision includes the rollout of a consumer facing product 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 and investment planning tools, providing agents with an avenue to build long-term 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 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. That is why we remain relentless in our focus on delivering long-term value for our agents, for their clients, and for shareholders. Turning to the numbers, this morning, we reported record fourth quarter and full year 2024 results. For the year, we closed over 120,000 transactions, an increase of 81% versus 2023. Total transaction value reached $49 billion, up 90% year-over-year, while revenue grew to $1.3 billion, marking our first ever billion-dollar revenue year and marking an increase of 84% from $689 million in 2023. Gross profit in 2024 grew 82% year-over-year, to $115 million, while adjusted EBITDA reached a record $40 million, up 188% from the prior year. We ended the year with 24,140 agents, up 77% from the prior year, and as of this morning, our agent count is approximately 26,200 agents, meaning we've added another 2,000 net agents since the start of 2025. We believe these results are proof that our vision is resonating in the industry. When we take a step back and look at the broader real estate sector, it's clear that many are waiting on a market recovery to regain momentum. However, with existing home sales remaining near historic lows and mortgage rates remaining higher for longer, waiting is not a strategy. At Real, we are focused instead on building for the future. This focus has led to incredible momentum across several key initiatives. First, Leo Copilot. Our AI-powered agent assistant is now integrated across our brokerage platform, regularly handling over 2,000 daily agent interactions and helping to automate workflows that previously required human support or intervention. Leo Copilot is a tool that enhances brokerage and agent productivity and efficiency at scale. Meanwhile, We expect to launch our Leo for Clients product later this year, giving our agents another tool to delight their clients with. Second, Real Wallet. Our fintech platform that was purpose-built for real agents is rapidly expanding. Today, through our Reason software, real agents in the U.S. can apply for Real Wallet business checking accounts offered through our bank partner, ThreadBank, and receive a real branded debit card. Meanwhile, Agents in Canada can apply for a line of credit based on their earnings and production history with Real. Today, approximately 2,500 agents have opened Real Wallet business checking accounts with an aggregate deposit balance of approximately $7 million. In Canada, over 150 agents have accessed the credit lines, drawing over $1 million. We're very excited that this is just the first inning of the Real Wallet ecosystem. Today, we do not yet have lines of credits available in the U.S., nor checking accounts or debit cards available in Canada, but planning for both is underway. As we continue rolling out new products and features, we expect our adoption numbers to continue to grow in the future. Just four months post-launch, we estimate the annualized run rate revenue from reWallet at over $500,000, a number that we will continue to disclose going forward. Third, regarding one real mortgage and one real title, we continue to make progress scaling this high margin ancillary business lines. For the full year 2024, mortgage and title grew by a combined 105% with over 200% growth at one real mortgage and 60% growth at one real title. For the year, mortgage and title contributed less than 1% of total revenue, but given gross margins for these businesses are typically five to eight times higher than our average brokerage gross margins, they contributed over 5% of our gross profit. In 2025, we remain focused on expanding both business lines to further enhance our gross profit mix and margin profile and reinforce our vision of providing a seamless end-to-end home buying experience for consumers. To that end, in January, we were pleased to welcome Nancy Marsden as the new CEO of One Real Title. Nancy is a seasoned industry veteran who joins us from Redfin's Title Forward, where she was a member of the team credited with driving some of the highest attach rates in the industry. Meanwhile, at One Real Mortgage, our loan officer count has grown to 90 today, up from 18 at the start of 2024. Notably, nearly half of our LOs are real agents who have become licensed loan officers as part of the Real Originate program, one of the many initiatives we've developed to give agents and their clients greater visibility and control over the transaction process. We have high expectations for continued growth and improved profitability for both mortgage and title in 2025, and look forward to updating you on our progress as the year continues. Before turning to Sharan, I'll close out my comments with a brief word on some of the changes to our business model that we recently announced in February. First, in the U.S., we increased the $30 transaction fee for broker review, insurance, and transaction processing to $40. In Canada, we announced a $40 Canadian dollar per transaction fee and increased the maximum commission cap to $15,000 Canadian dollars from $12,000 previously. Additionally, in both the U.S. and Canada, we announced a decrease in the post-cap RSU bonus for agents who participate in our stock purchase plan which will decline from 20% to 15%. These changes will begin to take effect on April 1st for new agents and the later of May 1st or an agent's anniversary date for existing agents, other than the change in the stock purchase plan bonus, which will go into effect for all agents beginning April 1st. It's important to note that, until now, we have made no changes to our business model in Canada since launching nearly four years ago. Given our experience in the country, we felt these adjustments were necessary to better reflect the exchange rate difference between the two countries, as well as the higher cost of operations in Canada. Importantly, with these changes in place, we can continue investing in enhancing the Asian experience while also effectively managing inflation, increased operating costs, and evolving regulatory requirements. The bottom line, is that we are entering 2025 with significant momentum and we are committed to making real a powerhouse for growth, opportunity, and profitability. We believe we are well positioned to continue redefining what a brokerage can and should be. With that, I'll turn it over to Sharan for an update on our growth and agent initiatives.