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The Real Brokerage continued to recover from a challenging 2022 with the NYC-based company’s second-quarter performance, including growing revenues, slimming losses and a triple-digit percentage point increase in agent count.
During the three months ending on June 30, Real’s revenues grew 65 percent annually to $185.3 million, while net losses declined 2.3 percent year over year to $4.1 million. Real also saw its Adjusted EBITDA improve year over year from a $583,000 loss in Q2, 2022 to a $2.6 million profit in Q2, 2023.
Tamir Poleg, Real
“The second quarter was an inflection point for our company, with the achievement of adjusted EBITDA profitability earlier than anticipated, and I’m enormously proud of the work that our employees and agents have put in to get us here,” Real Chairman and Chief Executive Officer Tamir Poleg said in an earnings release on Wednesday.
Despite a fee raise in March that saw the fee for incoming agents rise 67 percent from $149 to $249 and saw the annual brokerage fee increase 50 percent from $500 to $750, Real said its recruitment and retention has remained strong.
The brokerage’s agent count grew 105 percent year over year from 5,600 in Q2, 2022 to 11,500 in Q2, 2023. The commission revenue per productive agent declined 16 percent year over year to $34,700 as the average transaction sides per productive agent declined 10 percent year over year to 3.4.
Despite intensifying market headwinds and a minimal decrease in the average transaction sides per agent, Real’s total transaction count increased 72 percent year over year to 17,537, with the total sales value of those transactions reaching $7 billion — a 66 percent increase from the previous year.
“Real now has an agent base that is more than twice the size it was a year ago, placing us in a strong position in the back half of the year,” Poleg said. “We are focused on executing Real’s mission to reinvent the way that consumers purchase homes, and I am excited to announce that we plan to release the first version of our new consumer app at our annual RISE conference in October later this year.”
Undeterred by a $20 million net loss in 2022, Real Brokerage spent the first half of the year rolling out tech updates and snapping up star executives and brokerage leaders. The company named Sharran Srivatsaa as its new president in late December and promoted Executive Vice President of Operations Jenna Rozenblat to chief operating officer on Thursday.
“Since joining Real earlier this year, Jenna has proven herself to be a forward-thinker who is quick to identify strategic opportunities aimed at driving Real forward in a rapidly evolving and challenging market,” Srivatsaa said of Rozenblat, who joined Real after three years at Orchard. “Her knowledge of the real estate industry and proven leadership skills will allow us to continue to accelerate our growth as we bring more agents onto our platform and better integrate our mortgage and title offerings.”
The company also made headlines after recruiting well-known luxury broker and Globl RED founder Kofi Nartey, whose 12-member team has a lifetime sales volume of more than $6 billion.
In his latest Inman CEO Connect appearance on Wednesday, Poleg said his company is “on fire” as it leverages the benefits of a virtual, low-fee brokerage model similar to that of eXp Realty.
“A lot of people compare Real with eXp because both companies are publicly traded, both companies adopted the marketing strategy of revenue share instead of paid advertising to attract agents,” he said. “We built the company in the way we thought was right.”
“We are on fire, we have more than 11,500 agents, two-and-a-half years ago we had about 1,000 agents,” he added. “We had a board meeting this morning and probably grew revenue by 7x in the past three years, and we are cash-flow positive.”
The company didn’t provide forward-looking guidance for Q3; however, Real announced they’ll be voluntarily delisting from the Toronto Stock Exchange on Aug. 11. The company will continue to trade on the Nasdaq Capital Market exchange under the REAX ticker.
