Strong Revenue Growth
Consolidated revenue of $466 million, up 32% year-over-year, driven by North American Brokerage and a 25% increase in closed transactions (~42,000).
Real Brokerage
· REAX
May 7th, 2026
Summary
- Earnings Call Date:
- 2026-05-07
- Change Since:
- -20.63%
- Next Earnings Date:
- 2026-08-12
Earnings Call Sentiment
PositiveOverall the call conveyed strong top-line growth, sizable margin improvement on an adjusted basis, robust cash generation and clear strategic upside from the announced RE/MAX acquisition (large addressable scale and targeted synergies). There are manageable near-term execution and margin pressures — including gross margin headwinds from transaction mix, acquisition-related costs expected in Q2, early-stage ancillary revenue, and integration risks tied to the RE/MAX deal — but management articulated specific plans to scale ancillaries, deploy technology (reZEN/HeyLeo/Leo AI), realize $30M of synergies and de-lever post-closing. On balance, the positive operational and strategic momentum materially outweighs the short-term challenges discussed.
Company Guidance
Real offered no formal full-year guidance but said to expect sequential revenue growth in Q2 (seasonal), a near-term decline in gross margin as more agents hit annual commission caps (Q2 year‑over‑year margin pressure similar to Q1’s drop, then a more flattish YoY trajectory in the second half), and a material step‑up in Q2 operating expenses tied to RE/MAX acquisition activity that will be reported as non‑recurring; underlying cost discipline should continue to drive year‑over‑year improvement in adjusted EBITDA (Q1 adjusted EBITDA was $14.9M, +80% YoY) while ancillaries (ancillary revenue ~$3M, Real Wallet $0.436M, One Real Title +22%, One Real Mortgage +20%) provide a modest gross‑margin tailwind, the company expects the RE/MAX close in H2 and plans to de‑leverage to ~2.0x net debt/adjusted EBITDA by the end of the second full fiscal year following close.
Material Adjusted EBITDA and Operating Improvement
Adjusted EBITDA rose to $14.9 million, an 80% increase year-over-year (from $8.3M), while operating loss improved to $3.4 million (vs. $5.2M prior year), and operating margin improved from -1.5% to -0.7%.
Stronger Cash Position and No Debt
Unrestricted cash and short-term investments increased by $30 million during the quarter to a record $62.9 million; company continues to carry no debt and generated $23.3 million of operating cash flow in Q1.
Agent and Transaction Momentum
Agent count grew to ~33,500 at quarter end and >33,900 as of May 6; closed transactions increased ~25% year-over-year despite a weak housing market, demonstrating agent recruitment/retention strength.
Ancillary Business Traction
Ancillary revenue grew 34% YoY to $3 million. Real Wallet revenue more than tripled to $436,000 (nearly +250% YoY), with 8,000 active agents (23% of base), weekly debit-card spend >$1M, deposits >$25M and ~$9M of credit extended; One Real Title revenue +22% YoY and One Real Mortgage revenue +20% YoY.
Compelling Strategic M&A Opportunity (RE/MAX)
Announced definitive agreement to acquire RE/MAX (enterprise value ~ $880M). RE/MAX generated ~$94M of high-margin adjusted EBITDA in 2025; transaction implies ~9x trailing Adj. EBITDA (~7x post-synergies). Management targets $30M of cost synergies and meaningful cross-sell upside (700k combined U.S. transactions; estimates that a 1% mortgage attachment = ~$25M revenue and 1% title attachment = >$10M revenue).
Operational Efficiency Gains
Operating expenses increased 17% YoY to $45.6M but improved as a percentage of revenue to 9.8% from 11.1% a year ago (down ~130 bps), reflecting operating leverage and disciplined cost growth.
Product and Technology Rollouts
HeyLeo beta launched (450 agents in beta, 4,500 on waitlist) with 357 MLS ingested (on track to 400+), covering >85% of agent geographies; reZEN and Leo AI positioned as integration levers for agent productivity and lead monetization.
Operator
Good morning, ladies and gentlemen, and welcome to the Real Brokerage First Quarter Ended March 31, 2026, Earnings Call. [Operator Instructions] I will now turn the call over to Alexandra Lumpkin at The Real Brokerage. Ma'am, the floor is yours.
Alexandra Lumpkin
Thanks, and good morning. Thank you for standing by, and welcome to the Real Brokerage Conference Call and Webcast for the first quarter ended March 31, 2026. We appreciate everyone for joining us today. With me on the call today are Tamir Poleg, our Chairman and Chief Executive Officer; Jenna Rozenblat, our Chief Operating Officer; and Ravi Jani, our Chief Financial Officer. This morning, Real published an earnings press release, including results for the first quarter ended March 31, 2026. The press release, along with the consolidated financial statements and related Management's Discussion and Analysis for the quarter have been filed with the U.S. Securities and Exchange Commission on EDGAR and with the Canadian securities regulators on SEDAR. Before we get started, I'd like to remind everyone that statements made on this conference call that are not historical facts, including statements about future time periods, may be deemed to constitute forward-looking statements.
Our actual results may differ materially from these forward-looking statements and the risk factors that could cause these differences are detailed in our Canadian continuous disclosure documents and SEC reports. Real disclaims any intent or obligation to update these forward-looking statements, except as expressly required by law. With that, I'd like to turn the...
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