The Real Brokerage Inc. Announces First Quarter 2025 Financial Results
TORONTO & NEW YORK--(BUSINESS WIRE)--May 08, 2025--
The Real Brokerage Inc. (NASDAQ: REAX) ("Real" or the "Company"), a technology platform reshaping real estate for agents, home buyers, and sellers, announced today financial results for the first quarter ended March 31, 2025.
"Real delivered outstanding results to start 2025, continuing our track record of differentiated growth," said Tamir Poleg, Real's Chairman and Chief Executive Officer. "Our focus on innovation remains central to our success. With Leo CoPilot, our AI-powered agent assistant, and continued momentum in Real Wallet, we believe we are building moats that increase the value of our platform to agents -- helping them grow their businesses and attracting top talent to Real. We are committed to building a platform that generates sustainable, long-term growth and returns."
"At Real, our focus is simple - we want what's best for agents and their clients," said Sharran Srivatsaa, President of Real. "Markets shift and rules change, but our model was built to win in any environment -- by helping our agents stay ahead, grow their businesses, and deliver for home buyers and sellers. As the market continues to recover, we will lead the industry with grace, transparency, and a spirit of collaboration over competition."
"Our first quarter results demonstrate the strength, scalability, and resilience of our platform," said Ravi Jani, Real's Chief Financial Officer. "Looking ahead, we remain focused on driving above-market growth and improving margins, with a disciplined approach to capital allocation. Our strategy is grounded in creating long-term value for our agents, partners, and shareholders."
Q1 2025 Operational Highlights(1)
-- The total value of completed real estate transactions reached $13.5
billion in the first quarter of 2025, an increase of 80% from $7.5
billion in the first quarter of 2024.
-- The total number of transactions closed was 33,617 in the first quarter
of 2025, an increase of 77% from 19,032 in the first quarter of 2024.
-- The total number of agents on the platform increased to 26,870 at the end
of the first quarter of 2025, an increase of 61% from the first quarter
of 2024. As of May 8, 2025, approximately 27,700 agents are now on the
Real platform.
Q1 2025 Financial Highlights
-- Revenue rose to $354.0 million in the first quarter of 2025, an increase
of 76% from $200.7 million in the first quarter of 2024.
-- Gross profit reached $33.9 million in the first quarter of 2025, an
increase of 63% from $20.8 million in the first quarter of 2024.
-- Net loss attributable to owners of the Company was $(5.0) million in the
first quarter of 2025, compared to $(16.1) million in the first quarter
of 2024.
-- Adjusted EBITDA2 was $8.3 million in the first quarter of 2025. This
compares to $3.6 million in the first quarter of 2024.
-- Operating expenses, which include General & Administrative, Marketing,
and Research and Development expenses, totaled $39.1 million in the first
quarter of 2025, a 7% increase from $36.5 million in the first quarter of
2024.
-- Revenue share expense, which is included in Marketing expenses, was $12.5
million in the first quarter of 2025, a 38% increase compared to $9.1
million in the first quarter of 2024.
-- Adjusted operating expenses, which reflect operating expenses less
revenue share expense, stock-based compensation, depreciation, expenses
related to the settlement of antitrust litigation, and other unique or
non-cash expenses, were $21.2 million in the first quarter of 2025, an
increase of 56% from $13.6 million in the first quarter of 2024.
-- Adjusted operating expense per transaction was $631 in the first
quarter of 2025, a decline of 12% from $715 in the first quarter
of 2024.
-- Loss per share was $(0.02) in the first quarter of 2025, compared to a
loss per share of $(0.09) in the first quarter of 2024.
-- The Company repurchased 1.3 million common shares for $6.1 million in the
first quarter of 2025, pursuant to its normal course issuer bid.
Business Highlights and Recent Updates
-- Real Wallet Expansion. In the fourth quarter of 2024, Real launched the
Real Wallet, a financial technology platform that centralizes an agent's
access to certain Company-branded financial products.
-- Real Wallet currently includes:
-- Business checking accounts for select U.S. agents with
Thread Bank, Member FDIC, including a Company-branded debit
card.
-- Credit lines for select Canadian agents, based on their
earnings history with Real.
-- As of the end of April 2025:
-- Approximately 3,200 Real agents are utilizing Real Wallet
business checking accounts, with approximately 300
utilizing Real Wallet Tax Planning accounts.
-- The average deposit balance held in all Real Wallet
checking and tax planning accounts was approximately $8M.
Real Wallet represents a significant step in Real's strategy to integrate fintech solutions into its platform, providing agents with greater financial flexibility.
-- Real India Update. In the first quarter of 2025, Real converted 136
contractors in India to full-time employees, including 71 dedicated to
Research and Development, as part of a broader effort to scale core
functions and enhance agent support.
-- Following this investment in headcount, Real's agent-to-full-time
brokerage employee ratio declined to 88:1, from 136:1 as of Q4
2024.
-- This transition is not expected to have a material impact on
Real's financials, as these employees were already fully dedicated
to Real in a contractor capacity.
(1) All dollar references are in U.S. dollars.
(2) There are references to "Adjusted EBITDA" and "Adjusted Operating Expense"
in this press release, which are non-GAAP measures. See accompanying note
under the heading "Non-GAAP Measures" for an explanation of the composition of
these non-GAAP measures.
The Company will discuss the first quarter results on a conference call and live webcast today at 8:00 a.m. ET.
Conference Call Details:
Date: Thursday, May 8, 2025
Time: 8:00 am ET
North American Toll Free: 888-506-0062
Dial-in Number: International: 973-528-0011
Access Code: 209366
https://www.webcaster4.com/Webcast/Pag
Webcast: e/2699/52080
Replay Information:
North American Toll Free: 877-481-4010
Replay Number: International: 919-882-2331
Access Code: 52080
Replay Link: https://www.webcaster4.com/Webcast/Pag
e/2699/52080
Non-GAAP Measures
This news release includes references to "Adjusted EBITDA", and "Adjusted Operating Expense", which are non-U.S. generally accepted accounting principles ("GAAP") financial measures. Non-GAAP measures are not recognized measures under GAAP, do not have a standardized meaning prescribed by GAAP, and are therefore unlikely to be comparable to similar measures presented by other companies.
Adjusted EBITDA is used as an alternative to net income by removing major non-cash items, such as depreciation, amortization, interest, stock-based compensation, current and deferred income tax expenses and other items management considers unique and/or non-operating in nature.
Adjusted Operating Expense is used as an alternative to operating expenses by removing major non-cash items such as stock-based compensation, depreciation, and other unique or non-cash expenses, while retaining ongoing fixed operating expenses and excluding variable cash expenses associated with revenue share.
Adjusted EBITDA and Adjusted Operating Expense have no direct comparable GAAP financial measures. The Company has used or included these non-GAAP measures solely to provide investors with added insight into Real's financial performance. Readers are cautioned that such non-GAAP measures may not be appropriate for any other purpose. Non-GAAP measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Our Adjusted EBITDA is reconciled to the most comparable GAAP measure for the three months ended March 31, 2025 and 2024 and is presented in the table below labeled Reconciliation of Net Loss to Adjusted EBITDA. Our Adjusted Operating Expense reconciled to the most comparable GAAP measure is presented for the three months ended March 31, 2025 and on a quarterly basis for the prior two fiscal years in the table below labeled Reconciliation of Operating Expense to Adjusted Operating Expense.
THE REAL BROKERAGE INC.
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of U.S. dollars)
Unaudited
As of
---------------------------------------
March 31, 2025 December 31, 2024
---------------- ---------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 24,706 $ 23,376
Restricted cash 30,259 24,089
Investments in financial assets 10,554 9,449
Trade receivables 16,789 14,235
Other receivables 54 117
Prepaid expenses and deposits 1,533 1,645
TOTAL CURRENT ASSETS $ 83,895 $ 72,911
=========== ==============
NON-CURRENT ASSETS
Intangible assets, net 2,352 2,575
Goodwill 8,993 8,993
Property and equipment, net 2,245 2,116
Long-term financing receivables,
net 2,969 -
----------- --------------
TOTAL NON-CURRENT ASSETS $ 16,559 $ 13,684
----------- --------------
TOTAL ASSETS $ 100,454 $ 86,595
=========== ==============
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable 927 1,374
Accrued liabilities 33,572 25,939
Customer deposits 30,259 24,089
Other payables 3,177 3,050
----------- --------------
TOTAL CURRENT LIABILITIES $ 67,935 $ 54,452
----------- --------------
TOTAL LIABILITIES $ 67,935 $ 54,452
=========== ==============
EQUITY
EQUITY ATTRIBUTABLE TO OWNERS
Common Shares, $0 par value,
unlimited Common Shares
authorized, 205,285 Shares issued
and 205,158 outstanding (in
thousands) at March 31, 2025; and
202,941 Shares issued and 202,499
outstanding (in thousands) at
December 31, 2024 - -
Additional paid in capital 142,457 138,639
Deficit (109,713) (104,746)
Accumulated other comprehensive
income 599 708
Treasury stock, at cost, 127 and
442 Common Shares (in thousands)
at March 31, 2025 and December
31, 2024, respectively (591) (2,455)
----------- --------------
EQUITY ATTRIBUTABLE TO OWNERS $ 32,752 $ 32,146
----------- --------------
Non-controlling interests (233) (3)
TOTAL EQUITY $ 32,519 $ 32,143
----------- --------------
TOTAL LIABILITIES AND EQUITY $ 100,454 $ 86,595
=========== ==============
THE REAL BROKERAGE INC.
INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Expressed in thousands of U.S. dollars, except for per share amounts)
Unaudited
Three Months Ended March 31,
--------------------------------------
2025 2024
----------- ----------
Revenues $ 353,981 $ 200,743
Cost of Sales 320,045 179,984
----------- ----------
Gross Profit $ 33,936 $ 20,759
General and administrative expenses 17,516 12,136
Marketing expenses 17,697 12,629
Research and development expenses 3,932 2,462
Settlement of litigation -- 9,250
----------- ----------
Operating Expenses $ 39,145 $ 36,477
----------- ----------
Operating Loss $ (5,209) $ (15,718)
Other income 122 173
Finance expenses, net (34) (552)
----------- ----------
Net Loss $ (5,121) $ (16,097)
Net income attributable to
noncontrolling interests (154) --
----------- ----------
Net Loss Attributable to the Owners
of the Company $ (4,967) $ (16,097)
Other comprehensive income/(loss):
Unrealized gain on investments in
financial assets 12 43
Foreign currency translation
adjustment (121) 119
----------- ----------
Total Comprehensive Loss
Attributable to Owners of the
Company $ (5,076) $ (15,935)
----------- ----------
Total Comprehensive Income
Attributable to NCI (154) --
----------- ----------
Total Comprehensive Loss $ (5,230) $ (15,935)
Loss per share
Basic and diluted loss per share $ (0.02) $ (0.09)
----------- ----------
Weighted-average shares, basic and
diluted 204,382 184,692
----------- ----------
THE REAL BROKERAGE INC.
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
(U.S. dollar in thousands)
Unaudited
Three Months Ended March 31,
--------------------------------------
2025 2024
---------- -----------
OPERATING ACTIVITIES
Net Loss $ (5,121) $ (16,097)
Adjustments for:
Depreciation and amortization 379 326
Equity-settled share-based payment 12,707 8,844
Finance costs (149) 129
Change in fair value of warrants
liability - 271
Changes in operating asset and
liabilities:
Trade receivables (2,555) (3,094)
Other receivables 63 (27)
Long-term financing receivables (2,969) -
Prepaid expenses and deposits 112 910
Accounts payable (447) 522
Accrued liabilities 7,633 7,840
Customer deposits 6,170 11,492
Other payables 127 10,364
---------- -----------
NET CASH PROVIDED BY OPERATING
ACTIVITIES $ 15,950 $ 21,480
INVESTING ACTIVITIES
Purchase of property and equipment (285) (96)
Purchase of financial assets (1,350) (171)
Sale of financial assets 257 22
---------- -----------
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES $ (1,378) $ (245)
FINANCING ACTIVITIES
Purchase of common shares for
Restricted Share Unit (RSU) Plan (6,122) (4,623)
Payment of employee taxes on certain
share-based arrangements (1,213) (321)
Proceeds from exercise of stock
options 310 613
Distributions to non-controlling
interest (76) (38)
---------- -----------
NET CASH USED IN FINANCING
ACTIVITIES $ (7,101) $ (4,369)
Net change in cash, cash equivalents
and restricted cash 7,471 16,866
Cash, cash equivalents and
restricted cash, beginning of year 47,465 27,655
Effect of foreign exchange rate
changes on cash, cash equivalents,
and restricted cash 29 (9)
---------- -----------
CASH, CASH EQUIVALENTS AND
RESTRICTED CASH, ENDING BALANCE $ 54,965 $ 44,512
========== ===========
THE REAL BROKERAGE INC.
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(Expressed in thousands of U.S. dollars)
Unaudited
For the Three Months Ended
---------------------------------------
March 31, 2025 March 31, 2024
------------------- ------------------
Net Loss $ (5,121) $ (16,097)
Add/(Deduct):
Finance Costs 34 671
Depreciation and Amortization 379 326
Stock-Based Compensation 12,707 8,844
Restructuring Expenses 250 -
Expenses related to Anti-Trust
Litigation Settlement 27 9,857
--- ------------- -----------
Adjusted EBITDA $ 8,276 $ 3,601
THE REAL BROKERAGE INC.
BREAKOUT OF REVENUE BY SEGMENT
(Expressed in thousands of U.S. dollars)
Unaudited
For the Three Months Ended
---------------------------------------
March 31, 2025 March 31, 2024
------------------- ------------------
Main revenue streams
Commissions 351,749 199,252
Title 1,030 795
Mortgage Income 1,076 696
Wallet 126 --
---- ------------- ------------
Total Revenue $ 353,981 $ 200,743
==== ============= ============
THE REAL BROKERAGE INC.
RECONCILIATION OF OPERATING EXPENSE TO ADJUSTED OPERATING EXPENSE BY QUARTER
(Expressed in thousands of U.S. dollars)
Unaudited
2023 2024 2025
---------------------------------------------- ---------------------------------------------- ----------
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating Expense 17,846 21,499 22,742 26,796 36,477 32,512 34,607 36,371 39,145
Less: Revenue
Share Expense 5,434 7,684 7,946 6,840 9,064 12,475 11,651 9,537 12,504
Revenue Share
Expense (% of
revenue) 5.0% 4.1% 3.7% 3.8% 4.5% 3.7% 3.1% 2.7% 3.5%
Less:
Stock-Based
Compensation -
Employees 1,019 1,214 285 6543 1,493 2,265 3,139 3,405 1,651
Stock-Based
Compensation -
Agent 1,541 1,640 2,769 1,830 2,137 2,335 2,665 2,940 3,115
Depreciation
and
Amortization
Expense 269 284 277 298 326 340 358 372 379
Restructuring
Expense 41 44 80 58 -- -- -- -- 250
Expenses
Related to
Anti-Trust
Litigation
Settlement -- -- -- -- 9,857 369 33 118 27
Subtotal 2,870 3,182 3,411 8,729 13,813 5,309 6,195 6,835 5,422
Adjusted Operating
Expense(1) 9,542 10,633 11,385 11,227 13,600 14,728 16,761 19,998 21,219
Adjusted Operating
Expense (% of
revenue) 8.8% 5.7% 5.3% 6.2% 6.8% 4.3% 4.5% 5.7% 6.0%
(1) Adjusted operating expense excludes revenue share, stock-based compensation, depreciation and other non-recurring or non-cash
expenses.
THE REAL BROKERAGE INC.
KEY PERFORMANCE METRICS BY QUARTER
(Dollar amounts expressed in U.S. dollars)
Unaudited
2023 2024 2025
---------------------------------- ---------------------------------- ---------
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
------- ------- ------- ------- ------- ------- ------- ------- ---------
Transaction
Data
--------------
Closed
Transaction
Sides 10,963 17,537 20,397 17,749 19,032 30,367 35,832 35,370 33,617
Total Value of
Home Side
Transactions
($,
billions) 4.0 7.0 8.1 6.8 7.5 12.6 14.4 14.6 13.5
Median Home
Sales Price
($,
thousands) $ 350 $ 369 $ 370 $ 355 $ 372 $ 384 $ 383 $ 380 $ 380
Agent Metrics
--------------
Total Agents 10,000 11,500 12,175 13,650 16,680 19,540 21,770 24,140 26,870
Agent Churn
Rate (%) 8.3 6.5 10.8 6.2 7.9 7.5 7.3 6.8 8.7
Revenue Churn
Rate (%) 4.3 3.8 4.5 4.9 1.9 1.6 2.0 1.8 2.5
Headcount and
Efficiency
Metrics
--------------
Full-Time
Employees 127 145 162 159 151 231 240 264 410
Full-Time
Employees,
Excluding One
Real Title
and One Real
Mortgage 88 102 120 118 117 142 155 178 307
Headcount
Efficiency
Ratio(1) 1:114 1:113 1:101 1:116 1:143 1:138 1:140 1:136 1:88
Revenue Per
Full Time
Employee ($,
thousands)(2) $ 1,226 $ 1,817 $ 1,789 $ 1,537 $ 1,716 $ 2,400 $ 2,403 $ 1,970 $ 1,153
Operating
Expense
Excluding
Revenue Share
($,
thousands)(3) $12,412 $13,815 $14,796 $19,956 $27,413 $20,037 $22,956 $26,835 $26,641
Operating
Expense Per
Transaction
Excluding
Revenue Share
($)(4) $ 1,132 $ 788 $ 725 $ 1,124 $ 1,440 $ 660 $ 641 $ 759 $ 792
Adjusted
Operating
Expense ($,
thousands)(5) $ 9,542 $10,633 $11,385 $11,226 $13,600 $14,728 $16,761 $19,998 $21,219
Adjusted
Operating
Expense Per
Transaction
($) $ 870 $ 606 $ 558 $ 632 $ 715 $ 485 $ 468 $ 565 $ 631
(1) Defined as the ratio of full-time brokerage employees (excluding One Real Title and One Real
Mortgage employees) to the number of agents on our platform
(2) Reflects total company revenue divided by full-time brokerage employees (excludes One Real
Title and One Real Mortgage employees)
(3) Defined as total operating expenses per the Company's statement of comprehensive loss, less
revenue share disclosed in the Company's expense by nature footnote disclosure in the Financial
Statements
(4) Defined as operating expense excluding revenue share, divided by closed transaction sides
(5) Adjusted operating expense excludes revenue share, stock-based compensation, depreciation and
other non-recurring or non-cash expenses.
Forward-Looking Information
This press release contains forward-looking information within the meaning of applicable Canadian securities laws. Forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "expect", "likely" and "intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions. These statements reflect management's current beliefs and are based on information currently available to management as at the date hereof. Forward-looking information in this press release includes, without limiting the foregoing, information relating to Real's expectation regarding increasing the number of agents, revenue growth and profitability and the business, strategic plans of Real and expectations regarding Real Wallet and Leo CoPilot, including their anticipated features.
Forward-looking information is based on assumptions that may prove to be incorrect, including but not limited to Real's business objectives, expected growth, results of operations, performance, business projects and opportunities and financial results. Real considers these assumptions to be reasonable in the circumstances. However, forward-looking information is subject to known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those expressed or implied in the forward-looking information. Important factors that could cause such differences include, but are not limited to, slowdowns in real estate markets, economic and industry downturns, Real's ability to attract new agents and retain current agents, Real's inability to successfully launch new products and features, including Real Wallet, Leo CoPilot and Leo for Clients and those risk factors discussed under the heading "Risk Factors" in the Company's Annual Information Form dated March 6, 2025, and "Risks and Uncertainties" in the Company's Quarterly Management's Discussion and Analysis for the period ended March 31, 2025, copies of which are available under the Company's SEDAR+ profile at www.sedarplus.ca.
These factors should be carefully considered and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, Real cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this press release, and Real assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.
About Real
Real (NASDAQ: REAX) is a real estate experience company working to make life's most complex transaction simple. The fast-growing company combines essential real estate, mortgage and closing services with powerful technology to deliver a single seamless end-to-end consumer experience, guided by trusted agents. With a presence in all 50 states throughout the U.S. and Canada, Real supports over 27,000 agents who use its digital brokerage platform and tight-knit professional community to power their own forward-thinking businesses. Additional information can be found on its website at www.onereal.com.
The Real Brokerage is a real estate technology company and is not a bank. Banking services are provided by Thread Bank, Member FDIC. The Real Wallet Visa debit card is issued by Thread Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc. and may be used anywhere Visa cards are accepted.
View source version on businesswire.com: https://www.businesswire.com/news/home/20250508081018/en/
CONTACT: For additional information, please contact:
Ravi Jani
Chief Financial Officer
investors@therealbrokerage.com
908.280.2515
For media inquiries, please contact:
Elisabeth Warrick
Senior Director, Marketing, Communications & Brand
elisabeth@therealbrokerage.com
201.564.4221
(END) Dow Jones Newswires
May 08, 2025 07:00 ET (11:00 GMT)
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.