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Introduction & Market Context
Real Brokerage Inc (NASDAQ:REAX) presented its Q1 2025 investor update on May 8, highlighting continued strong growth across key metrics despite representing less than 2% of the total real estate agent market. The technology-focused brokerage has positioned itself as a disruptor in the traditional real estate industry, leveraging proprietary software and innovative financial incentives to attract agents.
The company’s presentation comes after a strong Q4 2024 earnings report where it exceeded expectations with revenue of $351 million and a narrower-than-expected loss of $0.03 per share. REAX shares have responded positively, rising 5.67% in the most recent trading session to $4.47, and showing additional gains of 1.79% in after-hours trading.
Quarterly Performance Highlights
Real Brokerage reported last twelve months (LTM) revenue of $1.418 billion in Q1 2025, continuing its upward trajectory. The company’s agent count reached 26,870, representing remarkable growth of over 6x since the end of 2021, despite challenging conditions in the broader housing market.
As shown in the following chart of quarterly revenue and agent growth:
The company’s adjusted EBITDA for the LTM period reached $44.6 million in Q1 2025, while transaction sides totaled 135,186. The gross market value of properties closed over the last twelve months hit $55 billion, with a median home sale price of approximately $380,000.
Real’s growth in transaction volume and agent count has been particularly notable given the challenging real estate market conditions:
The company has maintained operational efficiency despite rapid expansion, with adjusted operating expenses decreasing from 7.4% of revenue in Q1 2023 to 5.1% in Q1 2025. However, the agent-to-employee ratio shifted in Q1 2025 after converting 136 contractors in India to full-time employees, moving from 138 agents per employee to 88.
Strategic Initiatives
Real Brokerage continues to emphasize its technology-first approach, with several key initiatives designed to enhance its competitive position and improve margins.
The company’s proprietary reZEN software platform offers comprehensive tools for agent productivity, marketing, community building, and brokerage operations:
A key upcoming innovation is "Leo Copilot," an AI-powered virtual assistant scheduled for launch in Q4 2024. Leo will provide 24/7 assistance, contextual communication, personalized marketing, and continuous improvement capabilities:
Real is also expanding its fintech offerings through Real Wallet, which provides agents with branded debit cards and Canadian business lines of credit. This service has shown rapid adoption, generating $126,000 in revenue in Q1 2025 with over 3,200 agents using the platform:
The company’s expansion into ancillary services represents a significant opportunity to enhance margins and increase revenue per transaction. Real’s mortgage services target 45-50% gross margins, while title services aim for approximately 80% gross margins:
Forward-Looking Statements
Real Brokerage outlined its vision for future growth, describing a three-stage evolution from today’s software-based brokerage to an AI-driven consumer product with expanded financial services, and ultimately to a comprehensive ecosystem monetizing gross market value through mobile payments and wealth management tools.
A key near-term initiative is "Leo for Clients," an AI-driven solution expected in Q4 2024 that aims to simplify the homebuying process by transforming a complex multi-step journey into a streamlined experience.
The company’s agent value proposition continues to center on competitive commission splits (85%/15%), a unique revenue sharing model, and equity incentives:
CFO Ravi Jani emphasized the company’s focus on "driving execution, expanding margins, and allocating capital to create long-term value for agents, consumers, and shareholders." This aligns with statements from the Q4 2024 earnings call, where CEO Tamir Poleg stressed the company’s commitment to technology-driven solutions.
While Real Brokerage has demonstrated impressive growth, the company still faces challenges including persistently high mortgage rates that could dampen real estate activity, intense competition in the real estate technology sector, and potential market saturation. However, with less than 2% market share of the approximately 1.5 million U.S. real estate agents, significant room for expansion remains as the company continues to execute on its technology-driven growth strategy.
Full presentation:
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