The Real Brokerage Inc. Q1 FY2026 earnings call

Tamir covered Q1 results and Remax transaction. Jenna provided update on key brokerage initiatives like naming Jason Cassidy as Chief Growth Officer, headcount efficiency ratio at 85 to 1, beta-launch of HeyLeo with early data. Ravi walked through financials in detail.

Revenue was $466 million, up 32%. Operating loss was $3.4 million, improved by $1.8 million year over year. Adjusted EBITDA was $14.9 million, increased 80%. Unrestricted cash and investments balance increased by $13 million to a record $62.9 million in the quarter. North American brokerage segment had closed transactions up 25%. Ancillary revenue was $3 million, up 34% year-over-year. Real wallet revenue more than tripled year over year to $436,000. One real title revenue increased 22% in the quarter, operating 13 title joint ventures across 19 states and expecting to open Colorado in Q2. One real mortgage revenue increased 20% year over year.

Expect Q2 revenue to improve sequentially, consistent with normal seasonal patterns in the housing market. Gross margin will decline through the year as more agents reach their annual commission cap. Expect Q2 operating expenses to reflect a step up in acquisition-related costs but remain focused on managing fixed costs to deliver continued year-over-year improvement and adjusted EBITDA.

Housing market疲软 may impact business. Challenges in acquisition integration such as agent and franchisee retention, operational stability on day one, and realizing synergies.

Q: What kind of attach rates are you seeing from the agents who are part of the JVs?

A: We're seeing some JVs with attach rates of 40, 50%. We have seen a couple with as high as 80%.

Q: Just what you can share about the feedback you've received so far from Remax franchises on the deal?

A: Remax management has been working very closely with the Remax network and the franchisees and the initial feedback was a little bit of a mixed excitement and surprise but very quickly shifted to a lot of excitement.

Q: Can you speak about any of the early reads or concerns on agent perceptions around the combination with RE-MAX and if you think that might influence any significant churn in the population?

A: One of the first thing we did on that morning was to speak to our agent community and invite everybody to a town hall where we presented the transaction and answered a lot of questions. I think that overall there was just immense enthusiasm and excitement around the transaction.

Q: Can you talk a little bit about what the firm is doing to stimulate agent growth in markets with higher median sales prices?

A: We added Jason Cassidy as our chief growth officer about two months ago. So Jason is now overhauling the entire growth strategy. We're starting to do more outreach in the past. All of our agent growth has been organic and we've been fielding inbound inquiries and now we're starting to be a little bit more strategic in outreach and nurturing relationships with teams and individual agents in markets that we think are strategic for us.

Q: How will REEL increase revenue from the RE-MAX acquisition?

A: We believe that it starts with improving the value proposition for agents and franchisees. And by bringing tools like Reason and Leo AI, real wallet and our integrated services into the arsenal of Remax franchisees and agents, we believe we can help drive stronger agent attraction, retention, and franchise growth.

Q: Are you concerned about taking on debt, and what is the timeline to pay it down?

A: We're approaching leverage very conservatively, and we expect to reach the two times net debt to adjusted EBITDA by the end of the second full fiscal year following close.

Q: What is the plan to transition RE-MAX agents onto the real platform? Will there be any changes to the model?

A: Real and Remax are going to continue operating as distinct brands with their distinct models and value propositions. There's not going to be any forced migration of Remax agents or franchisees onto the Real model.

Q: What is the projected timeline to complete the acquisition of RE-MAX, and what are your three largest hurdles pertaining to the deal during this period of time?

A: On timeline, we are targeting a close in the second half of the year. The three biggest things we are focused on are ensuring agent and franchisee retention through the transition, operational stability on day one, and being laser focused on delivering the synergies.