REAX

Pending Merger with RE/MAX

• The shareholder vote on the RE/MAX transaction is scheduled for August 14, 2026, with closing expected in H2 2026 if approved and all closing conditions are met.
• The combination pairs RE/MAX's iconic global brand, deep local market expertise from productive agents and franchise owners with Real's modern AI-enabled technology platform, differentiated economic model, and track record of disciplined innovation.
• An integration management office has been established, cross-functional workstream leaders have been appointed, and third-party integration advisors have been engaged to support day-one readiness. Management remains confident in achieving $30 million in cost synergies within three years of closing.
• Integration priorities focus on preserving the core strengths of both organizations, delivering a seamless transition for all stakeholders, and combining the best capabilities of each firm.

Agent Growth and Operations

• Agent count reached ~35,350 at the end of Q2 2026, up 26% year-over-year, and exceeded 36,000 as of the call date, with a strong organic recruiting pipeline driven by entrepreneurial agents, teams, and independent brokerages seeking better technology and economics.
• A number of contract brokerage and compliance roles have been converted to full-time in-house positions to improve service delivery for agents, and to align employee incentives with ancillary service attach rate growth.
• The Canadian market continues to face macro headwinds, with per-agent transactions down 9% year-over-year, partially exacerbated by tough year-over-year comparisons from top-performing agents; aggregate Canadian revenue still grew on higher total agent count from new provincial expansion.

Technology Development

• Hey Leo 2.0, Real's updated AI relationship management platform for agents, is currently in beta launch, with new integrations for major third-party real estate CRMs that allow agents to activate and nurture existing dormant lead databases.
• Beta testing with over 200 top agents has returned overwhelmingly positive early feedback, with Leo already generating new client opportunities and appointments from dormant leads that had been inactive in agent databases for years. Full rollout to all agents will follow completed beta testing.
• Leo 2.0 will soon integrate embedded flows for Real's mortgage and title ancillary services, which management expects to drive future growth in high-margin ancillary revenue.
• Real has also built an internal AI automation team that has automated hundreds of internal workflows, saving thousands of hours of manual labor and supporting the firm's lean operating cost structure as it scales.

Financial Performance

• Real continued to gain market share in a persistently challenging low-volume housing market, with the balance sheet strengthened to a record $86.6 million in unrestricted cash and short-term investments, up from $49.9 million at the start of 2026.

• For the standalone Real business in Q3 2026, management expects normal seasonal patterns, with revenue and adjusted EBITDA declining sequentially from Q2 2026, and gross margin to be lower year-over-year, though the year-over-year decline will be smaller in magnitude than the drop seen in Q2 2026.
• Fee model changes taking effect in September 2026 are expected to support gross margin, with Q4 2026 gross margin expected to be relatively flat year-over-year.
• Assuming the RE/MAX transaction closes as expected, the Q3 2026 earnings call in November will provide a combined company baseline and preliminary 2027 guidance for the merged entity.
• Pro forma combined 2025 adjusted EBITDA for the two companies was approximately $160 million, which will increase to ~$190 million after the $30 million in committed run-rate cost synergies. Management frames this $190 million as a floor, not a ceiling, with upside from additional cost synergies, revenue synergies, and organic growth.
• The company's growth and profit expansion strategy does not rely on a housing market boom; management expects to continue growing market share regardless of macro market conditions, with a healthy market providing an additional upside benefit.

Real Brokerage operates two core revenue segments: core brokerage transactions and high-margin ancillary services. For Q2 2026, consolidated total revenue was $700.6 million, growing 30% year-over-year. Core brokerage revenue (from closed transactions) was $696.4 million, accounting for 99.4% of total revenue, with closed transactions growing 27% year-over-year to a record 62,380 units, average agent productivity improved 1% and average revenue per transaction increased 2% year-over-year. Ancillary revenue from Real Wallet, One Real Title, and One Real Mortgage totaled $4.2 million, representing 0.6% of total consolidated revenue, growing 28% year-over-year. Within ancillary services, Wallet revenue grew 140% year-over-year, Title grew 29%, and Mortgage grew 10%. Gross profit for the quarter was $58.3 million, up 22% year-over-year, with an overall gross margin of 8.3%. Adjusted EBITDA was $27.6 million, up 38% year-over-year, with an adjusted EBITDA margin of 3.9%, expanding from 3.7% in Q2 2025.

• Forward-looking statements (including merger synergy projections, integration timelines, and future financial performance) are subject to material risk of differing actual results, including risks related to merger approval, closing conditions, and integration execution, as detailed in Real's regulatory filings with the SEC and Canadian securities regulators.
• The residential housing market remains near historically low transaction volumes, creating a challenging operating backdrop that pressures per-agent productivity and gross margins.
• Increasing transaction mix shift to lower-margin capped agents (which is a deliberate trade-off to retain the firm's highest-producing agents) has driven a year-over-year decline in gross margin, presenting ongoing margin pressure in the near term.
• The Canadian residential market remains weaker than the U.S. market, with ongoing headwinds to per-agent productivity that impact overall consolidated performance.

Q: Has the pending RE/AX merger impacted the agent recruiting pipeline, and what is the current outlook for recruiting momentum? / A: After a slower start to 2026 in Q1, Q2 recruiting was more robust, and the RE/MAX deal has provided positive tailwinds, with more agents and teams proactively reaching out about joining Real. Q3 2026 has started very strongly, with agent count already over 36,000, and the pipeline holds several large potential opportunities that are expected to close before year-end. Management's current focus is on recruiting new agents from outside the combined Real-RE/MAX network while protecting existing RE/MAX franchise owners' businesses.

Q: When can investors expect a meaningful step-up in growth for the still-small high-margin ancillary mortgage and title businesses? / A: Mortgage is seeing particularly strong current momentum, with top agents increasingly opting into the origination program, and visible revenue growth is expected by late 2026 or early 2027. Title grew 30% year-over-year with high 45% attach rates within existing joint ventures (and up to 80% in top-performing regions), but overall company-wide attach rate for eligible transactions remains just 3.24%, so growth will come from adding more high-producing agents to JVs. The upcoming integration of mortgage and title sales flows into Leo 2.0 is expected to drive incremental ancillary revenue growth over time.

Q: What should we expect for the gross margin trend in the second half of 2026 after the Q2 year-over-year decline? / A: Gross margin will continue to be lower year-over-year in Q3, but the decline will not be as large as the Q2 drop. New fee model changes taking effect in September 2026 will flow through to results by Q4, and growth in ancillary revenue will also support margins, leading to Q4 2026 gross margin being roughly flat year-over-year. The ongoing shift to higher share of capped lower-margin transactions is a deliberate tradeoff to retain top agents, which management views as a net positive for long-term performance.

Q: As a RE/MAX franchise owner, what value will the merger create for my business? / A: The merger will preserve the successful RE/MAX franchise model and the strengths local franchise owners have built, while adding Real's modern technology, AI tools, and broader service suite to help attract and retain agents, improve productivity, and reduce complexity and costs by replacing multiple third-party point solutions. Franchise owners will also gain new opportunities to grow their economics through expanded access to Real's high-margin ancillary mortgage and title services, and can opt into Real's proven revenue share model to drive agent engagement.

Q: What is the outlook for the company's growth if the housing market does not rebound into a boom? / A: While a stronger housing market would benefit the entire industry, Real's strategy does not depend on a market rebound. Over the past three years of transaction volumes running ~20% below the 5.2 million annual U.S. average, Real has still delivered consistent organic growth by gaining market share, adding 5,000-10,000 new agents per year, growing ancillary adoption, and expanding margins with scale. These drivers are within management's control regardless of the macro environment, and growth will continue through gaining share of the existing market.