Q4 2024 The Real Brokerage Inc Earnings Call
Operator: 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.
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 one 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.
Operator: 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.
Ravi Jani: It is now my pleasure to turn the floor over to your host, Ravi Jani. Sir, the floor is yours. Thanks and good morning.
Speaker Change: It is now my pleasure to turn the floor over to your host Ravi Johnny Sir the floor is yours.
Speaker Change: 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 31, 2024, we appreciate everyone for joining us today with me on the call today are Tim your polling our chairman and Chief Executive Officer Huron Street Gloucester.
Ravi Jani: 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.
Ravi Jani: With me on the call today are Tamir Poleg, our Chairman and Chief Executive Officer, Sharran Srivatsaa, 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's 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 CDER.
Speaker Change: President Michel Ressler, our Chief Financial Officer.
Speaker Change: This morning real published an earnings press release, including results for the fourth quarter ended December 31, 2020 for 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.
Speaker Change: The Canadian Securities regulators on Cedar.
Ravi Jani: 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 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.
Speaker Change: 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.
Speaker Change: Continuous disclosure documents in the SEC reports.
Speaker Change: <unk> disclaims any intent or obligation to update these forward looking statements, except as expressly required by law.
Tamir Poleg: With that, I'd like to turn the call over to our Chairman and Chief Executive Officer, Tamir Poleg. Tamir, please proceed. Good morning and thank you, Ravi.
Speaker Change: That I would like to turn the call over to our chairman and Chief Executive Officer, Tim Your polling.
Sir Please proceed.
Tim Yourpolling: Good morning, and thank you Robby.
Tamir Poleg: I will start with an overview of our strategy and some recent business highlights.
Speaker Change: 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 the agent experience and Michelle will provide a more in depth discussion of our financial results this quarter.
Sharran Srivatsaa: Sharran 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.
Tamir Poleg: I'll then provide a few closing remarks before opening up the call for Q&A.
Speaker Change: I'll then provide a few closing remarks before opening up the call for Q&A.
Tamir Poleg: 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, 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 clients.
Speaker Change: To begin really the real estate technology company that is differentiated in our industry.
Traditional real estate brokerage firms, we provide real estate agents with a compelling combination of financial incentives are proprietary software based technology platform, which eliminates the need for it and agents physical office space and a collaborative culture that we believe is unique in our industry.
Speaker Change: 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 clients.
Tamir Poleg: 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 homebuyers and sellers could also benefit from the breadth of our service offering.
Speaker Change: In the short term. This vision include the rollout of a consumer facing product, which streamlines the client experience and enhances attachment of our higher margin ancillary services.
Speaker Change: 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.
Speaker Change: Ultimately as the platform matures, we believe home buyers and sellers could also benefit from the breadth of our service offering.
Tamir Poleg: 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.
Speaker Change: Our goal is to redefine the role of our 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.
Speaker Change: That is why we remain relentless in our focus on delivering long term value for our agents for their clients and for shareholders.
Tamir Poleg: Turning to the numbers, this morning Real 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.
Speaker Change: Turning to the numbers. This morning, we reported record fourth quarter and full year 2024 results.
Speaker Change: For the year, we closed over 120000 transactions, an increase of 81% versus 2023.
Speaker Change: Total transaction value reached $49 billion up 90% year over year, while revenue grew to $1 3 billion, marking our first ever $1 billion revenue year, and marking an increase of 84% from $689 million in 2023.
Speaker Change: Gross profit in 2024 grew 82% year over year to $115 million well adjusted EBITDA reached a record $40 million up 188% from the prior year.
We ended the year with 24140 agents up 77% from the prior year and as of this morning, our agent Count is approximately 26200 agents.
Speaker Change: Meaning we've added another 2000 net agents since the start of 2025.
Tamir Poleg: 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.
Speaker Change: We believe these results are proof that our vision is resonating in the industry.
Speaker Change: 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 in mortgage rates remaining higher for longer waiting is not a strategy at real we are focused instead on building for.
Tamir Poleg: At Real, we are focused instead on building for the future. This focus has led to incredible momentum across several key initiatives.
Speaker Change: The future.
Speaker Change: This focus has led to incredible momentum across several key initiatives.
Tamir Poleg: 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.
Speaker Change: First Leo co pilot.
Speaker Change: Our AI powered agent assistant is now integrated across our brokerage platform regularly handling over 2000 daily agent interactions and helping to automate workflows that previously required human support or intervention.
Speaker Change: Yoko pilot is a tool that enhances the brokerage and agent productivity and efficiency at scale. Meanwhile, we expect to launch our Lisle for clients product later this year, giving our agents another tool to delight their clients with.
Tamir Poleg: Meanwhile, we expect to launch our Leo for Clients product later this year, giving our agents another tool to delight their clients with.
Tamir Poleg: 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.
Speaker Change: Second real wallet our.
Speaker Change: Our fintech platform that was purpose built for real agents is rapidly expanding.
Speaker Change: Today through a reason software real agents in the U S can apply for a real wallet business checking accounts offered through our bank partner thread bank and receive a real branded debit card. Meanwhile, age.
Speaker Change: Agents in Canada can apply for a line of credit based on their earnings and production history with real.
Speaker Change: Today, approximately 2500 agents have opened real wallet business checking accounts with an aggregate deposit balances of approximately $7 million in.
Speaker Change: In Canada over 150 agents have access to credit lines, drawing over $1 million.
Tamir Poleg: 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 WeWallet at over $500,000, a number that we will continue to disclose going forward.
Speaker Change: 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.
Speaker Change: We continue rolling out new products and features we expect our adoption numbers to continue to grow in the future.
Speaker Change: Just four months post launch we estimate the annualized run rate revenue from re wallet at over $500000. A number that we will continue to disclose going forward.
Tamir Poleg: Third, regarding One Real Mortgage and One Real Title, we continue to make progress scaling these 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.
Speaker Change: Third regarding one of your mortgage and one real title, we continued to make progress scaling this high margin ancillary business lines for the full year of 2024 mortgage entitled grew by a combined 105% with over 200% growth at one wheel mortgage and 60% growth at one real title.
Tamir Poleg: For the year, Mortgage Entitled contributed less than 1% of total revenue, but given gross margins for these businesses are typically 5 to 8 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.
Speaker Change: For the year mortgage entitled contributed less than 1% of total revenue, but given gross margins for this businesses are typically five to eight times higher than our average brokerage gross margins. They contributed over 5% of our gross profit.
Speaker Change: 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.
Tamir Poleg: To that end, in January, we were pleased to welcome Nancy Marsden as the new CEO of OneRealTitle. 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.
Speaker Change: To that end in January we were pleased to welcome Nancy Marsden as the new CEO of one real title Nancy the seasoned industry veteran who joins US from Redfin is titled forward, where she was a member of the team credited with driving some of the highest attach rates in the industry.
Tamir Poleg: Meanwhile, at OneReal 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.
Speaker Change: Meanwhile, at one way a mortgage or a loan officer count has grown to 90 today up from 18 at the start of 'twenty 'twenty, four notably nearly half of our L. Owes a 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.
Speaker Change: And their clients greater visibility and control over the transaction process.
Speaker Change: 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.
Tamir Poleg: Before turning to Sharran, 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 C$40 per transaction fee and increased the maximum commission cap to C$15,000 from C$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.
Speaker Change: Before turning to Sharon 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.
Speaker Change: First in the U S. We increased to $30 transaction fee for broker review insurance and transaction processing to $40.
Speaker Change: In Canada, we announced a 40 Canadian dollar per transaction fee and increased the maximum commission cap 215000 Canadian dollars from 12000 previously.
Speaker Change: Additionally, in both the U S and Canada, we announced a decrease in the post cap RFU bonus for agents, who participate in our stock purchase plan, which will decline from 20% to 15%.
Speaker Change: These changes will begin to take effect on April 1st.
Speaker Change: 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.
Tamir Poleg: 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 agent experience while also effectively managing inflation, increased operating costs, and evolving regulatory requirements.
Speaker Change: It is important to note that until now we have made no changes to our business model in Canada since launching nearly four years ago give.
Speaker Change: Given our experience in the country. We felt these adjustments were necessary to better reflects the exchange rate difference between the two countries as well as the higher cost of operations in Canada.
Speaker Change: Importantly, with these changes in place we can continue investing in enhancing the agent experience, while also effectively managing inflation increased operating costs and evolving regulatory requirements.
Tamir Poleg: 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.
Speaker Change: 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.
Sharran Srivatsaa: With that, I'll turn it over to Sharran for an update on our growth and agent initiative. Thank you, Tamir, and good morning, everyone. I'll provide an update in a top five format to highlight some of the key themes for 2024 and our forward focus as we head into 2025.
Speaker Change: With that I'll turn it over to Sharon for an update on our growth and agent initiative.
Sharon: Thank you Tamara and good morning, everyone I will provide an update and a top five format to highlight some of the key themes for 2024, and our fourth focus as we head into 'twenty 'twenty five.
Sharran Srivatsaa: Number one, a milestone year for agent growth. 2024 was an amazing year for agent growth at Real. We added over 10,000 net agents in the year, a truly remarkable feat, especially considering it took us nearly nine years to reach our first 10,000. We close 2024 with more than 24,000 agents up from 13,650 just one year prior at the end of 2020. This is not just growth, but an acceleration that reflects the increasing appeal of our model. More agents are choosing Real because they see a company that is forward-looking, tech-enabled, and fully aligned both culturally and financially with their success.
Speaker Change: Number one.
Speaker Change: Stone year for agent growth 'twenty 'twenty four it was an amazing year for agent growth of real we added over 10000 net agents in the year, a truly remarkable feat, especially considering it took us inherently nine years to reach our first 10000 agents. We closed 2024 with more than 24000 agents up from 13000.
Speaker Change: He just one year prior at the end of 2023.
Speaker Change: It's not just growth, but an acceleration that reflects the increasing appeal of our model more agents are choosing real because they see a company that is forward looking tech enabled and fully align both culturally and financially with their success. We believe our agent attraction pipeline is strong and we are confident in continuing this momentum into 'twenty 'twenty five.
Sharran Srivatsaa: We believe our agent attraction pipeline is strong, and we are confident in continuing this momentum into 2025, regardless of broader market trends.
Speaker Change: Regardless of broader market conditions, our number two.
Sharran Srivatsaa: All right, number two, the power of private label and large scale team. Since launching last January, our private label program has been a game changer for independent brokerages looking to join Real, all while maintaining their established brand identity. Since launching last year, we've welcomed approximately 40 independent brokerages, representing nearly 1,200 agents through this initiative alone.
Speaker Change: The power of private label and large scale team expansion.
Speaker Change: Since launching last January our private label program has been a game changer for independent brokerages looking to John rail all while maintaining their established brand identity.
Speaker Change: Since launching last year, we've welcomed approximately 40 independent brokerages, representing nearly 1200 agents through this initiative alone in January we announced our largest private label addition to date harvest Realty out of California, which is expected to bring 550 agents onto our platform.
Sharran Srivatsaa: In January, we announced our largest private label addition to date, Harvest Realty, out of California, which is expected to bring 550 agents onto our platform. This growing adoption underscores the value of providing agents with the flexibility to keep the brands that they've worked so hard to build, to operate the business their way, all while leveraging the technology, and the resources, and the scale of the real player.
Speaker Change: This growing adoption underscores the value of providing agents with the flexibility to keep the brands that they've worked so hard to build to operate the business. The airway all while leveraging the technology and the resources and the scale of the real platform Alright number three enhancing the agent experience via investment in operations training and support.
Sharran Srivatsaa: All right, number three, enhancing the agent experience via investment in operations training. Now, this explosive growth requires best-in-class onboarding, training, and operational support for our agents. So, in partnership with our Chief Operating Officer, General Rosenblatt, we have made strategic investments to strengthen our brokerage operations, enhance agent experience, and expand our overall support infrastructure.
Speaker Change: Now this explosive growth requires best in class Onboarding training and operational support for our agents. So in partnership with our Chief operating Officer General Rosenblatt, we have made strategic investments to strengthen our brokerage operations and had to eat in experience and expand our overall support infrastructure.
Sharran Srivatsaa: This is not just to service the current growth, but also to thoughtfully prepare the chassis for the upcoming years of growth and delivery. Let me actually break down a few of the key initiatives. First, we've onboarded experienced leaders in brokerage leadership, agent experience, and operational functions, all directly helping facilitate smooth transactions, which are core to driving revenue. Number two, we're also doubling down on training and agent performance efforts in 2025, starting with the new leadership of Drew Thompson to lead Real Academy and agent development. We are also launching tailored training programs designed specifically for three of our core agent avatars, each with very distinct business models.
Speaker Change: This is not just to service their current growth, but also to thoughtfully prepared the chassis for the upcoming years of growth in delivery, let me actually break down a few of the key initiatives for you.
Speaker Change: We've on boarded experienced leaders in brokerage leadership experience and operational functions all directly helping facilitate smooth transactions, which are core to driving revenue.
Speaker Change: Number two we're also doubling down on training and agent performance efforts in 2025, starting with the new leadership of drew Thompson to lead real Academy and agent development.
Speaker Change: We're also launching tailored training programs designed specifically for three of our core agent avatars, each with very distinct business models and needs first for individual agents, we're launching a dedicated coaching and training program focused on helping individual agents with marketing systems and skills to drive revenue growth.
Sharran Srivatsaa: First, for individual agents, we're launching a dedicated coaching and training program focused on helping individual agents with marketing systems and skills to drive revenue Individual agents play a critical role in Real's culture and success. Their needs are completely unique, which is why we're committed to delivering customized solutions to help this group directly. Second, for agent teams, as I mentioned, teams have been a major driver of growth and revenue at Real. We're enhancing our existing team training with dedicated team leaders and indie brokerage masterminds to share best practices and operational insights to grow revenue even further.
Speaker Change: Individual agents play a critical role in Reals culture and success there needs are completely unique which is why we're committed to delivering customized solutions to help this group directly.
Speaker Change: Second for agent teams and as I mentioned teams have been a major driver of growth in revenue at real we're enhancing our existing team training what dedicated team leaders and indeed brokerage masterminds to share best practices and operational insights to grow revenue even further.
Sharran Srivatsaa: And third, our enterprise team models. This refers to larger organizations that have high transaction volumes, starting at $100 million plus in GMB. I'm personally leading our $100 million roundtable initiative, along with our mentors, Dave Keener, Eric Hatch, and Amy Youngren, all accomplished enterprise leaders.
Speaker Change: And third our enterprise team models. This refers to larger organizations that have high transaction volume starting at $100 million plus N. G. M. B I am personally leading our 100 million dollar round table initiative.
Speaker Change: Along with our mentors, Dave Keener, Eric Hatch, and Amy younger and all accomplished enterprise leaders. This is a major upgrade in year two of these initiatives, providing high level leadership training operational best practices and a scalable systems for our enterprise teams simply put.
Sharran Srivatsaa: This is a major upgrade in year two of this initiative, providing high-level leadership training, operational best practices, and scalable systems for our enterprise teams. Simply put, we believe there are few, if any, brokerages that can offer this level of training and support at scale across the entire planet.
Speaker Change: We believe there are few if any brokerages that can offer this level of training and support at scale across the entire platform.
Sharran Srivatsaa: Number 4. Agent retention, churn, and our philosophy on long-term value. We are incredibly proud of the thousands of agents who have chosen Real as their home.
Speaker Change: Number four agent retention churn and our philosophy on long term value. We are incredibly proud of the thousands of agents who have chosen real as their home, but we also recognize that real the real estate is not a one size fits all business agents have diverse business models and personal circumstances that may lead them to explore other options.
Sharran Srivatsaa: But we also recognize that real estate is not a one-size-fits-all business. Agents have diverse business models and personal circumstances that may lead them to explore other options. While we believe that Real provides the most compelling combination of economics and technology and flexibility and culture, we know that some level of churn is just simply inevitable. That said, we are pleased that our revenue churn was only 1.8% in the quarter and has remained steady at 2% or lower throughout 2024, a strong indicator that we're successfully retaining the vast majority of our production.
Speaker Change: While we believe that real provides the most compelling combination of economics, and technology and flexibility and culture. We know that some level of churn is just simply inevitable.
Speaker Change: That said, we are pleased that our revenue churn was only one 8% in the quarter and has remained steady at 2% or lower throughout 'twenty 'twenty four a strong indicator that we're successfully retaining the vast majority of our productive agents of course, we strive for her world with zero churn and we remain committed to <unk>.
Sharran Srivatsaa: Of course, we strive for a world with zero churn, and we remain committed to pushing the boundaries of what is possible to ensure that our agents who align with our vision Real as the best place to build their Alright, number five, Real's growing presence in the luxury Lastly, I'm incredibly excited about the momentum we're seeing in real luxury, our dedicated division for high-end real estate.
Speaker Change: Pushing the boundaries of what is possible to ensure that our agents who are aligned with our vision see real as the best place to build their careers alright.
Speaker Change: Alright number five reals growing thousands in the luxury market.
Speaker Change: Lastly, I'm and I'm incredibly excited about the momentum we're seeing in a real luxury our dedicated division for high end real estate. This was a major initiative that launched in May of 'twenty 'twenty four led by our Chief Marketing Officer Green Madden, along with coffee Naughty, who serves as our executive director.
Sharran Srivatsaa: This was a major initiative that launched in May of 2024, led by our chief marketing officer, Dre Madden, along with Kofi Nartey, who serves as our executive director. A Real's Luxury Division has one of the highest qualification standards of any brokerage platform in the industry. A few highlights, we now have over 230 certified real luxury agents. We have already closed over a billion dollars in luxury transaction volume. We have another billion dollars of transaction volume in the pipeline, meaning we're on pace to more than double our luxury transactions.
Speaker Change: A real luxury division has one of the highest qualification standards of any brokerage platform in the industry. A few highlights. We now have over 230 certified real luxury agents, we have already closed over $1 billion in luxury transaction volume, we have another $1 billion of transaction volume in the pipeline means.
Speaker Change: We're on pace to more than double our luxury transactions this year.
Sharran Srivatsaa: Now as we head into 2025, our priorities remain clear, continue to drive agent growth, roll out initiatives to support our agents, invest in operational excellence and agent performance, expand our technology ecosystem, and most importantly, stay true to our mission of empowering agents with the best platform.
Speaker Change: Now as we head into 2025, our priorities remain clear continued.
Speaker Change: Continue to drive agent Grote rollout initiatives to support our agents invest in operational excellence and agent performance expand our technology ecosystem and most importantly stay true to our mission of empowering agents with the best platform in the industry.
Sharran Srivatsaa: Thank you.
Sharran Srivatsaa: Thank you to our agents, our employees, and our partners. I could not be more excited about what's ahead.
Michelle: Thank you. Thank you to our agents our employees and our partners I could not be more excited about what's ahead now I'll pass it to Michelle for the financials.
Michelle Ressler: Now, I'll pass it to Michelle for the financial. Thank you, Sharran, and thank you, everyone, for joining us. Before diving into our results for 2024, I want to acknowledge the remarkable year of performance across the board. In addition to adding over 10,000 agents, RealGroo revenue 84% crossed the $1 billion revenue mark and delivered four quarters straight a positive adjusted EBITDA, all despite the worst existing home sales market in three decades.
Michelle: Thank you Sharon and thank you everyone for joining us.
Michelle: Before diving into our results for 2024, I want to acknowledge the remarkable year well it's across the board. In addition to adding over 10000 agents. We all grew revenue 84 per cent crossed the $1 billion revenue, Mark and delivering four quarters straight positive adjusted EBITA.
Michelle: Despite the worst existing home sales market in three decades.
Michelle Ressler: While we're not providing formal guidance for 2025, given our continued strong aging growth, we expect to deliver significant year-over-year improvement in revenue, growth profit, and adjusted EBITDA. Seasonally, we expect the first quarter will be the lowest of the year for revenue and adjusted EBITDA, while Q3 will be the highest.
Michelle: Well, we're not providing formal guidance for 2025, given our continued strong agent growth, we expect to deliver significant year over year in revenue gross profit and adjusted EBIDTA seasonally we expect the first quarter will be the lowest of the year for revenue and adjusted EBIDTA, well Q3 will be the highest.
Michelle Ressler: One more housekeeping note.
One more housekeeping note this quarter, we transitioned our financials to U S. GAAP. This change had no notable impact from prior periods. However, we have filed all of our quarterly financials for the first three quarters of 'twenty 'twenty, four and connection with our full year financial statements filing.
Michelle Ressler: This quarter, we transitioned our financials to US GAAP. This change had no notable impacts on prior periods. However, we have refiled all of our quarterly financials for the first three quarters of 2024 in connection with our full year financial statement filing.
Michelle Ressler: Now for the financials. Full year 2024 revenue of $1.3 billion increased 84% from $689 million in 2023, while total transactions increased 81% to $120,601. Full year 2024 gross profit increased 82% to $114.7 million compared to $62.9 million in 2023. Operating expenses were $140 million, including approximately $10.4 million of expenses related to antitrust litigation, compared to $88.9 million in 2023. We paid $42.7 million in revenue share during the year. Full year 2024 net loss attributable to the owners of the company was $26.5 million. This compares to 2023 net loss attributable to the owners of the company of $27.5 million.
Michelle: Now for the financials.
Full year 2024 revenue of $1.3 billion increased 84% from $609 million in 2023 well total transactions increased 81% to 120601.
Michelle: Full year 2024, gross profit increased 82% to $114 7 million compared to $62 9 million in 2023.
Michelle: Operating expenses were 140 million, including approximately $10 4 million of expenses related to anti Trust litigation.
Michelle: Third to $88 9 million in 2023 with.
Michelle: We paid $42 7 million in revenue share during the year.
Michelle: Full year 'twenty 'twenty, four and net loss attributable to the origin of the company was $26 5 million. This.
Michelle: This compares to 2023 net loss attributable to the owners of the company of $27 5 million.
Michelle Ressler: Notably, growth in gross profit outpaced growth in our recurring cash operating expenses, resulting in full year 2024 adjusted EBITDA of $40 million, a significant improvement from $13.9 million in 2023, or $7.6 million when excluding the impact of a non-recurring balance sheet adjustment taken in 4Q2023. For the full year 2024, we generated $49 million of cash flows from operations and allocated $36 million to share repurchases, including $6 million in the fourth quarter of 2024.
Michelle: Notably growth in gross profit outpaced growth in our recurring cash operating expenses, resulting in full year 2024, adjusted EBITDA of 48 million a significant improvement with $13 9 million in 2023 or 7.6 million when excluding the impact of the nonrecurring balance sheet adjustment taken in 14 in 2023.
Michelle: For the full year 'twenty 'twenty, four we generated $49 million of cashless from operations and allocated 36 million to share repurchases, including $6 million in the fourth quarter of 2024.
Michelle Ressler: Moving on to the quarter. Revenue in the fourth quarter of 2024 rose to $351 million, an increase of 93% versus $181 million in the fourth quarter of 2023. This was driven by a 93% increase in brokerage revenue, resulting from 99% growth in the number of transactions closed, which totaled $35,370 in the quarter. Revenues from ancillary businesses totaled $2.5 million during the fourth quarter of 2024, an increase of 176% versus the fourth quarter of 2023, driven by 163% growth in one real mortgage business and 179% growth in one real title.
Michelle: Moving on to the quarter.
Michelle: Revenue in the fourth quarter of 2024, it rose to $351 million, an increase of 93% versus 181 million in the fourth quarter of 2023. This was driven by a 93% increase in brokerage revenue, resulting from 99% growth in the number of transactions close which totaled 35000.
Michelle: 370 in the quarter.
Michelle: Well there are some ancillary businesses totaled $2 5 million during the fourth quarter of 2024, an increase of 176% versus the fourth quarter of 2023, driven by 163% growth in one real mortgage business and 179% growth in one real title.
Michelle Ressler: Additionally, Real Wallet contributed $42,000 in its launch quarter. As Tamir mentioned, the current annualized revenue run rate is in the mid-hundreds of thousands of dollars and growing.
Michelle: Additionally, real wallet contributed $42000 in its launch quarter as Tim had mentioned the current annualized revenue run rate is in the mid hundreds of thousands of dollars and growing.
Michelle Ressler: With respect to the first quarter of 2025, we expect revenue to decline sequentially compared to the fourth quarter of 2024, which is consistent with the seasonality in the existing home sales market. Gross profit for the fourth quarter of 2024 was $30 million, an increase of 93% from $16.5 million in the fourth quarter of 2023. Growth margin was 8.6% in the fourth quarter of 2024, unchanged for the fourth quarter of 2023. This reflects the positive impact of higher ancillary and fee revenue, offset by the significantly higher percentage of revenue generated by agents who had reached their annual commission cap.
Michelle: With respect to the first quarter of 2025, we expect revenue to decline sequentially compared to the fourth quarter of 2024.
Michelle: Which is consistent with the seasonality in the existing home sales market.
Michelle: Gross profit for the fourth quarter of 2024, it was $30 million, an increase of 93% from $15 5 million in the fourth quarter of 2023.
Michelle: Gross margin was eight 6% in the fourth quarter of 'twenty 'twenty four.
Michelle: Change for the fourth quarter of 2023.
Michelle: This reflects the positive impact of higher ancillary and fee revenue offset by the significantly higher percentage of revenue generated by agents, who had reached their annual commission cap.
Michelle Ressler: As a reminder, cost of sales includes stock-based compensation tied to our Agent Stock Purchase Program, where agents can elect to receive part of their commissions in real stocks. This amount, totaled $8.8 million for the quarter, is included in the stock-based compensation line in our adjusted EBITDA reconciliation. As we've noted in the past, there can be fluctuations in our quarterly growth margin rate, resulting from the mix of revenue generated by agents who have capped. Historically, fewer agents reached this cap during the first quarter, with the number increasing during the year. Based on our current outlook, we expect gross margin in the first quarter to be in the mid-9% range with the variance versus 2024 driven primarily by the mix of capped agents.
Michelle: As a reminder cost of sales includes stock based compensation tied to our agents that purchase program, where agents can elect to receive part of their conditions and real stock.
Michelle: This amount totaled $8 8 million for the quarter is included in the stock based compensation line and our adjusted EBIDTA reconciliation.
Michelle: As I noted in the past there can be fluctuations in our quarterly gross margin rate, resulting from the mix of revenue generated by agency. That's cats historically fewer agents reached this cap during the first quarter with the number increasing during the year.
Michelle: Based on our current outlook.
Michelle: That gross margin in the first quarter to be in the mid 9% range with the variance versus 'twenty 'twenty four driven primarily by mix of captive agents, although with that said we remain focused on driving gross margin improvement, particularly other ancillary business lines continue to scale.
Michelle Ressler: Although with that said, we remain focused on driving gross margin improvement, particularly as our ancillary business lines continue to scale.
Michelle Ressler: Moving to OPEX. Total operating expenses, which include general and administrative, marketing and R&D expenses, were $36.4 million, or 10.4% of revenue in the fourth quarter of 2024, compared to $26.8 million, or 14.8% of revenue during the fourth quarter of 2023. Revenue share expense, which is included in marketing was $9.5 million in the fourth quarter of 2024, a 39% increase from $6.8 million in the fourth quarter of 2023. As a percentage of revenue, revenue share declined to 2.7% in the fourth quarter of 2024, from 3.8% in the fourth quarter of 2023, in part due to revenue share model changes we implemented last year, as well as the higher mix of revenue from agents who reached their commission cap.
Michelle: Well go to Opex total operating expenses, which include general and administrative marketing and R&D expenses were $36 4 million or calculate what percent of revenue in the fourth quarter of 2024 compared to $26 8 million or 14, 8% of revenue during the fourth quarter of 2020 three.
Michelle: Revenue share expense, which is included in marketing was $9 5 million in the fourth quarter of 'twenty 'twenty, 439% increase from $6 8 million in the fourth quarter of 2023.
Michelle: As a percentage of revenue revenue share declined to two 7% in the fourth quarter of 'twenty 'twenty, four and three 8% in the fourth quarter of 2023 and part due to a revenue share model changes, we implemented last year as well as the higher mix of revenue from agents, who reach their commission cats.
Michelle Ressler: Note that Revenue Share Expense is entirely variable and reflects the portion of Reals Commission split that is paid to agents who attract new agents to the brokerage.
Michelle: Note that revenue share expenses entirely variable and reflects the portion of Royal Commission split that is paid to agents to attract new agents to the brokerage.
Michelle Ressler: Adjusted operating expense, which is a non-GAAP metric, totaled $20 million in the fourth quarter of 2024, an increase of 78% compared to $11.2 million in the fourth quarter of 2023. This uptick reflects increased headcount as well as a step up in professional fees, in part related to our transition to U.S. GAAP. As a percentage of revenue, adjusted operating expense was 5.7%, an improvement from 6.2% in the prior year. Adjusted operating expense reflects total operating expense, less revenue share, stock-based compensation, depreciation, and other unique or non-cash expenses. This metric is designed to help investors assess the impact of our fixed ongoing cash operating expenses within our overall cost structure.
Michelle: Adjusted operating expense, which is a non-GAAP metric totaled $20 million in the fourth quarter of 2024, an increase of 78% compared to $11 2 million in the fourth quarter of 2023. This uptick reflects increased headcount as well as the step up in the professional fee is in part related to our transition to U S.
Michelle: Cap.
Michelle: As a percentage of revenue adjusted operating expense was five 7% an improvement from six 2% in the prior year.
Michelle: Adjusted operating expense reflects total operating expense less revenue share stock based compensation depreciation and other unique or noncash expenses.
Michelle: This metric is designed to help investors assess the impact of our fixed ongoing cash operating expenses within our overall cost structure.
Michelle Ressler: Our focus remains on driving gross profit growth at a faster pace than operating expenses. Operating loss was $6.4 million in the fourth quarter of 2024 compared to an operating loss of $11.3 million in the fourth quarter of 2023. While net loss attributable to the owners of the company was $6.6 million in the fourth quarter of 2024 compared to a net loss of $12 million in the fourth quarter of 2023. Adjusted EBITDA improved to $9.1 million in the fourth quarter of 2024, a $600,000 increase from $8.5 million in the fourth quarter of 2023. Excluding the impact of a non-recurring balance sheet adjustment booked in that quarter, Adjusted EBITDA improved by $6.8 million.
Michelle: Our focus remains on driving gross profit growth at a faster pace than operating expenses.
Michelle: Operating loss was $6 4 million in the fourth quarter of 2024 compared to an operating loss of $11 3 million in the fourth quarter of 'twenty three while net loss attributable to the owners of the company was $6 6 million in the fourth quarter of 2024 compared to a net loss of $12 million in the fourth quarter of 2020.
Three.
Adjusted EBITA improved to $9 1 million in the fourth quarter of 'twenty 'twenty, four or 600000 dollar increase from $8 5 million in the fourth quarter of 2023.
Michelle: Excluding the impact of a nonrecurring balance sheet adjustment booked in the quarter adjusted EBITA improved by $6 8 million. This increase was driven by our strong revenue and gross profit growth, which outpaced growth in our cash operating expenses.
Michelle Ressler: This increase was driven by our strong revenue and gross profit growth, which outpaced growth in our cash operating expenses.
Michelle Ressler: Turning to our balance sheet and cash flow, we ended the quarter with unrestricted cash and investments of approximately $32.8 million compared to $32 million at the end of the third quarter of 2024. We believe we are well capitalized with no debt and ample liquidity to fund our continued growth while continuing to return capital to shareholders. As always, we will continue to diligently manage costs and allocate capital effectively, always with a focus on long-term shareholder value creation.
Michelle: Turning to our balance sheet and cash flow.
Michelle: We ended the quarter with unrestricted cash and investments of approximately $32 8 million compared to 32 million at the end of the third quarter of 2024.
Michelle: We believe we are well capitalized with no debt and ample liquidity to fund our continued growth while continuing to return capital to shareholders.
Michelle: As always we will continue to diligently manage costs and allocate capital effectively.
Michelle: It is with a focus on long term shareholder value creation.
Michelle Ressler: To close, I'll recap a few KPIs we are commonly asked about. The total value of homes transacted over our platform increased to $14.6 billion in the fourth quarter of 2024, a 115% year over year increase. The median sale price of properties sold by our agents was $380,000 in the fourth quarter of 2024, which represents a 7% year-over-year increase. Adjusted operating expense per transaction was $565 and declined 11% year-over-year from $632.
Michelle: To close I'll recap a few kpis, we are commonly asked about.
Michelle: The total value of homes transacted over our platform increased to $14 6 billion in the fourth quarter of 'twenty 'twenty four at a 115% year over year increase.
Michelle: The median sales price of properties sold by our agents was 380000 in the fourth quarter of 'twenty, 'twenty, four which represents a 7% year over year increase.
Michelle: Adjusted operating expense per transaction was 565 and declined 11% year over year from 632.
Michelle Ressler: A testament to the efficiencies enabled by our technology platform. As of the end of the fourth quarter of 2024, 12.3% of agents had exceeded their annual commission cap, up from 10.3% at the end of the fourth quarter of 2023. Canada accounted for 10% of commission revenue in the fourth quarter of 2024, compared to 18% in the fourth quarter of 2023. Our headcount efficiency ratio, which we define as full-time employees, excluding one real title and one real mortgage employees, divided by the number of agents on our platform, was 1 to 136 at the end of the fourth quarter, a significant improvement from 1 to 116 at the end of the fourth quarter of 2023.
Michelle: It's meant to the efficiencies enabled by our technology platforms.
Michelle: As of the end of the fourth quarter of 2024 at 12, 2% of agents had exceeded their annual commission cap up from 10, 3% at the end of the fourth quarter of 2023.
Michelle: Canada accounted for 10% of commission revenue in the fourth quarter of 2024 compared to 18% in the fourth quarter of 2023.
Michelle: Our head count efficiency ratio, which we define as full time employees, excluding one real title in one real mortgage employees divided by the number of agents on our platform was one to 136 at the end of the fourth quarter, a significant improvement from one to 116 at the end of the fourth quarter of 2023 the modest.
Michelle Ressler: The modest sequential decline from 1 to 140 at the end of the third quarter 2024 reflects the headcount additions across the organization to support our growth in 2025.
Michelle: Quench will decline from one to 140 at the end of the third quarter 2024 reflects the head count additions across the organization to support our growth in 2020 five.
Michelle Ressler: More details on our results and key operating metrics can be found in the earnings press release and investor presentation that accompanied this call.
Michelle: More details on our results and key operating metrics can be found in the earnings press release and Investor presentation that accompany this call.
Tamir Poleg: I will now turn it back to Tamir. Thank you, Michelle.
Tamara: I will now I'll turn it back to Tamara.
Tamara: Thank you Michelle.
Tamir Poleg: As we conclude today's call, I want to step back and reemphasize why we do what we do. Real was founded on a simple belief that real estate agents have historically paid too much money for too little value. We remain convinced that this industry can, and should, do better for the professionals who drive it forward. We believe that the traditional brokerage model is becoming less relevant as the industry evolves. High cost, redundant overhead, and outdated business practices are giving way to more agile, technology-driven solutions. With each passing day, the need for a more efficient, modern approach becomes clearer.
Speaker Change: As we conclude today's call I want to step back and reemphasize why we do what we do.
Speaker Change: <unk> was founded on a simple belief that real estate agents have historically paid too much money for too little value.
Speaker Change: We remain convinced that this industry can and should do better for the professionals who drive it forward.
Speaker Change: We believe that the traditional brokerage model is becoming less relevant as the industry evolves high cost redundant overhead and outdated business practices are giving way to more agile technology driven solutions with each passing day.
Speaker Change: The need for a more efficient modern approach becomes clearer.
Tamir Poleg: We believe that real estate transactions should be seamless, transparent, and powered by technology. The homebuyers and sellers of tomorrow will not tolerate clunky, fragmented processes. They will expect real-time, AI-driven insights, instant access to financing, and a fully digitized closing experience.
Speaker Change: We believe that real estate transactions should be seamless transparent and powered by technology the.
Speaker Change: The home buyers and sellers of tomorrow will not tolerate clunky fragmented processes. They will expect real time, AI driven insights instant access to financing and a fully digitized clothing experience that is why we are building real into an ecosystem for agent businesses not just the brokerage.
Tamir Poleg: That is why we are building Real into an ecosystem for Asian businesses, not just the brokerage. We believe in being relentless about efficiency. Legacy brokerages rely on physical office space and manual processes. We rely on software, technology, and automation. We will continue to push the boundaries of what a lean, high-performance brokerage can achieve. We believe that real estate agents should have access to more ways to build wealth. That is why we have designed one of the most generous revenue share models and agent equity incentive plans in the industry. It's why we created RealWallet and why we will continue to introduce new opportunities for agents to earn more income and achieve financial independence.
Speaker Change: We believe in being relentless about efficiency legacy brokerages rely on physical office space and manual processes, we rely on software technology and automation, we will continue to push the boundaries of what a lean high performance brokerage can achieve.
Speaker Change: We believe that real estate agents should have access to more ways to build wealth that is why we have designed one of the most generous revenue share models and agent equity incentive plans in the industry.
Speaker Change: It's why we created real wallet and why we will continue to introduce new opportunities for agents to earn more income and achieve financial independence.
Tamir Poleg: We believe that a small, focused team of talented people working toward a shared goal can outperform even the largest organizations with deep pockets that lack focus. We believe speed, innovation, and execution from such a deeply committed team will always outmatch sheer size.
Speaker Change: We believe that a small focused team of talented people working toward a shared goal can outperform even the largest organizations with deep pockets that lack focus we believe speed innovation and execution from such a deeply committed team will always outmatched sheer size we.
Tamir Poleg: We believe in working hard and being kind. We are operating in a highly competitive industry, but we don't measure success by comparison. We measure it by the value we deliver to our agents every single day. We will take big swings, we will make mistakes, and we will learn from them. But what we will never do is lose sight of who we serve, our agents and their clients. If we stay focused on delivering for them, then success for our shareholders will be inevitable.
Speaker Change: We believe in working hard and being kind, we are operating in a highly competitive industry, but we don't measure success by comparison, we measure it by the value we deliver to our agents every single day.
Speaker Change: We will take big swings, we will make mistakes and we will learn from them, but what we will never do is loose sight of who we serve our agents and their clients. If we stay focused on delivering for them than success for our shareholders will be inevitable.
Tamir Poleg: I want to close by expressing my deepest gratitude to our agents, employees, and partners. Your commitment, resilience, and belief in our vision have been the driving force behind our success. In earmarked by macro uncertainty and ever-evolving industry landscape, we have thrived.
Speaker Change: I want to close by expressing my deepest gratitude to our agents employees and partners your commitment resilience.
Speaker Change: And belief in our vision has been the driving force behind our success.
Speaker Change: In a year marked by macro uncertainty in an ever evolving industry landscape, we have thrived.
Tamir Poleg: This is only the beginning. The best is yet to come.
Speaker Change: This is only the beginning the best is yet to come.
Operator: Now, let's move to the Q&A session. Certainly. Everyone at this time will be conducting a question and answer session. If you have any questions or comments, please press star 1 on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press star 1 on your phone.
Speaker Change: Now, let's move to the Q&A session.
Speaker Change: Certainly everyone. At this time, we'll be conducting a question and answer session. If you have any questions or comments. Please press star one on your phone at this time.
Speaker Change: We do ask that we're posing your question. Please pick up your handset if you're listening on speaker phone to provide optimum sound quality.
Speaker Change: Once again, if you have any questions or comments. Please press star one on your phone.
Darren Aftahi: Your first question is coming from Darren Aftahi from Roth Capital Partners. Your line is live. Yeah, good morning. Thanks for taking my questions. And nice job on the on the quarter. I guess that pertains to kind of seasonal trends. In 4Q obviously, there's Historically, a dip sequentially, but your business in the fourth quarter didn't really see too much of a dip. So I'm just curious if there's anything underlying that's anomalistic in the fourth quarter that you saw? Or you're just winning more market share and that's flowing through into your business?
Speaker Change: Your first question is coming from Darren <unk> from Roth Capital Partners. Your line is live.
Darren Roth: Yeah. Good morning, Thanks for taking my questions and nice job on the quarter.
I guess that pertains to kind of seasonal trends in <unk>, obviously, there's.
Darren Roth: Historically, a dip sequentially.
Darren Roth: But your business in the fourth quarter didn't really see too much of a dip. So I'm just curious if there's anything underlying that's anomalistic in in the fourth quarter that you saw or.
Darren Roth: Winning more market share and that's flowing through into your business.
Tamir Poleg: Hi there and thank you. Yeah, I think that... We're very attributed to the strong growth and the fact that we're taking market share.
Speaker Change: Hi, Dan. Thank you Yeah, I think that it's attributed to the strong growth and the fact that we're taking market share I think that we I mean overall in the industry were surprised by the performance of the market, especially in December.
Tamir Poleg: I think that we, I mean, overall in the industry, we're surprised by the performance of the market, especially in December. So I think it was a combination of our strong growth, our ability to attract more agents and take market share, and also some servable market conditions, especially towards the end of the quarter.
Speaker Change: So I think if it was a combination of our strong grows our ability to attract more agents and take market share and also some sort of a bull market conditions, especially towards the end of the quarter.
Tamir Poleg: Great, and then just one more, as you look to 2025, just can you talk about areas where, I know in past quarters you talked about investing in some financial compliance stuff as well as some data science areas, like how impactful is that going to be, one, and then as you think about strategic initiatives and your hiring of Nancy, just about the ancillary business and really what needs to happen there in order for that to kind of truly scale up? Sure.
Speaker Change: Great and then just one more as you look to.
Speaker Change: Our 2025, just can you talk about areas, where I know in past quarters, you've talked about investing.
Speaker Change: In some financial compliance stuff as well some some data science areas like how impactful is that going to be one and then as you think about strategic initiatives.
Speaker Change: And you're hiring them.
Speaker Change: Nancy just about the ancillary business and really what needs to happen there in order for that to truly scale up.
Tamir Poleg: I can talk about the ancillary services. Michelle can probably discuss the investment in things. So yeah, Nancy joined us a couple of months ago, with demonstrated experience in scaling title companies and attach rates in title forward at Redfin. Again, both title and mortgage grew very significantly in 2024. We thought that they can grow even faster. Mortgage grew more than 200%. Title grew about 60% year over year. We believe that Nancy will do a great job at attaching titling in the states where 1RealTitle is operating. Just to give you a little bit of sense, our attach rates on mortgage at the moment in states where mortgage is available is around 1%.
Speaker Change: Sure I can talk about the ancillary services, Michelle can probably discussed our investment in <unk> and <unk>.
Speaker Change: Structural.
Nancy Marsden: Things so yeah, Nancy joined US a couple of months ago with demonstrated experience in scaling title companies and attach rates are in titled forward at Redfin.
Speaker Change: Again, both title and mortgage grew very significantly in 'twenty 'twenty four we thought that they can grow even faster.
Speaker Change: Faster our mortgage grew more than 200% title grew about 60% year over year, we believed that Nancy will do a great job at attaching title in the states, where one really tied to lease operating just to give you a little bit of offense, our attach rates on mortgage at the moment in states where mortgages available.
Speaker Change: It was around 1% on a tie to the attach rates are roughly 4% if were talking about how the JV is done the most successful JV, we're experiencing attach rates of about 90% nine zero and on average it's more around 30% attach rates on JV, which we think should be improved.
Tamir Poleg: On title, the attach rates are roughly 4%. If we're talking about title JVs, then the most successful JVs were experiencing attach rates of about 90%. On average, it's more around 30% attach rates on JVs, which we think should be improved. I think that Nancy has a lot of work to do when it comes to level of service. bringing the right talent into the company and scaling it. But we're very confident that you will see significant improvement this year compared to 2024. And also, that's coupled with a few product initiatives that we're rolling out that will just provide kind of a perfect alignment between the consumer, the agent and the company.
Speaker Change: I think with Nancy has a lot of work to do when it comes to a level of service and just.
Speaker Change: Bringing the right talents are into into the company and scaling it but we're very confident that you will see significant improvement this year compared to 2024.
Speaker Change: And also that's coupled with a few product initiatives that we're rolling out that will just.
Speaker Change: Kind of a perfect alignment between the consumer or the agent and the company to just drive attach rates and I think we talked a little bit about that in the past, but we can elaborate a little bit later.
Tamir Poleg: to just drive the tax rates. And I think we talked a little bit about that in the past, but we can elaborate a little bit later.
Michelle Ressler: Hi Darren, good to hear from you. So, you know, regarding our investments this year, it is another investment year. Sharran did mention in his section some areas and operations where we'll be investing in agent experience, training, support. We have continuous investment in our products, so there will be increases in R&D and we're continuing to grow our compliance based functions. So we can definitely, you know, see a small fixed OPEX base growing in 2025. We'll continue to be thoughtful and we'll always endeavor to grow our gross profit faster than our OPEX.
Speaker Change: And then I'll, let you hear from you.
Speaker Change: Well you know regarding our investments in theory. It is another investment year. Sharon you had mentioned in his section and areas in operations, where we'll be investing in agent experience training support we have.
Speaker Change: Continuous investment in our products. So there will be increases in R&D and you know, we're continuing to grow our compliance based functions.
Speaker Change: Until we can definitely see a small fixed opex base, calling in 2020 five we'll continue to be thoughtful and well always endeavor to grow gross profit faster than our opex.
Michelle Ressler: Thank you.
Speaker Change: Thank you.
Speaker Change: Thank you. Your next question is coming from Stephen Sheldon from William Blair. Your line is live.
Stephen Sheldon: Your next question is coming from Stephen Sheldon from William Blair. Your line is live. Hey, thanks for taking my questions and nice work in the quarter. Maybe starting with Sharran, seems like you're tracking for about 1000 agents added per month in the first couple months of the year, which is really good to see. So I'm curious what you're seeing in the agent team and independent brokerage recruiting pipeline as we think about the next couple quarters. And specifically, does it seem like the momentum to start the year could continue given what you're seeing in that pipeline?
Stephen Sheldon: Hey, Thanks for taking my questions and nice work on the quarter.
Speaker Change: Maybe starting with Sharon it seems like you're tracking for about 1000 agents added per month in the first couple months of the year, which is really good to see.
Speaker Change: So I'm curious what you're seeing in the agent team and independent brokerage recruiting pipeline as we think about the next couple of quarters and specifically does it seem like the momentum to start the year could continue given what youre seeing in that pipeline.
Speaker Change: Yeah. Good morning, John Thank you so much for this to be not so yes, we are tracking a similar growth and so we not only have we done this thousand agents a month roughly for the last two but I think if you average out the last kind of 12 14 months, it's been very close to that the what you know to me it always likes to call.
Sharran Srivatsaa: Yes, we are tracking similar growth. Not only have we done this thousand agents a month roughly for the last two, but I think if you average out the last 12-14 months, it's been very close to that. What Tamir always likes to call the flywheel, the flywheel is important for us to think about because the model as a whole, when you have more agents at scale, more agents are talking about real and the revenue share model helps folks get the model discoverability and have the conversation more. We're having more conversations from a pipeline perspective because we have more agents out there.
Speaker Change: The flywheel the flywheel is important for us to think about it because the model as a whole when you have more agents at scale a more agents are talking about we all at our kind of a revenue share model helps folks kind of get the model. This capability and have the conversation we were having more conversations about by my perspective, because we have more agents out there one.
Sharran Srivatsaa: One, being at real, having transactions with other agents. Two, being at real, call it with private label or with teams joining that are then saying, hey, I just made this move. Our pipeline is the largest it's ever been. However, I do want to underscore one thing. It takes longer for teams and independent brokerages to make the move.
Speaker Change: Being at we all having transactions with other agents to being at Royal Gold with private label or what teams joining better than saying, Hey, I. Just made this move so our pipeline is the largest it's ever been however, I do want to underscore one thing it takes longer for teams and independent brokerages to make the move so even though we are talking to more <unk>.
Stephen Sheldon: Even though we are talking to more agents, more teams and brokerages today, moving a large operation as you can imagine is a little complex. One, we're super excited about the size of the pipeline overall. Two, we believe that this momentum, we're excited and hopeful that this momentum will continue, but I just want to caveat that larger teams and organizations take a little bit. got it. Yeah, that makes a lot of sense.
Speaker Change: A more teams in brokerage it today the moving a large operation as you can imagine is a little complex. So one we're super excited about the size of the pipeline overall too. We believe that this momentum we're excited and hopeful that this matter will continue but I just want to caveat that larger teams and organizations take a little bit to move.
Speaker Change: Got it yeah that makes a lot of sense and then I guess can you give a little bit.
Stephen Sheldon: And then, you know, I guess you gave a little bit, I want to dig in a little bit more on mortgage in particular. You know, how is the team thinking about, you know, how aggressively you might grow that loan officer headcount to both cover more states across the U.S. I think you have a good slide in your presentation showing where you are right now, and then to add capacity in existing states.
Speaker Change: Wanted to dig in a little bit more on mortgage in particular.
Speaker Change: You know how is the team thinking about how aggressively you might grow that loan officer head count to both cover more states across the U S. I think you have a good squad in Europe in your presentation, showing where you are right now and then to add capacity in existing states and and just generally how do you think about better aligning loan officers and real.
Sharran Srivatsaa: And just generally, how do you think about better aligning loan officers and real agents to support those attachments? Yeah, so we ended the year with about 90 loan officers at Real Mortgage, 1 Real Mortgage. started in 2024 with 18, I believe. So obviously, we're adding more loan officers, and some of them are coming with a book of business. About half of the new additions are real agents who got licensed as loan officers just to maximize their earnings. So obviously, that will drive attach rates.
Speaker Change: <unk> agents.
Speaker Change: Support those attach rates.
Speaker Change: Yeah. So we ended the year with about 90 loan officers.
Speaker Change: The mortgage one real mortgage we started 2024 with 18 I believe so obviously, we're adding more loan out loan officers and some of them are coming with a book of business about half of the new additions are real agents, who got licensed as loan officers just to maximize their their earnings. So obviously that will drive attach rates.
Sharran Srivatsaa: I'm a big believer in productizing things. So we came up with a couple of initiatives. You must remember the touring agreements that we rolled out because of the NAR changes. So in those touring agreements, we are offering an incentive to buyers that will use one-wheel mortgage with the help of our agents. And we provide them or offer them a credit of $2,500 at closing, and we're starting to see that kicking in. So a lot of transactions are coming through that. And then, as I mentioned, we are opening up an API open to all mortgage companies and title companies.
Speaker Change: I'm, a big believer in and prioritizing things. So we came up with a couple of our initiatives you must remember the AR the touring agreements that we rolled out because of the law changes. So in those touring agreements we are offering incentives to buyers that would use one of your mortgage with the help of our agents and are we.
Speaker Change: Provide them or offer them a credit of $2500, that's closing and we're starting to see that kicking in so a lot of transactions are coming through that and then as I am.
Speaker Change: Mentioned, we are opening up an API I'm open to old mortgage companies and title companies and obviously it will be used by one with mortgage and one one Ricardo and that API will help lenders and title companies send the signals or information about how their transactions with our agents are progressing and that will allow us to pay our age.
Sharran Srivatsaa: And obviously, it will be used by one-wheel mortgage and one-wheel title. And that API will help lenders and title companies send us signals or information about how their transactions with our agents are progressing, and that will allow us. Pay Our Agents commission advances well ahead of closing, so I think that this is a perfect example where we can actually create some sort of an incentive for agents to use. Obviously, any lender that or any title company that will use this API, we will use it for sure.
Speaker Change: Commission advances so well ahead of closing so I think that this is a perfect example, where we can actually creates some sort of incentive for agents to use.
Speaker Change: Obviously, any lender that or any type of company that will use. This API, we will use it for sure, but I think that that will be rolled out in about a month and a half and AR and that can dramatically help attach rates on our side. So again, it's it's a multitude of initiatives from.
Sharran Srivatsaa: But I think that that will be rolled out in about a month and a half, and that can dramatically help attach rates on our side. So again, it's a multitude of initiatives from allowing agents to become licensed as loan officers to also implementing some sort of a revenue share model within One Real Mortgage. So loan officers can attract their friends and then earn revenue share out of their production as well. And then everything that we're doing on the product, there are a lot of things that are starting to scale and we're seeing great momentum. And as I said, we're super optimistic about those two companies for 2025.
Speaker Change: Boeing agents to become licensed as loan officers to also implementing some sort of a revenue share model within one of your mortgage so loan officers can attract their friends and then earn revenue share out of their production as well and then everything that we're doing on the product a lot of things that are starting to scale and we're seeing great moment.
Speaker Change: Hum.
Speaker Change: I said, we're super optimistic about those two companies for 2025.
Stephen Sheldon: Good to hear.
Operator: Thank you. Once again, everyone, if you have any questions or comments, please press star then one on your phone.
Speaker Change: Good to hear thank you.
Speaker Change: Thank you once again, everyone. If you have any questions or comments. Please press Star then one on your phone. Your next question is coming from Matthew Earner from Jones trading your line is live.
Matthew Erdner: Your next question is coming from Matthew Erdner from Jones Trading. Your line is live. Hey, good morning, guys. Congrats on another great quarter. And thanks for taking the question.
Matthew Earner: Hey, good morning, guys. Congrats on another great quarter and thanks for taking the question I wanted to turn to the real wallet. Thanks for the kind of guidance there the 500 K run rate.
Matthew Erdner: I want to turn to the real wallet. Thanks for the kind of guidance there, the 500k run rate. You know, what are you seeing there margin wise?
Matthew Earner: You know what are you seeing there margin wise and then in terms of adoption I believe you said 2500 agents. There you know how do you get from that from that 25 to 5000, and then eventually scale it across the business.
Tamir Poleg: And then in terms of adoption, I believe you said 2500 agents there, you know, how do you get from that next or from that 25 to 5000 and then you know, eventually scale it across the business? Thanks, Matt.
Matthew Earner: Thanks, Matt So we soft launched wallet at the end of our October 2024. So we're about four months in we haven't really pushed it hard and a lot of the features that our plan for the walls are still not available. So just as a recap we do have checking it.
Tamir Poleg: So we soft launched the wallet at the end of October 2024. So we're about four months in. We haven't really pushed it hard. And a lot of the features that are planned for the wallet are still not available. And so just as a recap, we do have checking accounts and debit cards in the U.S., and we have lines of credit in Canada. We don't have checking accounts and debit cards in Canada at the moment. But we are starting to push wallets very heavily, and very soon we will have a variation of credit lines in the U.S.
Matthew Earner: House and debit cards in the U S and we have lines of credits in Canada, We don't have checking accounts and debit.
Matthew Earner: Debit cards in Canada at the moment, but we are starting to push was very heavily and very soon we will have a variation of credit lines in the U S. Though at the moment, we have roughly $7 million in agent deposits. We are about to rollout tax accounts for agents, meaning that agents could allocate a portion of their rent.
Tamir Poleg: So at the moment, we have roughly $7 million in agent deposits. We are about to roll out tax accounts. We're extremely pleased with everything that we've seen on the wallet side. There's a lot of excitement amongst the agents. We haven't started marketing it heavily, but going from 2,500 agents to 5,000 agents, I think that that will happen in the next couple of months.
Matthew Earner: No.
Matthew Earner: Put into a separate account and just sitting there waiting for for the tax season to arrive.
Speaker Change: And obviously as we continue to scale their lines of credit and open them up in the U S. We will see more revenue. So we're extremely pleased with everything that we've seen on the wireless side, there's a lot of excitement amongst the agents, we haven't started marketing it.
Speaker Change: Heavily but going from 2500 agents to 5000 agents I think that that will happen in the Mexico plus a month. In addition to that we are in the process of hiring a general manager for the wallet up to now it has been it has been managed by profession, Alex Our general counsel and myself and now we're bringing in the resources.
Michelle Ressler: In addition to that, we are in the process of hiring a general manager for the wallet. Up to now, it has been managed by Pritesh and Alex, our general counsel, and myself, and now we're bringing in the resources to actually take this baby to the next level. Again, I think that we're seeing encouraging signs. Revenue is coming in, and this has been the smoothest and probably fastest rollout of any product we have launched. Yeah, that's...
Speaker Change: To actually take this baby to the next next level. So again I think that we're seeing encouraging signs revenue is coming in.
Speaker Change: And and this has been the smoothest I'm, probably fastest rollout of any product we've ever launched.
Speaker Change: Yeah, that's that's it I'm.
Michelle Ressler: Sorry, on the on the margin question, it's a 90 it's around the 90% gross margin business. And to just further substantiate Tamir's point, you know, wallet, while, as you mentioned, we really haven't made much of an effort in pushing it, you know, we saw over 900,000 in debit card spend in February, and it's increasing rapidly. So we're really encouraged by the early signs and super excited for where this is going. Yeah, that's great. Thanks, Tamir and Michelle for that.
I'm, sorry, I'm sorry.
Speaker Change: On the margin question, a its a 90% it's around a 90% gross margin business.
Speaker Change: And to just further substantiate to Amir's point, you know wallet, while as he mentioned, we really haven't made much of an appetite and pushing it with all over 900000 and debit card spend in February and it's increasing.
Speaker Change: Rapidly. So we're really encouraged by the early signs and Super excited for where this is going.
Speaker Change: Yeah, that's great, Thanks, Tamara and Michelle for that and then.
Michelle Ressler: And then following up kind of on the operating expense question, you know, given the increase in headcount for the growth, should we expect kind of fourth quarter to be a good run rate in terms of G&A and R&D spend as we look ahead to 25? Or should we expect a little bit of an increase there, you know, given that mortgage capacity might need to increase a little bit and then same with the wallet?
Speaker Change: Following up kind of on the operating expense question you know given the increase in head count for the growth should we expect kind of a fourth quarter to be a good run rate in terms of G&A and in R&D spend as we look out to 'twenty five or should we expect a little bit of an increase there.
Speaker Change: Given that mortgage capacity, you might need to increase a little bit and then same with the wallet.
Michelle Ressler: Michelle? Yep, sorry. We're not looking to add too much. We've made a couple additions already to the team, and you know, we're excited about the addition of Dominic, but it's not going to be a very cost heavy. and the cost of the area. OPEX overall will grow in 2025, as I mentioned earlier, but we're super focused on growing gross profit faster than OPEX and we'll continue to drive profitability. Awesome.
Speaker Change: Michelle.
Michelle: Yeah, sorry.
Speaker Change:
Speaker Change: We're not looking to add too much and we've made a couple of additions already to the team and you know we're excited about the addition of Dominic, but it's not going to be in a Oh pardon me.
Speaker Change: The area Opex overall will grow in 'twenty 'twenty five as I mentioned earlier, but.
Speaker Change: We're super focused on growing gross profit faster than Opex, and we'll continue to to drive profitability.
Operator: Thank you, guys. Thank you.
Speaker Change: Awesome. Thank you guys.
Speaker Change: Uh-huh.
Operator: There are no further questions in the queue. Great.
Speaker Change: Thank you there are no further questions in the queue.
Operator: Well, now that we've concluded the analyst portion of the call, we'll address some of the questions received from shareholders on the Say Technologies Q&A portal that was opened last week. We received a number of excellent questions, and so thank you to all who participated.
Speaker Change: Great well now that we've concluded the analyst portion of the call will address the questions received from shareholders on the Sei technologies Q&A portal that was opened last week.
We received a number of excellent questions and so thank you to all who participated.
Tamir Poleg: Tamir, first question for you. Can you help us understand the unit economics of a title and mortgage transaction? And I think you addressed it earlier on some of the benefits of a real agent working with title and mortgage, but maybe spend some time with just the unit economics to real.
Speaker Change: And your first question for you can you help us understand the unit economics of a title and mortgage transaction and I think you addressed it earlier in some of the benefits of a real agent working with title and mortgage but maybe spend some time with just the unit economics to real.
Tamir Poleg: Sure. So we're very focused on growing the attachment of our ancillary services because of the unit economics that are very compelling. To put it in perspective, on a traditional brokerage transaction, we generate around $10,000 in revenue and about $900 in gross profit. In comparison, a title transaction typically generates $3,000 in revenue at an 80% gross margin, while a mortgage transaction generates roughly $6,000 in revenue at 50% gross margin. And when you add it all up... and Tidal. The total revenue for a brokerage transaction includes both title and mortgage alongside a brokerage transaction. It results in total revenue of nearly $19,000 with gross profit exceeding $6,000.
Speaker Change: Sure. So we're very focused on growing the attachment of our ancillary services because of the unit economics that are very compelling to put it in perspective on a traditional brokerage transaction, we generated around $10000 in revenue and about $900 in gross profit in comparison titled transaction moves.
Speaker Change: Typically typically generate $3000 in revenue and an 80% gross margin, while our mortgage transaction generates roughly $6000 in revenue.
Speaker Change: 50% gross margin.
Speaker Change: When you add it all up with transactions that include both title and mortgage alongside a brokerage transaction resulted in total revenue of nearly $19000 with gross profit exceeding $6000. So about seven times. The gross profit of a brokerage only transaction. So at the end of the day. Our goal is to provide agents with a seamless efficient and <unk>.
Tamir Poleg: So about seven times the gross profit of a brokerage only transaction.
Tamir Poleg: So at the end of the day, our goal is to provide agents with a seamless, efficient and high quality closing experience that helps them close more deals and grow their business. But obviously, as you look at the numbers, if we're able to attach mortgage and title, the margin profile of a transaction complete.
Speaker Change: High quality clothing experience that helps them close more deals and grow their business, but obviously.
Speaker Change: As you look at the numbers, if we're able to attach mortgage and title just.
Speaker Change: The margin profile of a transaction completely changes.
Michelle Ressler: Great. Next question for Michelle. Amongst the teams that have already formed a title and mortgage JV, what is the attachment rate for title or mortgage?
Speaker Change: Right now next question for Michele amongst the teams that have already formed a title and mortgage JV. What is the attachment rate for title mortgage and is there a plan to start disclosing more detail about title and mortgage title and mortgage segments to investors.
Michelle Ressler: And is there a plan to start disclosing more detail about the title and mortgage segments to investors? Yeah, great question. So, just to clarify, our joint ventures are only available for title. They're not available for mortgage. What we've seen is that the attachment rates vary significantly. Our most successful title JVs are seeing attachment rates of over 80%, in some cases approaching 90%. And, you know, there are others that are in the 30% range. So, it's, you know, that's still a meaningful share. We're highly encouraged by the potential, especially with the new leadership in place, and we expect to drive more consistent and meaningful attach rates over time.
Speaker Change: Yeah, Great question. So just to clarify our joint ventures are only available for title and they're not available for mortgage what we've seen is that the attachment attachment rates very significantly our most successful title, Jamie and are seeing attachment rates of over 80% in some cases approaching 90% and you know there.
Speaker Change: Others that are in the 30% range. So and you know that's still meaningful share and we're highly encouraged by the potential, especially with the new leadership in place and we expect to drive more consistent and meaningful attach rates over time.
Michelle Ressler: We are aware that it won't happen overnight. So, we're super focused on ensuring that the right processes and execution are in place so that we can support sustained growth.
Speaker Change: We are aware that it won't happen overnight. So we're super focused on ensuring that the right processes and execution plans. So that we can support sustained growth.
Michelle Ressler: As for the disclosures, I mean, we already break out our ancillary services performance in our quarterly and annual financials. We'll continue to be transparent about the trajectory of these businesses. And, you know, if you're looking for information, we just encourage you to refer to our filings or, of course, send an email to Ravi and the IR team. They're always available to offer, you know, additional insight.
Speaker Change: As for the disclosure doesn't mean, we aren't even break out our ancillary services performance in our quarterly.
Speaker Change: And annual financials will continue to be transparent about the trajectory of their businesses and you know if you're looking for information.
Speaker Change: Encourage you to refer to our filings or of course send an email to rami and the IR team are always available to offer you know additional insights.
Michelle Ressler: Great. We'll stay with Michelle.
Speaker Change: Great well stay with Michelle is management expecting them to have positive net margins in Q2 and Q3 of this year.
Michelle Ressler: Is management expecting to have positive net margins in Q2 and Q3 of this year? So we don't provide formal guidance. I think you know that. And as I mentioned earlier on the call, this is still a period of investment for the company. Having said that, our focus remains on driving improved profitability.
Speaker Change: So we don't provide formal guidance I think you know that and as I mentioned earlier on the call. This is still a period of investment for the company, having said that our focus remains on driving improved profitability.
Michelle Ressler: And as we get a little bit further into the year, we can revisit the discussion.
Speaker Change: And you know as we get a limit for any of them sitting here, we can revisit the discussion.
Sharran Srivatsaa: Great. Last question for Sharran. There were a couple of questions about perks and benefits offered by others and whether Real has plans to increase the benefits offered to agencies. Yeah, thank you, Ravi. And the, the answer is yes, we are always building new benefits for agents. But this is a really important question.
Speaker Change: Great last question for Sharon there were a couple of questions about perks and benefits offered by others and whether real has plans to increase the benefits offered to agents.
Speaker Change: Yeah, Thank you Ravi and.
Speaker Change: The answer is yes, we are always building new benefits for agents, but this is a really important question. So I want to spend just a kind of a quick minute explaining.
Sharran Srivatsaa: So I want to spend just a kind of a quick minute explaining some behind-closed-doors conversations that most people don't really hear. It's really important to note that the model is the incentive. That is the platform of the future. And we keep innovating to build on the model to help all our agents. I'll give you some context. I actually ran a traditional business, traditional brokerage model in the past. So I understand this firsthand, because lots of companies feel like it's, it helps to just throw more unrelated benefits at the agents to just make a list. But that doesn't really actually help our agents do what they need to do.
Speaker Change: Some behind closed doors conversation said most people don't really here, it's really important to note that the model is the incentives that is the platform of the future and we keep innovating to build on the model to help all our agents.
Speaker Change: Give you some context I actually ran a traditional business traditional brokerage model in the past so I understand this firsthand because lots of companies feel like it's it helps to just throw more unrelated benefited the agents to just make a list, but that doesn't really actually help our agents do what they need to do that you'll see that this is kind of why many companies have to go up.
Sharran Srivatsaa: You'll see that this is kind of why many companies have to go outside their core model to offer major incentives for agents to attract and join them when we don't have to. Meaning, our model is the incentive. And our focus is always going to be on creating what I really like to call a platform of possibilities for our agents. How do we build things structurally, what an agent cannot build for themselves at scale? That is a platform of possibilities, right? So RevenueShare, which is one of the most lucrative and transparent in our industry, take equity incentives to gain ownership in the company that they build and grow.
Speaker Change: Outside their core model to offer major incentives for agents.
Speaker Change: Rock didn't join them when we don't have to meaning our model is the incentive and our focus is always going to be on creating what I really like to call a platform of possibilities for our agents.
Speaker Change: How do we build things structurally what eight what an agent cannot build for themselves at scale that is a platform of possibilities right. So revenue shared which is one of the most lucrative and transparent in our industries take equity incentives to gain ownership in the company that they build and grow a deep technology infrastructure like AI systems that they would have to go out and buy.
Sharran Srivatsaa: Deep technology infrastructure like AI systems that they would have to go invest in otherwise, or as Tamir and Michelle talked about the kind of wallet and financial technology products that is built into real wallets. We have world-class kind of on-demand training that they would have to deeply invest in otherwise. And we also added healthcare and retirement benefits to keep them all healthy for the long term while they serve their clients. So the answer is yes. But we are continuously focused on kind of new added benefits for our agents, but they will always be built to create a platform of possibilities for our agents.
Speaker Change: Can I invest in otherwise or estimate on Michelle talked about the kind of wallet. The financial technology products that is built to do real wallet, we have world class kind of on demand training that they would have to deeply invest and otherwise and we also added health care and retirement benefits to keep them all healthy for the long term while they serve their clients. So the the answer is yes.
Speaker Change: But we are continuously focused on kind of new added benefits for agents, but they will always be built to create a platform a possibility. So our agent because every agent's goal and every agents operating model is completely different and so it's our goal to help them build what they can't build themselves.
Sharran Srivatsaa: Because every agent's goal and every agent's operating model is completely different. And so it's our goal to help them build what they can't build themselves.
Operator: Thanks, Sharran. If there are any additional questions on today's earnings release, please feel free to contact me directly.
Speaker Change: Thanks Sharon.
Speaker Change: Is there any additional questions on today's earnings release, please feel free to contact me directly Matthew would you. Please give the conference call replay instructions once again thank you.
Operator: Matthew, would you please give the conference call replay instructions once again? Thank you.
Speaker Change: Thank you everyone. This concludes today's conference call today's conference will be available for replay.
Operator: Everyone, this concludes today's conference call. Today's conference will be available for replay. The replay phone number is 877-481-4010 and the replay code is 519-07. Once again, the replay phone number is 877-481-4010 and the replay code is 51907.
Speaker Change: The replay phone number is 8774814010 and the replay code is 51907.
Speaker Change: Once again the replay phone number is 8774814010 and the replay code is 51907.
Operator: You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.
Speaker Change: You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.