REAX — The Real Brokerage Inc.

Summary of REAX Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Q4 2025 Performance:

  • Closed transactions increased by 38% to nearly 49,000.
  • Revenue rose 44% to $505 million.
  • Gross profit increased by 30% to $39 million.
  • Net loss narrowed to $4.2 million; adjusted EBITDA was positive at $14.2 million, up 56% year-over-year.

• Full Year 2025 Performance:

  • Revenue grew 56% to nearly $2 billion.
  • Gross profit increased 44% to $166 million.
  • GAAP net loss improved to $8.1 million from $26.5 million in 2024.
  • Adjusted EBITDA reached $62.9 million, a 57% increase.
  • Positive cash flow from operations of approximately $66 million, with $39 million returned to shareholders via buybacks.

2. Strategic Updates and Business Highlights

• The company ended 2025 with 31,739 agents, a 31% increase year-over-year, and has since grown to over 33,000.
• Continued expansion into ancillary services:
  • OneReal Mortgage: Generated $6 million in revenue, up 50% year-over-year.
  • OneReal Title: Revenue of $5 million, up 5%, with plans to open three additional joint ventures in 2026.
  • RealWallet: Generated nearly $900,000 in its first full year, with a current run rate of approximately $1.5 million.
• Emphasis on technology integration, particularly through the proprietary transaction management platform, Reason, and AI tools like LEO, which enhance agent productivity and operational efficiency.

3. Forward Guidance and Outlook

• No formal guidance provided for Q1 2026, but a sequential decline in revenue, operating loss, and adjusted EBITDA is expected due to a slow start in January and February.
• Anticipated continued organic growth outpacing the broader industry, with expectations for improved profitability metrics in full-year 2026.
• Focus on maintaining agent retention and enhancing the attach rates of ancillary services.

4. Bad News, Challenges, or Points of Concern

• The company faces headwinds from a broader housing market that remains below long-term averages, with existing home sales constrained.
• A shift in transaction mix towards capped agents has negatively impacted gross margins, with Q4 gross margin at 7.7%, down from 8.6% year-over-year.
• Transition from team-based to state-based joint ventures in the title segment has created temporary performance challenges, with revenue drag estimated in the hundreds of thousands of dollars.

5. Notable Q&A Insights

• Agent Recruitment: The company remains optimistic about attracting agents despite industry changes, with plans to announce new initiatives to enhance agent attraction.
• Title Segment Performance: Management acknowledged the transition year for title services and expects improvements in attach rates and overall performance in 2026.
• Mortgage Initiatives: New leadership in OneReal Mortgage is expected to drive growth, with a strong pipeline of agents becoming loan officers.
• AI Integration: Management views AI developments as opportunities to enhance agent productivity and retention, with ongoing experiments to improve lead conversion.

Overall, The Real Brokerage Inc. demonstrated strong growth in 2025, with a focus on technology and ancillary services, while navigating challenges in the housing market and operational transitions.