Release Date: March 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- The Real Brokerage Inc (REAX, Financial) reported record 4th quarter and full year 2024 results, with revenue growing to $1.3 billion, marking its first-ever billion-dollar revenue year.
- The company closed over 120,000 transactions in 2024, an increase of 81% compared to 2023, demonstrating strong growth in transaction volume.
- Agent count increased by 77% year-over-year, ending 2024 with 24,140 agents and reaching approximately 26,200 agents by early 2025.
- The Real Brokerage Inc (REAX) launched innovative products like Leo CoPilot, an AI-powered agent assistant, and Real Wallet, a fintech platform, enhancing agent productivity and financial services.
- The company achieved a significant improvement in adjusted EBITDA, reaching $40 million in 2024, up 188% from the previous year, indicating strong financial performance.
Negative Points
- The Real Brokerage Inc (REAX) reported a net loss attributable to the owners of the company of $26.5 million for the full year 2024.
- Operating expenses increased to $140 million in 2024, including $10.4 million related to antitrust litigation, which impacted profitability.
- Despite growth in ancillary services, mortgage and title contributed less than 1% of total revenue, highlighting the need for further expansion in these high-margin areas.
- The company anticipates a sequential decline in revenue for the first quarter of 2025 due to seasonality in the existing home sales market.
- The Real Brokerage Inc (REAX) is still in a period of investment, which may delay achieving positive net margins in the near term.
Q & A Highlights
Q: Can you explain why there wasn't a significant dip in your business during the fourth quarter, despite historical seasonal trends?
A: Tamir Poleg, CEO, explained that the strong growth and market share gains contributed to the performance. Additionally, favorable market conditions, especially in December, played a role.
Q: What are the plans for scaling the ancillary business, particularly with the hiring of Nancy Marsden?
A: Tamir Poleg, CEO, noted that Nancy Marsden's experience in scaling title companies will help improve attach rates for title and mortgage services. The company aims to enhance service levels and talent to drive significant improvement in 2025.
Q: How is the agent recruitment pipeline looking for the next few quarters?
A: Sharran Srivatsaa, President, stated that the pipeline is the largest it has ever been, with strong momentum expected to continue. However, moving larger teams and brokerages can be complex and take time.
Q: How do you plan to grow the loan officer headcount and improve attach rates for mortgage services?
A: Tamir Poleg, CEO, mentioned that they ended the year with 90 loan officers, up from 18. Initiatives like offering incentives to buyers and opening an API for mortgage companies are expected to drive attach rates.
Q: What are the unit economics of title and mortgage transactions compared to traditional brokerage transactions?
A: Tamir Poleg, CEO, explained that a title transaction typically generates $3,000 in revenue at an 80% gross margin, while a mortgage transaction generates $6,000 at a 50% gross margin. Combining these with brokerage transactions significantly enhances the margin profile.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
