6-K
Real Brokerage Inc (REAX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of March 2024
Commission File Number: 001-40442
THE REAL BROKERAGE INC.
(Registrant)
701 Brickell Avenue, 17^th^ Floor
Miami, Florida, 33131 USA
(Address of Principal Executive Offices)
Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☐ Form 40-F ☒
Indicate by check mark if the Registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the Registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| THE REAL BROKERAGE INC. | ||
|---|---|---|
| (Registrant) | ||
| Date March 7, 2024 | By | /s/ Tamir Poleg |
| Tamir Poleg | ||
| Chief Executive Officer |
EXHIBIT INDEX
| Exhibit | Description of Exhibit |
|---|---|
| 99.1 | Press Release dated March 7, 2024 - The Real Brokerage Inc. Announces Fourth Quarter and Full Year 2023 Financial Results |
The Real Brokerage Inc.: Exhibit 99.1 - Filed by newsfilecorp.com
The Real Brokerage Inc. Announces Fourth Quarter and Full Year 2023 Financial Results
TORONTO and NEW YORK, March 7, 2024 - (BUSINESS WIRE) - The Real Brokerage Inc. (NASDAQ: REAX) ("Real" or the "Company"), a technology platform reshaping real estate for agents, home buyers, and sellers, announced today financial results for the fourth quarter and year ended December 31, 2023.
"Real delivered another record year in 2023, despite a challenging industry backdrop. Our performance both in the quarter and for the full year is a testament to our unique agent value proposition, our scalable technology platform, and our efficient operating model," said Tamir Poleg, Real's Chairman and Chief Executive Officer. "Our differentiated technology and service offering continues to empower agents to grow their businesses against the odds, while improving the experience for home buyers and sellers. Looking forward, we're excited to continue leading the industry with cutting-edge innovations, including the One Real consumer-facing app and the Real Wallet financial ecosystem, which were designed to enhance the Real experience for agents and their clients."
"We are thrilled by the momentum we're seeing across our agent base, which has now reached the 16,000 agent milestone. This achievement is a clear indication of the attractiveness of Real's platform, and our unique, collaborative culture. With the formal launch of our Private Label and ProTeams programs in January, it is now easier than ever for independent brokerages and teams to join Real - and experience all of the benefits associated with being a part of the fastest-growing, publicly traded brokerage firm," said Sharran Srivatsaa, President of Real.
"Real achieved significant growth in Revenue, Gross profit, and Adjusted EBITDA^1^ in 2023, underscoring the strength and scalability of our business model," said Michelle Ressler, Real's Chief Financial Officer. "We look forward to building on this progress and delivering year-over-year growth across each of these metrics in 2024."
Q4 and Full Year 2023 Operational Highlights
● The total value of completed real estate transactions reached $6.8 billion in the fourth quarter of 2023, an increase of 92% from $3.5 billion in the fourth quarter of 2022. For the full year 2023, the total value of completed real estate transactions reached $25.9 billion, an increase of 80% from $14.4 billion for the full year 2022.
● The total number of transactions closed was 17,749 in the fourth quarter of 2023, an increase of 82% from 9,745 in the fourth quarter of 2022. For the full year 2023, the total number of transactions closed was 66,646, an increase of 78% from 37,450 for the full year 2022.
● The total number of agents on the platform increased to 13,650 at the end of the fourth quarter, a 66% year-over-year increase. As of March 7, 2024, approximately 16,000 agents are now on the Real platform.
Q4 2023 Financial Highlights
● Revenue rose to $181.3 million in the fourth quarter of 2023, an increase of 89% from $96.1 million in the fourth quarter of 2022.
^1^ There are references to "Adjusted EBITDA" and "Adjusted EBITDA excluding non-recurring stock based compensation balance sheet adjustment" in this press release, which are non-IFRS measures. See accompanying note under the heading "Non-IFRS Measures" for an explanation of the composition of non-IFRS measures.
● Gross profit reached $15.5 million in the fourth quarter of 2023, up 89% from $8.2 million in the fourth quarter of 2022.
● Net loss attributable to owners of the Company was $12.0 million in the fourth quarter of 2023, compared to $6.8 million in the fourth quarter of 2022.
● Adjusted EBITDA was positive $8.5 million in the fourth quarter of 2023, compared to negative ($0.1) million in the fourth quarter of 2022. Adjusted EBITDA excluding a non-recurring stock based compensation balance sheet adjustment, which totaled $6.2 million in the quarter, was positive $2.3 million in the fourth quarter of 2023, a $2.4 million improvement from negative ($0.1) million in the fourth quarter of 2022.
● Operating expenses, which include General & Administrative, Marketing, and Research and Development expenses, increased by 76% to $26.8 million in the fourth quarter of 2023, up from $15.2 million in the fourth quarter of 2022. Operating expenses include a 70% year-over-year increase in revenue share expense, which was $6.8 million in the fourth quarter of 2023, compared to $4.0 million in the fourth quarter of 2022. Operating expenses in the fourth quarter of 2023 include a $5.1 million out of period adjustment in stock based compensation expense that was recorded in the current period.
● Adjusted operating expenses^2^, which reflect operating expenses less revenue share expense, stock-based compensation, depreciation and other unique or non-cash expenses, were $11.2 million in the fourth quarter of 2023, an increase of 46% from $7.7 million in the fourth quarter of 2022.
● Loss per share was $0.07 in the fourth quarter of 2023, compared to a $0.04 loss per share in the fourth quarter of 2022.
● The Company repurchased 765,000 common shares for $1.1 million in the fourth quarter of 2023, pursuant to its normal course issuer bid.
● Operating expense per transaction excluding revenue share was $1,124 in the fourth quarter of 2023, a decline of 2% from $1,146 in the fourth quarter of 2022. Adjusted operating expense per transaction was $632, a decline of 20% from $787 in the fourth quarter of 2022.
Full Year 2023 Financial Highlights
● Revenue for the full year 2023 was $689.2 million, an increase of 81% from $381.8 million for the full year 2022.
● Gross profit for the full year 2023 reached $62.9 million, up 97% from $32.0 million for the full year 2022.
● Net loss attributable to owners of the Company for the full year 2023 was $27.5 million, compared to a loss of $20.6 million for the full year 2022.
● Adjusted EBITDA was positive $13.9 million for the full year 2023, compared to negative ($0.7) million for the full year 2022. Adjusted EBITDA excluding a non-recurring stock based compensation balance sheet adjustment, which totaled $6.2 million for the year, was positive $7.6 million for the full year 2023, an improvement from negative ($0.7) million for the full year 2022.
^2^ There are references to "Adjusted operating expenses" in this press release, which is a non-IFRS measure. See accompanying note under the heading "Non-IFRS Measures" for an explanation of the composition of non-IFRS measures.
● Operating expenses, which include General & Administrative, Marketing, and Research and Development expenses, increased by 72% to $88.9 million for the full year 2023, up from $51.7 million for the full year 2022. Operating expenses include an 86% year-over-year increase in revenue share expense, which was $27.9 million for the full year 2023, compared to $15.0 million for the full year 2022.
● Adjusted operating expenses, which reflect operating expenses less revenue share expense, stock-based compensation, depreciation and other unique or non-cash expenses, were $42.8 million for the full year 2023, an increase of 55% from $27.7 million for the full year 2022.
● Loss per share was $0.15 for the full year 2023, compared to a $0.12 loss per share for the full year 2022.
● The Company repurchased 2 million common shares for $2.9 million during 2023, pursuant to its normal course issuer bid.
● As of December 31, 2023 the Company held unrestricted cash and investments of $28.9 million, a $10.2 million increase from the prior year. These figures reflect $14.7 million held in cash and an additional $14.2 million held in investments in financial assets.
The Company will discuss the fourth quarter and full year 2023 results on a conference call and live webcast today at 8:30 a.m. ET.
| Conference Call Details: | |
|---|---|
| Date: | Thursday, March 7, 2024 |
| Time: | 8:30 a.m. ET |
| Dial-in Number: | North American Toll Free: 888-506-0062 |
| International: 973-528-0011 | |
| Access Code: | 232620 |
| Webcast: | https://www.webcaster4.com/Webcast/Page/2699/49884 |
| Replay Information: | |
| Replay Number: | North American Toll Free: 877-481-4010 |
| International: 919-882-2331 | |
| Access Code: | 49884 |
| Replay Link: | https://www.webcaster4.com/Webcast/Page/2699/49884 |
Real expects to file in March 2024 audited consolidated financial statements and related notes for the period ended December 31, 2023 and 2022, the related management's discussion and analysis for the year ended December 31, 2023, and its annual information form for the year ended December 31, 2023 (collectively, the "Annual Filings"), with the U.S. Securities and Exchange Commission in its annual report on Form 40-F on EDGAR (www.sec.gov) and with the Canadian securities regulators on SEDAR+ (www.sedarplus.ca).
Non-IFRS Measures
This news release includes reference to "Adjusted EBITDA", "Adjusted EBITDA excluding non-recurring stock-based compensation balance sheet adjustment" and "Adjusted Operating Expense", which are non-International Financial Reporting Standards ("IFRS") financial measures. Non-IFRS measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS, and are therefore unlikely to be comparable to similar measures presented by other companies.
Adjusted EBITDA is used as an alternative to net income by removing major non-cash items ,such as depreciation, amortization, interest, stock-based compensation, current and deferred income tax expenses and other items management considers non-operating in nature.
Adjusted EBITDA excluding non-recurring stock based compensation balance sheet adjustment is used as an alternative to net income by removing major non-cash items such as depreciation, amortization, interest, stock-based compensation, current and deferred income tax expenses and other items management considers non-operating in nature, but removes a non-recurring balance sheet adjustment recorded in the fourth quarter of 2023.
Adjusted Operating Expense is used as an alternative to operating expenses by removing major non-cash items such as stock-based compensation, depreciation, and other unique or non-cash expenses, while retaining ongoing fixed operating expenses and excluding variable cash expenses associated with revenue share.
Adjusted EBITDA, Adjusted EBITDA excluding non-recurring stock-based compensation balance sheet adjustment, and Adjusted Operating Expense have no direct comparable IFRS financial measures. The Company has used or included these non-IFRS measures solely to provide investors with added insight into Real's financial performance. Readers are cautioned that such non-IFRS measures may not be appropriate for any other purpose. Non-IFRS measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Our Adjusted EBITDA and Adjusted EBITDA excluding non-recurring stock based compensation balance sheet adjustment are reconciled to the most comparable IFRS measure for the three months and twelve months ended December 31, 2023 and 2022 and are presented in the table below labeled Reconciliation of Total Comprehensive Loss Attributable to Owners of the Company to Adjusted EBITDA and Adjusted EBITDA excluding non-recurring stock-based compensation balance sheet adjustment. Our Adjusted Operating Expense reconciled to the most comparable IFRS measure is presented on a quarterly basis for the prior two fiscal years in the table below labeled Reconciliation of Operating Expense to Adjusted Operating Expense.
THE REAL BROKERAGE, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Expressed in thousands of U.S. dollars)
(unaudited)
| As of | ||||||
|---|---|---|---|---|---|---|
| December 31, 2023 | December 31, 2022 | |||||
| ASSETS | **** | |||||
| CURRENT ASSETS | **** | |||||
| Cash and cash equivalents | $ | 14,707 | $ | 10,846 | ||
| Restricted cash | 12,948 | 7,481 | ||||
| Investments in financial assets | 14,222 | 7,892 | ||||
| Trade receivables | 6,441 | 1,547 | ||||
| Other receivables | 63 | 74 | ||||
| Prepaid expenses and deposits | 2,132 | 529 | ||||
| TOTAL CURRENT ASSETS | 50,513 | 28,369 | ||||
| NON-CURRENT ASSETS | **** | **** | ||||
| Intangible assets | 3,442 | 3,708 | ||||
| Goodwill | 8,993 | 10,262 | ||||
| Property and equipment | 1,600 | 1,350 | ||||
| Right-of-use assets | - | 73 | ||||
| TOTAL NON-CURRENT ASSETS | 14,035 | 15,393 | ||||
| TOTAL ASSETS | 64,548 | 43,762 | ||||
| LIABILITIES AND EQUITY | ||||||
| CURRENT LIABILITIES | ||||||
| Accounts payable | 571 | 474 | ||||
| Accrued liabilities | 13,374 | 11,866 | ||||
| Customer deposits | 12,948 | 7,481 | ||||
| Other payables | 302 | 1,188 | ||||
| Lease liabilities | - | 96 | ||||
| TOTAL CURRENT LIABILITIES | 27,195 | 21,105 | ||||
| NON-CURRENT LIABILITIES | **** | **** | ||||
| Warrants outstanding | 269 | 242 | ||||
| TOTAL NON-CURRENT LIABILITIES | 269 | 242 | ||||
| TOTAL LIABILITIES | 27,464 | 21,347 | ||||
| EQUITY | ||||||
| EQUITY ATTRIBUTABLE TO OWNERS | ||||||
| Share premium | 62,567 | 63,204 | ||||
| Stock-based compensation reserve | 52,937 | 25,083 | ||||
| Deficit | (78,205 | ) | (50,704 | ) | ||
| Other reserves | (167 | ) | (469 | ) | ||
| Treasury Stock, at cost | (257 | ) | (14,962 | ) | ||
| EQUITY ATTRIBUTABLE TO OWNERS | 36,875 | 22,152 | ||||
| Non-controlling interests | 209 | 263 | ||||
| TOTAL EQUITY | 37,084 | 22,415 | ||||
| TOTAL LIABILITIES AND EQUITY | 64,548 | 43,762 |
THE REAL BROKERAGE, INC.
CONSOLIDATED STATEMENTS OF LOSS AND OTHER COMPREHENSIVE LOSS
(Expressed in thousands of U.S. dollars, except for per share amounts)
(unaudited)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Revenues | $ | 181,341 | $ | 96,118 | $ | 689,158 | $ | 381,756 | ||||
| Commissions and other agent-related costs | 165,810 | 87,898 | 626,285 | 349,806 | ||||||||
| Gross Profit | 15,531 | 8,220 | 62,873 | 31,950 | ||||||||
| General & administrative expenses | 15,387 | 7,121 | 42,913 | 24,155 | ||||||||
| Marketing expenses | 9,084 | 7,061 | 38,611 | 22,674 | ||||||||
| Research and development expenses | 2,325 | 1,002 | 7,359 | 4,867 | ||||||||
| Operating Loss | (11,265 | ) | (6,964 | ) | (26,010 | ) | (19,746 | ) | ||||
| Other income/(expenses), net | (693 | ) | 62 | (587 | ) | 729 | ||||||
| Listing expenses | - | (16 | ) | - | (151 | ) | ||||||
| Finance expenses, net | (32 | ) | 159 | (619 | ) | (1,167 | ) | |||||
| Net Loss | (11,990 | ) | (6,759 | ) | (27,216 | ) | (20,335 | ) | ||||
| Net Income Attributable to Noncontrolling Interests | (26 | ) | 50 | 285 | 242 | |||||||
| Net Loss Attributable to Owners of the Company | (11,964 | ) | (6,809 | ) | (27,501 | ) | (20,577 | ) | ||||
| Other comprehensive income/(loss), Items that will be reclassified subsequently to profit or loss: | **** | **** | **** | **** | ||||||||
| Cumulative (gain)/loss on investments in debt instruments classified as at FVTOCI reclassified to profit or loss | 116 | 128 | 330 | (407 | ) | |||||||
| Foreign currency translation adjustment | (38 | ) | (58 | ) | (28 | ) | 285 | |||||
| Total Comprehensive Loss Attributable to Owners of the Company | (11,886 | ) | (6,739 | ) | (27,199 | ) | (20,699 | ) | ||||
| Total Comprehensive Income Attributable to NCI | (26 | ) | 50 | 285 | 242 | |||||||
| Total Comprehensive Loss | (11,912 | ) | (6,689 | ) | (26,914 | ) | (20,457 | ) | ||||
| Loss per share | ||||||||||||
| Weighted-average number of Common Shares | 182,450 | 179,103 | 178,127 | 178,201 | ||||||||
| Basic and diluted loss per share | $ | (0.07 | ) | $ | (0.04 | ) | $ | (0.15 | ) | $ | (0.12 | ) |
THE REAL BROKERAGE, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Expressed in thousands of U.S. dollars)
(unaudited)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||||||
| OPERATING ACTIVITIES | **** | |||||||||||
| Net Loss | $ | (11,990 | ) | $ | (6,759 | ) | $ | (27,216 | ) | $ | (20,335 | ) |
| Adjustments for: | ||||||||||||
| Depreciation and amortization | 298 | 108 | 1,128 | 333 | ||||||||
| Impairment of goodwill | - | - | 723 | - | ||||||||
| Equity-settled share-based payment | 19,423 | 13,877 | 38,403 | 16,201 | ||||||||
| Finance costs | (65 | ) | (70 | ) | 91 | 167 | ||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Trade receivables | (3,902 | ) | (764 | ) | (4,894 | ) | (1,293 | ) | ||||
| Other receivables | 12 | - | 11 | (51 | ) | |||||||
| Prepaid expenses and deposits | (807 | ) | 253 | (1,603 | ) | (81 | ) | |||||
| Accounts payable | (82 | ) | (835 | ) | 97 | 420 | ||||||
| Accrued liabilities | (4,316 | ) | (917 | ) | 7,752 | 5,316 | ||||||
| Customer deposits | (3,385 | ) | (2,599 | ) | 5,467 | 4,170 | ||||||
| Other payables | (1,770 | ) | (340 | ) | (86 | ) | 1,148 | |||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | (6,584 | ) | 1,954 | 19,873 | 5,995 | |||||||
| INVESTING ACTIVITIES | ||||||||||||
| Purchase of property and equipment | (182 | ) | (481 | ) | (629 | ) | (1,408 | ) | ||||
| Acquisition of subsidiaries | - | (707 | ) | - | (8,152 | ) | ||||||
| Investment deposits in debt instruments held at FVTOCI | (81 | ) | 1,306 | (6,847 | ) | (125 | ) | |||||
| Investment withdrawals in debt instruments held at FVTOCI | 2 | 637 | 847 | 637 | ||||||||
| NET CASH USED IN INVESTING ACTIVITIES | (261 | ) | 755 | (6,629 | ) | (9,048 | ) | |||||
| FINANCING ACTIVITIES | ||||||||||||
| Purchases of common shares | (1,104 | ) | (1,149 | ) | (2,865 | ) | (8,060 | ) | ||||
| Shares withheld for taxes | (362 | ) | - | (362 | ) | - | ||||||
| Proceeds from exercise of stock options | (90 | ) | 192 | 502 | 265 | |||||||
| Payment of lease liabilities | - | 33 | (96 | ) | (35 | ) | ||||||
| Cash payment for contingent consideration | - | - | (800 | ) | - | |||||||
| Dividends paid to non-controlling interest | (36 | ) | 48 | (339 | ) | (19 | ) | |||||
| NET CASH USED IN FINANCING ACTIVITIES | (1,592 | ) | (876 | ) | (3,960 | ) | (7,849 | ) | ||||
| Net change in cash, cash equivalents and restricted cash | (7,714 | ) | (6,300 | ) | 9,284 | (10,902 | ) | |||||
| Cash, cash equivalents and restricted cash, beginning of year | 35,339 | 24,547 | 18,327 | 29,129 | ||||||||
| Fluctuations in foreign currency | 29 | 80 | 44 | 100 | ||||||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH BALANCE, ENDING BALANCE | $ | 27,655 | $ | 18,327 | $ | 27,655 | $ | 18,327 | ||||
| SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | **** | **** | **** | **** | ||||||||
| Share-based compensation as part of Expetitle consideration | - | - | - | 4,325 | ||||||||
| Share-based compensation as part of LemonBrew consideration | - | - | - | 450 |
THE REAL BROKERAGE, INC.
RECONCILIATION OF TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE TO OWNERS OF THE COMPANY TO ADJUSTED EBITDA
AND ADJUSTED EBITDA EXCLUDING NON-RECURRING STOCK BASED COMPENSATION BALANCE SHEET ADJUSTMENT
(Expressed in thousands of U.S. dollars)
(unaudited)
| **** | Three Months Ended | For the Year Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |||||||||
| Net Loss and Comprehensive Loss | $ | (11,886 | ) | $ | (6,739 | ) | $ | (27,199 | ) | $ | (20,699 | ) |
| Add/(Deduct): | ||||||||||||
| Finance Expenses, net | 32 | (170 | ) | 619 | 1,167 | |||||||
| Net Income Attributable to Noncontrolling Interest | (26 | ) | 50 | 285 | 242 | |||||||
| Cumulative (Gain)/Loss on Investments in Debt Instruments Classified as at FVTOCI Reclassified to Profit or Loss | (116 | ) | (128 | ) | (330 | ) | 407 | |||||
| Depreciation | 298 | 108 | 1,128 | 333 | ||||||||
| Stock Based Compensation Adjustments | 19,423 | 6,132 | 38,403 | 16,700 | ||||||||
| Goodwill Impairment | 723 | - | 723 | - | ||||||||
| Listing Expenses | - | 16 | - | 151 | ||||||||
| Restructuring Expenses | 58 | 160 | 223 | 222 | ||||||||
| Other Professional Expenses | - | 456 | - | 762 | ||||||||
| Adjusted EBITDA^1^ | 8,506 | (115 | ) | 13,852 | (715 | ) | ||||||
| Non-Recurring Stock Based Compensation Adjustment | 6,208 | - | 6,208 | - | ||||||||
| Adjusted EBITDA^1^Excluding Non-Recurring Stock Based Compensation Balance Sheet Adjustment | 2,298 | (115 | ) | 7,644 | (715 | ) |
^1^Adjusted EBITDA for December 31, 2022 has been restated to account for Stock-Based Compensation recognized in Cost of Goods Sold.
THE REAL BROKERAGE, INC.
BREAKOUT OF REVENUE BY SEGMENT
(Expressed in thousands of U.S. dollars)
(unaudited)
| **** | Three Months Ended | For the Year Ended | ||||||
|---|---|---|---|---|---|---|---|---|
| December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |||||
| Main revenue streams | ||||||||
| Commissions | $ | 180,417 | $ | 97,327 | $ | 684,873 | $ | 379,868 |
| Title | 480 | 477 | 2,990 | 1,869 | ||||
| Mortgage Income | 444 | 19 | 1,295 | 19 | ||||
| Total Revenue | 181,341 | 97,823 | 689,158 | 381,756 |
THE REAL BROKERAGE INC.
RECONCILIATION OF OPERATING EXPENSE TO ADJUSTED OPERATING EXPENSE BY QUARTER
(Expressed in thousands of U.S. dollars)
(unaudited)
| 2022 | 2023 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |||||||||
| Operating Expense | $ | 10,129 | $ | 13,496 | $ | 12,886 | $ | 15,184 | $ | 17,846 | $ | 21,499 | $ | 22,742 | $ | 26,796 |
| Less: Revenue Share Expense | 2,703 | 4,376 | 3,876 | 4,020 | 5,434 | 7,684 | 7,946 | 6,840 | ||||||||
| Revenue Share Expense (% of revenue) | 4.4% | 3.9% | 3.5% | 4.2% | 5.0% | 4.1% | 3.7% | 3.8% | ||||||||
| Less: | **** | **** | **** | **** | **** | **** | **** | **** | ||||||||
| Stock-Based Compensation - Employees | 1,205 | 897 | 281 | 608 | 1,019 | 1,214 | 285 | 6,543 | ||||||||
| Stock-Based Compensation - Agents | 582 | 547 | 1,776 | 2,614 | 1,541 | 1,640 | 2,769 | 1,830 | ||||||||
| Depreciation Expense | 3 | 135 | 87 | 108 | 269 | 284 | 277 | 298 | ||||||||
| Restructuring Expense | - | - | 62 | 160 | 41 | 44 | 80 | 58 | ||||||||
| Subtotal | 1,790 | 1,579 | 2,206 | 3,490 | 2,870 | 3,182 | 3,411 | 8,729 | ||||||||
| Adjusted Operating Expense^1^ | 5,636 | 7,541 | 6,804 | 7,674 | 9,542 | 10,633 | 11,385 | 11,226 | ||||||||
| Adjusted Operating Expense (% of revenue) | 9.1% | 6.7% | 6.1% | 8.0% | 8.8% | 5.7% | 5.3% | 6.2% |
^1^Adjusted operating expense excludes revenue share, stock-based compensation, depreciation and other non-recurring or non-cash expenses.
THE REAL BROKERAGE INC.
KEY PERFORMANCE METRICS BY QUARTER
(unaudited)
| 2022 | 2023 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | ||||||||
| Transaction Data | **** | ||||||||||||||
| Closed Transaction Sides | 6,248 | 10,224 | 11,233 | 9,745 | 10,963 | 17,537 | 20,397 | 17,749 | |||||||
| Total Value of Home Side Transactions (, billions) | 2.4 | 4.2 | 4.2 | 3.5 | 4.0 | 7.0 | 8.1 | 6.8 | |||||||
| Median Home Sale Price (, thousands) | 345 | $ | 375 | $ | 360 | $ | 348 | $ | 350 | $ | 369 | $ | 370 | $ | 355 |
| Agent Metrics | **** | ||||||||||||||
| Total Agents | 4,500 | 5,600 | 6,700 | 8,200 | 10,000 | 11,500 | 12,175 | 13,650 | |||||||
| Agent Churn Rate (%) | 7.9 | 7.2 | 7.3 | 4.4 | 8.3 | 6.5 | 10.8 | 6.2 | |||||||
| Revenue Churn Rate (%) | 1.6 | 2.1 | 2.5 | 2.4 | 4.3 | 3.8 | 4.5 | 4.9 | |||||||
| Headcount and Efficiency Metrics | **** | ||||||||||||||
| Full-Time Employees | 112 | 121 | 122 | 118 | 127 | 145 | 162 | 159 | |||||||
| Full-Time Employees, Excluding One Real Title and One Real Mortgage | 82 | 91 | 87 | 84 | 88 | 102 | 120 | 118 | |||||||
| Headcount Efficiency Ratio1 | 1:55 | 1:62 | 1:77 | 1:98 | 1:114 | 1:113 | 1:101 | 1:116 | |||||||
| Revenue Per Full Time Employee (, thousands)2 | 752 | $ | 1,235 | $ | 1,283 | $ | 1,144 | $ | 1,226 | $ | 1,817 | $ | 1,789 | $ | 1,537 |
| Operating Expense Excluding Revenue Share (, thousands) | 7,426 | $ | 9,120 | $ | 9,010 | $ | 11,164 | $ | 12,412 | $ | 13,815 | $ | 14,796 | $ | 19,956 |
| Operating Expense Per Transaction Excluding Revenue Share () | 1,189 | $ | 892 | $ | 802 | $ | 1,146 | $ | 1,132 | $ | 788 | $ | 725 | $ | 1,124 |
| Adjusted Operating Expense (, thousands)3 | 5,636 | $ | 7,541 | $ | 6,804 | $ | 7,674 | $ | 9,542 | $ | 10,633 | $ | 11,385 | $ | 11,226 |
| Adjusted Operating Expense Per Transaction () | 902 | $ | 738 | $ | 606 | $ | 787 | $ | 870 | $ | 606 | $ | 558 | $ | 632 |
All values are in US Dollars.
^1^Defined as the ratio of full-time brokerage employees (excluding One Real Title and One Real Mortgage employees) to the number of agents on our platform.
^2^Reflects total Revenue divided by full-time brokerage employees (excluding One Real Title and One Real Mortgage employees).
^3^Adjusted operating expense excludes revenue share, stock-based compensation, depreciation and other non-recurring or non-cash expenses.
Forward-Looking Information
This press release contains forward-looking information within the meaning of applicable Canadian securities laws. Forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "expect", "likely" and "intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions. These statements reflect management's current beliefs and are based on information currently available to management as at the date hereof. Forward-looking information in this press release includes, without limiting the foregoing, information relating to Real's fourth quarter and full year 2023 earnings call, the release of the financial results and the business and strategic plans of Real.
Forward-looking information is based on assumptions that may prove to be incorrect, including but not limited to Real's business objectives, expected growth, results of operations, performance, business projects and opportunities and financial results. Real considers these assumptions to be reasonable in the circumstances. However, forward-looking information is subject to known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those expressed or implied in the forward-looking information. Important factors that could cause such differences include, but are not limited to, slowdowns in real estate markets, economic and industry downturns and Real's ability to attract new agents and retain current agents. These factors should be carefully considered and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, Real cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this press release, and Real assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.
About Real
Real (NASDAQ: REAX) is a real estate experience company working to make life's most complex transaction simple. The fast-growing company combines essential real estate, mortgage and closing services with powerful technology to deliver a single seamless end-to-end consumer experience, guided by trusted agents. With a presence in all 50 states throughout the U.S. and Canada, Real supports 16,000 agents who use its digital brokerage platform and tight-knit professional community to power their own forward-thinking businesses. Additional information can be found on its website at www.onereal.com.
Contact Information
For additional information, please contact: Ravi Jani
Vice President, Investor Relations and Financial Planning & Analysis [email protected] 908.280.2515
For media inquiries, please contact: Elisabeth Warrick
Senior Director, Marketing, Communications & Brand [email protected]
201.564.4221