Q1 2025 The Real Brokerage Inc Earnings Call
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Speaker Change: In good morning ladies and gentlemen and welcome to the Real Brokerage First Quarter 2025 earnings call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation.
Speaker Change: I will now turn the call over to Alex Lumpkin, ma'am the floor's doors.
Speaker Change: Thanks and good morning. Thank you for standing by and welcome to the Real Brokerage Conference call and webcast for the first quarter-ended March 31, 2025. We appreciate everyone for joining us today. With me on the call today, our Tamir Poleg, our chairman and chief executive
Sharran Srivatsaa, President, and Ravi Jani are chief financial officer [inaudible]
Speaker Change: This morning, Real published an earnings press release, including results for the first quarter ended March 31, 2025.
Speaker Change: The press release, along with the un audited, consolidated financial statements and related management discussion and analysis for the quarter-endit, had been filed with the U.S. Securities and Exchange Commission on Edgar and with the Canadian Securities Regulators on Twitter.
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.
Speaker Change: 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 FEC report.
Speaker Change: Real explains any intense or obligation to update these forwardless statements, access is expressly required by law.
Speaker Change: With that, I'd like to turn the call over to Chairman and Chief Executive Officer Tamir Poleg. Tamir, please proceed.
Tamir Poleg: Good morning and thank you Alex. I will start with an overview of our strategy and recent business highlights.
Speaker Change: Sharran will provide an update on actions we are taking to drive age and growth and improve age and experience and Ravi will provide a more in-depth discussion of our financial results. I'll then provide a few closing remarks before opening up the call for Q&A.
Speaker Change: To begin, real is a real estate technology company that is differentiated in our industry.
Speaker Change: 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
Speaker Change: 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.
Speaker Change: delivering a seamless experience for clients. In the short-term, this vision includes the rollout of a consumer-facing product which streamlines the client experience and enhances the attachment of our higher-margin andcillary 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 platformatures, we believe home buyers and sellers could also benefit from the breadth of our service offering. Our goal is to redefine the role of a real estate brokerage in the lives of our agents and in the broader housing industry.
Speaker Change: Importantly, just like our institutional investors, many of our agents are also shareholders in our company That is why we will remain relentless in our focus on delivering long-term value for our agents, for their clients and for our shareholders [inaudible]
Turning to the Quarter [inaudible]
Speaker Change: This morning, real reported record first quarter results, revenue of $354 million increased 76% compared to $201 million in the prior year, driven by a 77% increase in the number of transactions closed which reached 33,600 [inaudible]
Speaker Change: This compares favorably to the 2% decline in existing home sale industry transactions during the quarter.
Speaker Change: Gross Profit, in the first quarter of 2025, was $33.9 million, an increase of 63% while net loss improved to $5.1 million from a loss of $16.1 million in the prior year.
Speaker Change: Our strong top line growth contributed to adjusted EBITDA of $8.3 million, a significant improvement from $3.6 million in the first quarter of 2024.
Speaker Change: As of this morning, our agent count exceeds 27,700, meaning we've added over 800 agents since the start of the second quarter.
Speaker Change: We continue to see strong momentum across our technology platform in high margin and salary businesses, including mortgage, title and real wallet, which grew by a combined 50% versus the prior year.
As a reminder,
Speaker Change: These business lines typically generate gross margins that are typically 5 to 8 times higher than our core brokerage segment and are central to our long-term strategy for driving margin expansion and operating leverage. That momentum is also being driven by the rapid evolution of leoco-pilot, our AI-powered agent assistant.
Speaker Change: In April , we transitioned all inbound agent support calls to Leo, making real one of the first brokerages to automate its primary support layer with AI.
Speaker Change: and continuously learns from those interactions to deliver faster, more accurate, and more personalized assistance.
Speaker Change: This represents a meaningful step forward in our vision to build a scalable, intelligent, brokerage platform that increases agent productivity while driving efficiency across our operation.
Speaker Change: Real wallet continues to show strong progress across both product development and adoption.
Tamir Poleg: This quarter, we were pleased to welcome Dominic Parik to Real as General Manager of Real Wallet. Dominic brings over a decade of experience in FinTech and lending, including prior roles at Funding Circle and BCG, and we're excited about the future of the platform under his leadership.
Tamir Poleg: We've expanded product functionality with new Apple Pay and Google Pay integrations and in March launched dedicated tax planning business checking accounts to help agents better manage their tax liabilities.
Tamir Poleg: In the US, over 3,200 agents now use real wallet business checking accounts with total deposits reaching approximately 8 million dollars, including nearly 300 agents using the new tax-focused business checking accounts.
Tamir Poleg: In Canada, we've extended over $2 million in credit to 200 agents through our production
Tamir Poleg: Real Wallet hit that same milestone in just seven months, highlighting the demand for agent line financial tools.
Tamir Poleg: In Q1 real wallet generated $126,000 in revenue, and we now estimate the annualized run rate revenue exceeds $700,000 an increase from $500,000 at the time of our last earnings call, and we expect meaningful upside as adoption and product offerings continue to expand.
Tamir Poleg: At one real title, we are executing a strategic pivot under new leadership to position the business for greater scalability.
Tamir Poleg: Rather than expanding via individual team-based joint ventures, we are now pursuing state-wide strategy, which provides more consistent operating leverage and allows us to grow more efficiently.
Tamir Poleg: We're launching our first three state-level JVs this month, with three more expected next months.
Tamir Poleg: At One Real Mortgage, we continue building an agent-aligned mortgage business. In the first quarter, we introduced a new stock-award program that enables loan officers the opportunity to earn our use and participate in real-long-term upside, similar to programs offered to our agents.
Tamir Poleg: This initiative enhances alignment across the transaction and reinforces our commitment to attracting and retaining top-performing allows who share our vision to reshape the homebuying and selling experience.
Tamir Poleg: We now have 97 loan officers over half of whom are real agents licensed to originate loans under the real-a-real program.
Delivering a more connected, transparent financing experience for clients [inaudible]
Tamir Poleg: Altogether, these initiatives reflect our continued focus on building a tech-enabled real-estate platform that supports agents at every step of the transaction and strengthens our financial profile in the process. With that, I'll turn it over to Sharran for an update on our growth in agent initiatives.
Sharran: Thank you Tamir, and good morning everyone. I'll provide an update on our brokerage business in a quick top 5 format. So let's dive in and discuss some of the key highlights and areas of focus this quarter. Number one, a sluggish market, but real agents are leaning in.
Sharran: The housing market has kicked off 2025 on a slow note with existing home sale units down about 2% year over year during the first quarter, reflecting the ongoing affordability pressures that have weighed on the market. In fact, our latest agent survey indicates a shift occurring under the surface.
Sharran: Buyers are gaining more leverage, and sellers are adjusting pricing expectations lower accordingly. Against this backdrop, Real Agents delivered a 5% year-over-year increase in average transactions per agent.
Sharran: We believe it's a clear signal that our agents are well-equipped to navigate this market with skill and focus [inaudible]
Number two [inaudible]
Speaker Change: While the industry debates, we stay focused. Now, I've been in this industry for nearly two decades, and the narrative is always shifting from lawsuits and commission rates to today's focus on exclusivity and listing access. It's important to understand that at Royal, we don't chase headlines, we stay focused on building a model that works in any market.
and number three.
Speaker Change: As a Top 10 Brokerage, we have the skill to launch a massive exclusive listing network if we believed it was in the best interest of agents and their clients.
Speaker Change: But we also know there is no one size fits all approach in real estate.
Speaker Change: Our job is to empower agents and their clients with flexibility and not force them into any single playbook. That's how we continue to grow by staying grounded in what actually helps agents succeed.
Speaker Change: So number three, continuing our growth momentum as we march towards Relax. We welcomed over 2700 net new agents in Q1, which was one of our strongest quarters ever.
Speaker Change: Importantly, our attraction pipeline remains robust, especially among a top producing teams. I'm excited to showcase the breadth of our platform next week at RealX, our annual virtual conference open to the entire industry.
Speaker Change: With thousands already registered, real access become a powerful engine for introducing agents to our model, our technology and most importantly our culture. I look forward to seeing you all there. Number four, the industry is shifting and skill is the new commission.
Speaker Change: We believe real estate remains one of the most complex transactions that consumer can face, even with an agent's guidance along the way.
Speaker Change: That's why we see the future of this industry anchored by highly skilled agents
Speaker Change: who are empowered by AI and systems, not replaced by them. But make no mistake, the skill of the agent is still the most important variable.
Speaker Change: So for context, in just the past 12 months, two foundational pillars of the real estate industry model, which are buyer agency and clear cooperation, have come under fire.
Speaker Change: On top of that, agents are navigating volatile macro-conditions evolving policies and rising interest rates.
Speaker Change: In fact, the national data now clearly shows a widening gap in per-agent sales productivity. The skill gap is real and it's growing.
Speaker Change: That's why we're doubling down on skill building with three focused delivery formats. Number one, masterclass style training through real academy This is where agents can learn new skills, new tools and capabilities on demand
Speaker Change: Number two, High Impact Regional Road Chose, where our leaders are traveling and educating in local markets. And number three, Functional Masterminds, like the $100 million roundtable, which is ultra-focused on our largest enterprise teams.
and a luxury mask mine for agents serving the high-end markets.
Speaker Change: We believe a well-trained agent operating on a world-class platform, like Real, can navigate any change in legislation or policy or market conditions and still deliver exceptional results for their clients, while real estate is getting harder, our agents are getting smarter.
5. Strengthening the Flywheel for long-term success
Speaker Change: So as I step into a new role on Real's board next month, I've never been more confident in the foundation we built. Real is now...
Speaker Change: One of the largest brokerages in North America with a leadership team, culture and platform that continue to raise the bar.
Speaker Change: In Q1 we advanced the foundation further with enhancements to Leo Copilot and Real Wallet and team-driven innovations like pro teams and private label.
Speaker Change: These aren't just features, they're part of a growing flywheel that creates long-term value for agents, clients, and shareholders alike. In short, I'm incredibly proud of our team and even more excited about what lies ahead. So to our employees and our agents, thank you.
None of this would be possible without you.
Now I'll pass it to Ravi for the financials.
Ravi: Thanks, Sharran. Replease to report another quarter of impressive performance as we continue to deliver consistent growth and improving profitability.
Ravi: Revenue in the first quarter rose to $354 million, an increase of 76% versus the first quarter of 2024.
Ravi: This was driven primarily by a 77% increase in brokerage revenue, which reached $352 million while in a salary of businesses contributed to $2.2 million in revenue of this quarter, an increase of 50% year over year.
Speaker Change: As Tamir mentioned, we generated approximately $126,000 in real wallet revenue during its first full quarter, and while still early, real wallet is gaining traction and should continue to grow sequentially as we roll out new products and features.
Speaker Change: Gross Prophet for the first quarter came in at 33.9 million, up 63% from 20.8 million in Q1 2024.
Speaker Change: Gross Margin was 9.6% consistent with our expectations and compares to 10.3% in the prior year.
Speaker Change: The year-over-year decline reflects the growing share of production from agents who have reached their annual commission cap.
Speaker Change: For context, at the end of Q1, approximately 12% of our agent-basid cast, up from 8% a year ago. These agents contributed roughly 50% of total commission revenue in the quarter compared to 40% in Q1, 2024.
Speaker Change: As a reminder, once in agent caps, they stopped paying the standard 15% split and instead pay a $285 per transaction fee, resulting in lower gross margin on those transactions.
Speaker Change: Looking ahead, we remain focused on driving gross margin expansion over time as our Ancillary Services Scale.
Speaker Change: While the shift in revenue mix toward more productive, capped agents will likely continue in Q2, we expect this to be partially offset by the fee changes implemented earlier this year, along with the improving contributions from our Ancillary business lines.
Speaker Change: Operating expenses, including GNA, Marketing, and R&D, total 39.1 million, or 11.1% of revenue in the first quarter, compared to 36.5 million, or 18.2% of revenue during Q1 2024.
Speaker Change: Now, the prior year period included a $9.3 million litigation settlement, excluding that, our operating expenses increased by approximately 12 million year over year.
Speaker Change: Approximately five-and-a-half million was related to higher revenue share and agent equity based compensation with the remaining increase driven by corporate investments across the business.
Speaker Change: including Operations, R&D, Back-Office Functions, as well as higher professional fees including those incurred related to our transition to U.S. Gat.
Speaker Change: Total 21.2 million in the first quarter, or 6% of revenue. That's a roughly 80 basis point improvement from 6.8% in Q1 2024. We're pleased to see this metric continue to improve, particularly considering the significant investments we continue to make across the business.
Speaker Change: Operating loss improved to $5.2 million compared to a loss of $15.7 million in Q1 2024, while that loss was $5.1 million compared to a net loss of $16.1 million in the first quarter of 2024.
Speaker Change: Adjusted EBITDA more than double to $8.3 million, up from $3.6 million in the first quarter of 2024, driven by a strong revenue and gross profit growth, which outpages growth in our ongoing cash operating expenses.
Speaker Change: Total Stock Faced Compensation for the Quarter was $12.7 million, broken down as follows, $8 million related to our Agents Stock Purchase Program, which you reflected in cost of sales, $3 million in Agents Equity Awards, recorded marketing, and $1.7 million in Employee Related Stock Compensation.
Speaker Change: .com is excluded from both adjusted operating expense and adjusted EBDA and full reconciliation are provided in our earnings release and investor presentation.
Speaker Change: We ended the quarter with a very strong balance sheet and net unrestricted cash and investments of approximately 35 million, up from 33 million at year end. We generated 16 million in operating cash flow and returned 6 million to shareholders through the repurchase of 1.3 million shares.
Speaker Change: We continue to operate with no debt and ample liquidity to support our growth while maintaining flexibility to return capital to shareholders and opportunistically invest in M&A.
I'll close with a few KPIs.
Speaker Change: Our gross transaction value was 13.5 billion of 80% year-over-year. Our median sale price was 380,000 of the first quarter of 2% year-over-year.
Speaker Change: Adjusted OPEX per transaction with $631 down 12% year-over-year from $715 in Q1 2024.
Speaker Change: and our head-count efficiency ratio, which we define as the number of full-time brokerage employees divided by the number of agents on our platform, was 1-88 at the end of the first quarter.
Speaker Change: notably this is down from 1 to 136 as of the end of 2024 and this is due to the fact that during the quarter we transitioned 136 employees in India from contractor status to full-time employees including 70 employees in our R&D organization.
Speaker Change: Even with this transition, we continue to believe we have one of the most efficient brokerage operations in the industry from a head count standpoint.
Speaker Change: More details on our results and key operating metrics can be found in the earnings press release and investor presentation that accompanies this call.
Tamir Poleg: As you know, we don't provide formal guidance, but we do continue to expect significant improvements in revenue, gross profit, and adjusted the EBITDA for the year, and we're certainly off to a good start. I will now turn it back to Tamir.
Speaker Change: Thank you, Ravi. As we close today's call, I want to acknowledge the backdrop we're operating in. We know it's been an uncertain time for agents, for consumers and for the broader economy.
Tamir Poleg: But at the same time, we're equally convinced that the world is entering one of the most transformative technological eras in history
Tamir Poleg: The rise of AI is not just another tool, but a fundamental shift that in our view will reshape industries, professions and entire business models. Our industry is no exception.
Tamir Poleg: Real was built for moments like this. As we've demonstrated this quarter and over the past several years we believe we've developed a model designed to win in any environment.
Tamir Poleg: While others brace for change, we lean into it. That's why, despite the noise, we continue to invest in innovation, expand our mode and deliver value for our agents by embracing the future, not resisting it.
Tamir Poleg: In fact, as a small but meaningful signal of where we're headed, I'll let you in on something. My prepared remarks today, including this section, were read entirely by Leo AI. That's not a gimmick. It's a reflection of how far we've come, and a hint of where we're going.
Tamir Poleg: At this time Leo is able to have real-time voice conversations and we are planning to test these capabilities with our agents in the coming weeks Now let's move to the Q&A session
Speaker Change: Certainly. Everyone at this time will be conducting a question and succession for analysts. If you have any questions or comments, please press star one on your phone at this time.
Speaker Change: We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality.
Speaker Change: Once again if you have any questions or comments please press star one on your phone.
Speaker Change: Your first question is coming from Darren Aftahi from Roth Capital Partners. Your line is live.
Speaker Change: Hey, this is Dawn for Darren. Thanks for taking my questions. First, on sort of AI and Leo.
Speaker Change: Could you talk about how Agent Adoption is of using those services? I know you said you switched all of the inbound calls over the wheel, but do you have any metrics that you're tracking? You can share about how these tools you're introducing or helping agents that are already quit productive, become more productive.
Yeah, thanks for the question.
Leo Cropylate is focused on-
Speaker Change: us delivering a better service to the agents so currently as we said Leo is taking all of the inbound phone calls and also having thousands of daily interactions with agents. Those are typically questions that have to do with compliance with...
Speaker Change: Tech-related questions, things that agents need in order to perform or operate on the platform. What we are now building and starting testing is all of those things that Leo can assist with agents.
Speaker Change: and their clients. So, everything that is consumer facing, this is still not ruled out.
Speaker Change: So, currently, I don't think we have any metrics that relate to...
Speaker Change: How Leo can help agents perform better or serve clients in a better way, but we do track the metrics of providing better service to our agents, to faster support, faster answers, help with...
Speaker Change: Documents, Review, and all of those things. So obviously, at the end of the day, Leo helps agents save time on every transaction, but still not consumer-facing.
Thanks, and in the VHS one more.
Speaker Change: Ravi on gross margins and capping. Like, can you help us think about the trends in gross margins?
Speaker Change: I know like 50% of the revenue was from capd agents and you're working on the new Ancillary programs, they're not quite at scale yet, like how do you sort of...
Speaker Change: Get us to think about the trending and gross margins and some of the expansion.
Speaker Change: Yeah, thanks, Bill. I think as I mentioned, we did start out the year with a higher mix of CAPT agents and CAPT revenue. I mean, it's a high-class problem to have just more productive agents on the platform. As I mentioned, I do think that dynamic will continue to continue to, but it's going to be part of lots that will be the fact that we have done some fee program
Speaker Change: It's February that will start this phase then, so I think you'll see that next impact that eats on the first quarter, but that will be more and more awesome as the earth progresses as anti-flurry and some of the C-changes roll out.
Thank you. That's it for me.
Thank you for your time.
Speaker Change: Thank you. Your next question is coming from Stephen Sheldon from William Blair. Your line is live.
Stephen Sheldon: Hey, good morning, thanks, and congrats on the strong start of the year and it's both incredible and scary how much that sounded like you, Tamir.
Speaker Change: So maybe just on that topic with Voice AI, you know, it sounds like you guys have been playing around with it quite a bit. Where do you see the opportunities to take Voice AI and kind of leverage it, I guess, within the value proposition for agents.
Speaker Change: Thanks, Stephen. Actually my mom couldn't distinguish between my actual voice and my eye voice. So, yeah, it's really scary, but also opens up your mind to a lot of possibilities. I think that when it comes to AI and especially voice.
Speaker Change: Application of AI. We see it in two ways. First of all, later this month, we're going to transition Leo phone line, agent support phone line, to my voice or agent.
Speaker Change: who call in to our support line will be answered by my voice and can have a conversation with me. We're currently testing real-life conversations between Leo and potential buyers and sellers, so Leo can...
Speaker Change: can now have a conversation about what is your desired property, what are you looking for, what's your financial situation, if you want to schedule a showing at a specific house, Leo can already do that, which is extremely impressive so I think that...
Speaker Change: Moving forward, we will continue to expand the OK capabilities with supporting our agents internally and just saving us a lot of overhead and...
Speaker Change: and, you know, human capital when it comes to internal support. But at the same time, I think that...
Speaker Change: The biggest potential is equipping our agents with a phone number.
Speaker Change: where they can actually train their own AI to use their own voice and then take their client's phone calls and answer all of their questions. And in addition to that, throughout that process, I think that lies...
Speaker Change: lies a tremendous opportunity to also push our Ancillary Services through those direct interactions that Leo will have with consumers. So this is where we're heading. It's moving very quickly and as I said, even this month we will experiment with some things that I don't think that anybody else in the industry is trying to do.
[inaudible]
Speaker Change: Got it. Yeah, it'll be fascinating to see how that all progresses.
Speaker Change: And then maybe on the age of recruiting side, you guys are becoming more and more of an outlier in the industry, if I'd grow an agent count when most are losing agents. So, I guess is there any part of a real value proposition that's really resonating right now, where we're in initiatives like...
Yeah, I can take that.
I think that-
Speaker Change: On Agent Attraction, what we've been doing very well for many years now is finding the right balance between providing value and constantly growing that value and the cost of operating on our platform.
planning and also putting into place at the moment.
Speaker Change: That value only increases, so you mentioned private label and proteins.
It's a part of the next...
Speaker Change: At the end of the day, agents join us either as fellow independent agents or as teams or as brokerages that are coming in under private label, but we don't think that there is any one specific reason at the moment that we can identify that agents are joining because of its accommodation.
Value and cost at the end of day.
Speaker Change: Got it, that's helpful, and then just the last one for me on the conversion of some employees in India at a full time.
Speaker Change: gets that there won't be a financial impact, as it's taken material financial impact, but will that have any changes on ability to get products and capabilities to market on the development side? Yeah, I guess just generally, how could this impact speed to market for some of the initiatives you have underway?
Thank you. Thank you.
Speaker Change: Yeah, there wouldn't be any financial impact. I think that as you bring in independent contractors and turn them into employees and a part of the family, maybe the connection, the bond and the commitment is a little bit stronger.
Speaker Change: We are expanding that team, so it will be difficult to compare apples to apples just because that team is continuously growing, but I think that it's a positive move overall that yes, it will help us with the return to market.
Great, thank you.
Thanks, Stephen. Thanks, Stephen.
Speaker Change: Thank you. Once again everyone, if you have any questions, your comments please press star then one on your phone. Your next question is coming from Matthew Erdner from Jones Trading. Your line is live.
Speaker Change: Hey good morning guys, I'd like to build off of that last question a little bit and then again congrats on a great quarter but you know with regard to the pipeline are you guys still seeing the same growth that kind of the top of the funnel there?
Matthew Erdner: And then, as you've brought on more people recently, has the onboarding time changed at all when you guys are bringing on these teams or private label brokerages?
Thanks, Matt. Yeah, the pipeline is still very strong. We've added...
Matthew Erdner: that has an effect on, you know, agent movements and teams movements. We're getting into the selling season.
Matthew Erdner: the summer season of the housing market, which is typically slower for agent transitions, but overall, I think that we still have a very strong pipeline and we didn't see any significant change either way.
Got it. That's helpful. Sorry, Ravi, go ahead.
Ravi: Yeah, Matt, I just wanted to add that, you know, Jenna Rosenbladner team, they've added a ton of talent on the age and success, age and experience and onboarding side. And so, as private label and pro teams have grown, we've added, you know, some really skilled leaders that are doing a great job onboarding teams. So, relative to a year ago, it is getting smoother, but it's because we put the resources in place.
Right, that's great. And then, you know, as a...
Fall Up Switching to Ancillary Services, you know.
Speaker Change: Looking at title and mortgage on that slide 32, where you guys are located, how much additional I guess a revenue do you think you could pick up by getting license in all 50 states? How big of a priority is that for you guys to kind of get rolled out in all 50 states?
Ravi: and then, yeah, I guess just, what are your thoughts there?
Speaker Change: Yeah, at the moment we're not looking to expand to all 50 states either on title or or mortgage. I think that we have a lot of work to do within the geographies that we're already in. So that's what we focus on.
on the title side. [inaudible]
Speaker Change: We did identify that we had a service level issue that we corrected and now we go out to our agents and as Ravi mentioned.
Ravi: We're changing a little bit the J.V. Structure is going from Team Focus J.V.
Ravi: and we're starting to see the Revan ramping up, both mortgage and title heads.
Ravi: bracket revenue month in April so we're seeing a lot of momentum but we just think that it's better for us to focus on the markets that they operate in at the moment instead of going and trying to expand to our 50 states.
Got it. That's helpful. Thank you guys.
Ravi: Thank you. There are no further questions from analysts in the queue. I'll now hand the floor over to the CFL Ravi Jani for questions from retail investors.
Ravi Jani: Great. Thank you, Matthew. So now that we've concluded the analyst portion, we wanted to address some of the questions we received from shareholders on the SAID Technologies Q&A portal. That was open last week. We received a number of excellent questions, and so thank you to all who participated. First question for Tamir, the combination of two questions. But
Ravi Jani: What acquisitions or tech developments around the horizon that serve real agents, and how does real plan to prioritize in-house R&D versus external partnerships for subscriptions?
Tamir Poleg: Thank you everybody for the questions. Obviously technology is something I'm very passionate about and we are highly active in evaluating M&A and tech opportunities that could add unique capabilities or accelerate the time to market for us.
Tamir Poleg: As you know, the property industry has seen billions of dollars in investment over the past few years.
Tamir Poleg: And now, many of these companies are trading at far more compelling valuations than just 12 or 18 months ago. That said, we'll stay disciplined and will only pursue opportunities that truly enhance our agent's value proposition and add differentiated capabilities, improve retention and...
Tamir Poleg: and or improved productivity. And so we'll always invest organically in our own platform in things like AI and Sintek, which we've been focused on in the past year and a half.
looking into potential eminently opportunities. [inaudible]
Speaker Change: Great. Thanks, Tamir. Next question for Sharran, what is real investing in with regards to agent support, technology, and growth opportunities?
Speaker Change: Awesome, thank you, Ravi. We're actually investing across the board now whether it may be AI tools and technology as you heard Tamir talk about to make agents productive because in more time they can spend
Speaker Change: Taking care of their operating needs, the less time they can spend on their operating is more time they can spend on their clients and then developing these Fintech products like the Roll Wall to give agents more financial flexibility, especially in a time like this where there's kind of up and down.
Speaker Change: in market volatility. Also, as the market's change, we're expanding our operations and support infrastructure, maybe broker support, or as to me, talked about support for agents to get their back of the office stuff done much faster, so they can be a bigger and a better service advisor to our client.
Speaker Change: And, of course, this is not a one-time non-changing thing. We're sticking to our strategy and always looking for more ways to find and make our agents more productive and, of course, to generate more income for them.
Speaker Change: Thanks, Ron. Next question I'll take, which is how it's real balancing fiscal responsibility with growth and expansion given the industry slowdown.
Um...
Speaker Change: You know, as you know, we've been disciplined from day one. We're focused on building a business with strong unit economics and...
Speaker Change: Even as the broader market has contracted the past several years, we've continued to grow and improve profitability by keeping our cost structure lean and leveraging technology.
Speaker Change: And so at the same time, we're continuing to invest in high impact areas in technology and agent support and other initiatives that support long-term growth.
Speaker Change: But we're always going to be very disciplined and focused on costs and execution, and we're fortunate that our balance sheet remains in a really strong place, we have $35 million in cash.
Speaker Change: No debt, and so we can continue to invest in our business, support our agents while also returning capital to shareholders via share repurchases like we did this quarter.
Speaker Change: And so the last question for Tamir, as the role of the MLS in real estate continues to evolve, what is real's perspective on its future and what strategic adjustments is real making?
Speaker Change: Thanks for the question. There's been a lot of noise in the industry around the role of the MLS and it's through that the landscape is evolving as one of the largest brokerage in the country.
Speaker Change: a lot of companies are involving us in their ideas or their initiatives and trying to kind of collaborate with us on that but it's real our perspective is pretty simple.
Speaker Change: Any change in how homes are listed and discovered should ultimately benefit the consumer Some companies are approaching this from a lens of trying to gain competitive advantage but
Speaker Change: We're focused on what delivers the best possible experience for buyers and sellers. The reality is, the more exposure a listing has, the better the outcome. This is what we believe in, and that's the foundation of an efficient marketplace. So, while the MLS conversations will likely continue, here at Real will...
Stay focused on building for the future.
Matthew Erdner: Thanks, Tamir. It's a great way to wrap it up. If you have 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?
Speaker Change: Thank you. Certainly. Ladies and gentlemen, today's conference will be available for replay. The replay phone number is 877-481-4010 and the replay code is 520-80