Tamir Poleg, founder and CEO, The Real Brokerage.
Illustration by Lanette Behiry/Real Estate News

Real reaches profitability milestone in Q2 

Despite a net loss of just over $4M, the company increased revenue by 65% and reported EBITDA profits for the first time, while also doubling agent count.

August 9, 2023
3 minutes

The Real Brokerage hit a significant milestone in the second quarter and continues to grow despite a slow real estate market.

In its earnings release today, the company reported adjusted EBITDA profitability in Q2, which was sooner than originally expected, said Chairman and CEO Tamir Poleg. The company also noted that its agent count more than doubled in the past year, reaching nearly 11,500.

While revenue and gross profit were up year-over-year, the company still reported a net loss of $4.1 million. That's a significant improvement from the first quarter, however, when losses totaled $7.4 million.

In an earnings call following the release of the report, Poleg said Real's model is extremely attractive for agents dealing with the slower market, which is one reason why they continue to add agents. 

"Agents are just looking for more cost-effective solutions that give them more value at a lower cost," Poleg said, adding that he is expecting more teams to join Real in the fall.

Investors reacted favorably to the earnings report, with the stock rising 15% to $1.83 a share in afternoon trading.

Key numbers

Revenue: $185.3 million, up 65% year-over-year, and more than $75 million higher than in the first quarter.

Gross profit: $17.8 million, up 81% vs. last year and an improvement over $10.8 million in Q1.

Cash and cash equivalents: $17.2 million in cash, not including $29.6 million of restricted cash associated with customer deposits, and an additional $10.9 million held in investments.

Net income/loss: A loss of $4.1 million in the second quarter vs. a $7.4 million loss in the first quarter and a $4.2 million loss in Q2 2022.

Adjusted EBITDA: A profit of $2.6 million, compared to a loss of $792,000 in the first quarter and a loss of $583,000 a year prior.

Transactions: 17,537, up 72% from Q2 2022. The total value of completed real estate transactions grew 66% year-over-year to $7 billion.

Agent count: Nearly 11,500 agents at the end of the second quarter, a 105% year-over-year increase.

What Real had to say

During the company's earnings call, Poleg said he had noticed an increase in new listings on Real's platform, which would be welcome news if it signals a national trend.

"I don't know if that's indicative of the future, but I think that as soon as we understand what the Fed is going to do with the rates… I think that we will see mortgage rates stabilizing and maybe even decreasing a little bit towards the end of the year," Poleg said.

Notable moves

Real announced its intention to voluntarily delist from the Toronto Stock Exchange. Shares will be delisted effective Aug. 11 and will continue to trade on Nasdaq Capital Market under the same ticker.

The company also highlighted the launch of Leo, its new AI-powered virtual concierge. Leo can answer agent questions in real time, which is expected to save agents time and make the existing support team more efficient.

The company is planning to publicly release its new consumer app at its annual conference in October.

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