The cloud-based brokerage saw surprisingly positive second-quarter earnings results during a tough market. Real chairman and CEO Tamir Poleg said the results were a testament to the firm’s business model.
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The Real Brokerage’s revenue rose to a new high during the second quarter of 2024, increasing 82 percent year over year to $340.8 million, the firm announced in an earnings report released on Wednesday.
The brokerage’s gross profit also hit a new high, growing 79 percent year over year to $31.9 million.
Tamir Poleg, Real
Net losses improved, decreasing to $1.2 million, down from $4.1 million the year before. Loss per share. was $0.01, down from $0.02 during Q2 2023.
“Real achieved outstanding results in the second quarter, surpassing our own expectations and achieving new highs in Revenue and Gross Profit,” Tamir Poleg, Real’s chairman and CEO, said in a statement. “Our performance underscores the resilience and attractiveness of our business model, combined with the efficiencies enabled by our differentiated technology platform.”
Real President Sharran Srivatsaa added, “We were thrilled to announce the launch of the Real Luxury division and the Real Partners program this quarter. These initiatives, along with our ProTeams and Private label programs, were designed to attract even more agents to Real and to provide them with access to vetted vendors and partners, elevating the service we can offer our clients.
“As the industry prepares to implement the practice changes, we are doubling down on training and equipping our agents with the tools and skills they need to thrive in any market condition.”
Sharran Srivatsaa | The Real Brokerage
The firm’s total value of completed transactions hit $12.6 billion during the second quarter, up 80 percent year over year.
The number of transactions also saw an annual increase, growing by 73 percent to a total of 30,367 closed transactions.
Real’s agent count grew 70 percent year over year to 19,540 by the end of the second quarter. As of Wednesday, the firm tallied a total of more than 20,000 agents on the platform.
Operating earnings before interest, taxes, depreciation and amortization (EBITDA) was $14.0 million during the second quarter, up from $2.6 million the year before. Adjusted EBITDA excluded a $0.4 million litigation expense related to the settlement of antitrust litigation.
Michelle Ressler | The Real Brokerage
“We look forward to building on our strong first half results to deliver continued significant year over year growth and improved profitability in the balance of the year,” Real Chief Financial Officer Michelle Ressler said in a statement. “We will continue making necessary investments in our people and platform to support our rapidly growing agent base, deliver an exceptional experience, and ensure Real’s long-term success.”
In its previous quarter, the brokerage had set a new record for quarterly recruitment and saw revenue skyrocket 86 percent year over year.
On an earnings call Wednesday morning, it became apparent that Poleg’s voice was not at 100 percent.
“I lost my voice, but rest assured it has had no impact on our financial performance,” the CEO joked.
Poleg pointed to Real’s agent financial incentives, proprietary tech platform and culture as key factors driving the brokerage’s success. He said that the firm’s record revenue during the quarter was largely driven by a 73 percent increase in closed transactions.
Since macroeconomic factors negatively impacting the real estate market are out of the brokerage’s control, Poleg added that Real is focusing on those things they can control, like providing an “exceptional experience” for consumers and value for agents. The brokerage continues to build its ancillary revenue streams, including its mortgage and title insurance lines, which grew by 68 percent during the quarter.
The firm’s Real Wallet, a fintech product that combines debit and credit card functionalities for Real agents with rewards and other benefits, is also on track to launch later this year, Poleg added.
As Real navigates market challenges and changes to industry practices in the wake of the NAR settlement, Srivatsaa added during the earnings call, the brokerage is doubling down on agent training and support and has invested significantly in Real Academy thus far this year.
Reflecting on the firm’s 10-year history, Poleg said he was “incredibly proud” of what Real had accomplished, “but I am even more excited about what we will achieve in the next 10 years.”
As the dream of homeownership and heavy industry regulations remain constant in the next 10 years, Poleg anticipated that the things that will change in the industry include agents’ demand for more from their brokerage, a greater need for tech investment and the need for brokerages to find new ways to monetize transactions through additional revenue streams.
“We are excited about the future and appreciate your continued support on this journey,” Poleg said.
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