REAX — The Real Brokerage Inc.

Summary of REAX Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Q4 2025 Results:

  • Revenue: $505 million, up 44% year-over-year.
  • Gross Profit: $39 million, a 30% increase.
  • Net Loss: Narrowed to $4.2 million from $6.7 million in Q4 2024.
  • Adjusted EBITDA: Positive $14.2 million, a 56% increase.
  • Closed Transactions: 49,000, a 38% increase year-over-year.

• Full Year 2025 Results:

  • Revenue: Nearly $2 billion, up 56% from $1.3 billion in 2024.
  • Gross Profit: $166 million, a 44% increase.
  • Net Loss: $8.1 million, improved from $26.5 million in 2024.
  • Adjusted EBITDA: $62.9 million, up 57%.
  • Positive cash flow from operations: Approximately $66 million.

2. Strategic Updates and Business Highlights

• Agent Growth: Increased agent count by 31% to 31,739, now over 33,000.
• Ancillary Services:
  • OneReal Mortgage generated $6 million in revenue, up 50%.
  • OneReal Title generated $5 million, up 5%, with plans to expand joint ventures.
  • RealWallet generated nearly $900,000 in revenue, with a current run rate of $1.5 million.
• Technology Integration: Continued development of AI tools (LEO Copilot, HeyLeo) to enhance agent productivity and streamline operations.
• Operating Efficiency: Operating expenses grew only 25%, improving operating leverage.

3. Forward Guidance and Outlook

• Short-term Outlook: Expect Q1 2026 revenue, operating loss, and adjusted EBITDA to decline sequentially due to a slow start in January and February.
• Long-term Outlook: Anticipate continued organic growth outpacing the broader industry, with expectations for improved profitability metrics in 2026 as market conditions stabilize.

4. Challenges and Points of Concern

• Market Conditions: Existing home sales remain below long-term averages, impacting transaction volumes.
• Margin Pressure: A shift in transaction mix, particularly with capped agents, is expected to continue affecting margins in the first half of 2026.
• Transition Challenges: The shift from team-based to state-based joint ventures in the title business has created short-term revenue drag, with expectations for improvement later in 2026.

5. Notable Q&A Insights

• Agent Recruitment: The company remains optimistic about attracting agents despite industry changes, with plans to enhance technology offerings to support recruitment.
• Title Business Performance: Attach rates for title services are currently between 30% to 40%, with expectations for improvement as the transition stabilizes.
• Mortgage Initiatives: New leadership in OneReal Mortgage is expected to drive growth, with a strong pipeline of loan officers being developed.
• RealWallet Adoption: The company aims to increase agent adoption of RealWallet, which is seen as a critical retention tool.
• Competitive Landscape: Concerns about AI disruption in the industry were addressed, emphasizing the unique integrated platform REAX offers compared to independent tools agents might develop.

Overall, REAX demonstrated strong financial performance in 2025, with significant growth in revenue and agent count, while also facing challenges related to market conditions and operational transitions. The company remains focused on leveraging technology and expanding its service offerings to drive future growth.