Real Brokerage (REAX) Q4 2025 Earnings Transcript

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DATE

Wednesday, March 4, 2026 at 8 a.m. ET

CALL PARTICIPANTS

• Chairman and Chief Executive Officer — Tamir Poleg
• Chief Operating Officer — Jenna Marie Rozenblat
• Chief Financial Officer — Ravi Jani

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TAKEAWAYS

• Revenue -- $505 million in the fourth quarter, up 44%; nearly $2 billion for the year, an increase of 56%.
• Closed transactions -- Increased 38% in the fourth quarter to nearly 49,000, significantly outpacing the 1% industry increase.
• Gross profit -- $39 million in the fourth quarter, up 30%; $166 million for the year, up 44%.
• Net loss -- Narrowed to $4.2 million in the fourth quarter and $8.1 million for the year, from $6.7 million and $26.5 million, respectively.
• Adjusted EBITDA -- $14.2 million in the fourth quarter, up 56%; $62.9 million for the year, a 57% increase.
• Operating expenses -- $44 million in the fourth quarter, up 22%; $175 million for the year, up 25%.
• Operating loss -- Improved to $5.2 million in the fourth quarter and $9.2 million for the year, from $6.4 million and $25.2 million, respectively.
• Revenue churn -- Improved to 1.6% in the fourth quarter, from 1.8% in the prior year.
• Gross margin -- Fourth quarter margin was 7.7%, down from 8.6%; full year at 8.4%.
• Cash flow from operations -- $66 million generated for the year.
• Shareholder returns -- Returned $39 million through buybacks, including $15 million in the fourth quarter.
• Liquidity -- $49.9 million in unrestricted cash and investments, with no debt.
• Agent count -- Ended the year with 31,739 agents, up 31%; currently over 33,000.
• Ancillary revenue -- $3.2 million in the fourth quarter, up 24%; $11.9 million for the year.
• RealWallet -- Generated $339,000 in the fourth quarter (eight times the launch quarter); $900,000 for 2025 at a 77% gross margin; $23 million in agent deposits and $8 million in extended credit lines.
• OneReal Mortgage -- $6 million revenue in 2025, a 50% increase; over 100 loan officers by year-end.
• OneReal Title -- $5 million revenue, up 5%; operating 13 state-based joint ventures across 17 states; attach rates of 30%-40% within joint ventures.
• AI platform highlights -- LEO Copilot engaged over 700,000 times since launch; LEO answered more than 20,000 support inquiries (46% of support volume).
• Adjusted operating expense per transaction -- Decreased 22% year over year to $440 from $565.
• First quarter 2026 outlook -- Management expects sequential declines in revenue, operating loss, and adjusted EBITDA from the fourth quarter of 2025 due to seasonally slow January and February.
• Agent retention tools -- LEO, RealWallet, and platform features highlighted as key to reducing agent churn.
• Stock-based compensation -- Declined by 80 basis points as a percent of revenue in the fourth quarter.

RISKS

• Chief Financial Officer Ravi Jani stated, "January and February saw an unseasonably slow start to the year. Volatile weather and historic snowstorms across much of the country impacted transaction velocity during the first two months. Consequently, we expect first quarter revenue, operating loss, and adjusted EBITDA to decline sequentially from fourth quarter 2025 levels."
• Gross margin decreased to 7.7% in the fourth quarter from 8.6% due to a 400-basis-point increase in post-cap agent transactions, which carry lower margins.
• OneReal Title's growth was constrained by a model transition and leadership changes, with management acknowledging the need for improvement: CEO Tamir Poleg said, "We are not happy with the performance in 2025. We understand that it was a transition year."
• Operating expenses included $750,000 related to the settlement of the CoinArc class action lawsuit.

SUMMARY

The Real Brokerage (NASDAQ:REAX) delivered accelerated revenue and transaction growth that outpaced a subdued housing market, while achieving notable gains in profitability and maintaining a debt-free, highly liquid balance sheet. Strategic investments in proprietary AI tools, agent productivity features, and ancillary services scaled engagement and reduced churn, contributing to increased operating leverage across the platform. Ancillary businesses—mortgage, title, and RealWallet—expanded meaningfully, diversifying revenue streams and supporting future margin expansion. Management signaled upcoming enhancements to agent attraction and attach rates for ancillary products, but set expectations for near-term revenue and profitability declines due to seasonal and weather-related headwinds in early 2026, while maintaining long-term confidence in the business model and growth trajectory.

• Agent platform adoption is accelerating, with proprietary tools like LEO Copilot becoming integral to daily agent workflows and support processes.
• Management highlighted that the core brokerage segment is near breakeven, with consolidated losses primarily attributable to upfront investment in ancillary businesses.
• Buybacks continued as a key capital allocation lever to offset equity dilution, supported by strong cash flow from operations.
• Leadership expects title and mortgage attach rates to rise, particularly as newly onboarded loan officers become fully productive and further integration with agent-facing AI tools is rolled out.
• Operational improvements—such as automation of compliance and transaction workflows—are reducing manual processes and enabling profitability to scale faster than headcount.

INDUSTRY GLOSSARY

• Attach rate: The proportion of brokerage transactions that include an ancillary service, such as title or mortgage, cross-sold by the platform.
• Cap/post-cap agent: An agent who has met a pre-set commission contribution threshold, after which the agent retains a higher share of future commissions, reducing brokerage gross margin on those transactions.
• LEO Copilot: The Real Brokerage's proprietary AI-driven agent assistance tool integrated within its transaction platform.
• Joint venture (JV): A business arrangement in which The Real Brokerage partners with agents or entities, typically for title operations, to share revenues and risks within a specific state or region.
• RealWallet: The company's fintech platform offering agents cash management, payments, and lines of credit features.

Full Conference Call Transcript

Tamir Poleg, our Chairman and Chief Executive Officer; Jenna Marie Rozenblat, our Chief Operating Officer; and Ravi Jani, our Chief Financial Officer. This morning, The Real Brokerage Inc. published an earnings press release including results for the fourth quarter and full year ended 12/31/2025. The press release, along with the consolidated financial statements and related management's discussion and analysis for the full year ended 12/31/2025 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 would 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. The Real Brokerage Inc. disclaims any intent or obligation to update these forward-looking statements except as expressly required by law. With that, I will now turn the call over to Chairman and Chief Executive Officer, Tamir Poleg. Tamir, please proceed.

Tamir Poleg: Thank you, Alex, and good morning, everyone. 2025 was another transformational year for The Real Brokerage Inc., and our fourth quarter results provided a strong finish. In the fourth quarter, we grew closed transactions by 38% to nearly 49,000, significantly outpacing the broader existing home sales market. This volume drove revenue growth of 44% to $505 million and a 30% increase in gross profit to $39 million. Net loss narrowed to $4.2 million, while adjusted EBITDA was positive $14.2 million, a 56% year-over-year increase. Looking at the full year, revenue grew 56% to nearly $2 billion, while our gross profit growth of 44% significantly outpaced the 25% increase in operating expenses.

This discipline resulted in a substantial improvement in our GAAP net loss to $8.1 million, while adjusted EBITDA reached $62.9 million, up 57% from last year. Furthermore, our model generated positive cash flow from operations of approximately $66 million, allowing us to return $39 million to shareholders through buybacks, while maintaining a debt-free balance sheet with $50 million in liquidity. We ended 2025 with 31,739 agents on our platform, up 31% year over year, and today, that number has grown to over 33,000. These results would be impressive in any environment, but are notable given the broader housing backdrop.

Existing home sales remain well below long-term averages, transaction volumes across the industry remain constrained, and many market participants are waiting for macro improvement. Meanwhile, our growth continues to be driven by structural factors: a powerful agent-attraction flywheel, improving agent productivity, and ever-increasing agent engagement and retention on our platform. That distinction is important. At the same time, we continue to make steady progress expanding beyond brokerage into ancillary products and services tied to the housing ecosystem and transaction life cycle. To that end, OneReal Mortgage generated $6 million in revenue in 2025, up 50% year over year, driven by increased loan officer growth and productivity.

In January, we were pleased to welcome Kate Gurovich as CEO of OneReal Mortgage and look forward to seeing accelerating growth and improved profitability under her leadership. OneReal Title generated $5 million in revenue, up 5% from 2024, as we began transitioning our model toward more scalable state-based joint ventures. Today, OneReal Title operates 13 joint ventures with operations across 17 states, and we expect to open three additional joint ventures in 2026. And RealWallet, which completed its first full year, generated nearly $900,000 of revenue with 77% gross margins, with its current run rate approximately $1.5 million. Importantly, today, more than 7,000 agents are actively using Wallet with approximately $23 million in deposits.

We view Wallet not only as a revenue opportunity, but as a deeper integration point with our agents' daily financial workflows. While brokerage remains the core engine of the business, these ancillary services represent the next layer of value creation. They increase engagement and improve and expand revenue and gross margin per transaction. Over the past decade plus, we have been focused on building an integrated platform, aligning agent economics, investing in proprietary technology, and expanding our ecosystem of products and services. In 2025, we saw clear evidence that this model can scale while improving operating leverage. We are not managing a collection of disconnected tools or regional systems. We are operating one unified platform across North America.

That consistency is what allows us to improve the system year after year. With that, I will turn it over to Jenna.

Jenna Marie Rozenblat: Thanks, Tamir, and good morning. As Tamir noted, 2025 was another transformational year. Revenue increased 56%, gross profit increased 44%, and operating expenses increased only 25%. That operating leverage reflects the structural foundation of our business. Everything starts with Reason, which is our proprietary transaction management platform. Every transaction, every document upload, every compliance step, and every commission payout flows through that single system of record. With all 33,000 agents operating inside one platform, we benefit from standardized workflows and structured transaction data across our entire network. That unified foundation allows us to embed AI directly into live transaction workflows and deploy enhancements at scale. We are not layering standalone tools on top of fragmented systems.

Instead, we are integrating intelligence into the core operating system of the brokerage. Let me give a few practical examples. First, agent productivity. LEO Copilot is our intelligent assistant embedded directly inside Reason. It provides agents real-time guidance on transaction status, commissions, next steps, and even marketing assets. Since its launch in 2023, agents have engaged with LEO over 700,000 times. It has become an essential part of their daily workflow. Second, support and compliance. Last summer, we made LEO the first line of support across email and phone. Since then, LEO has answered more than 20,000 support inquiries, or approximately 46% of total support volume.

That success rate improves responsiveness for agents while reducing incremental support headcount as we scale. We also introduced LEO Voice Broker, an automated broker review to enhance compliance oversight. Automated broker review uses AI to review documents as they are uploaded, identifying missing information or inconsistencies before they reach a human broker. That reduces back and forth, shortens approval cycles, and allows brokers to focus on more complex issues rather than routine checks. Third, internal automation. Beyond agent-facing tools, we are increasingly deploying AI agents and workflow automations to replace repetitive manual tasks across brokerage operations, finance, transactions, support, and enablement.

For example, we have automated significant portions of our ready-to-close transaction workflows, reducing manual intervention across a growing share of transaction types. And we have also standardized processes such as refund coordination, commission calculations, and bulk document retrieval, replacing multistep spreadsheet- and ticket-based workflows with structured, system-driven processes. While these initiatives may not be visible externally, they reduce friction, improve auditability, and prevent headcount from scaling linearly with transaction volume. Over time, these improvements compound. That is what makes the leverage durable. And last, but certainly not least, in the fourth quarter, we extended HeyLeo.com, our unified platform, to the consumer. HeyLeo is our AI-powered consumer portal where home buyers converse with intelligent agents to find their next property.

This is not just a search site. It is a full AI Relationship Manager, or AIRM, that provides each of our agents with a customized web portal, a dedicated SMS phone line, and a dedicated HeyLeo email address. The power of HeyLeo lies in its Atlas skill layer. It is backed by comprehensive MLS data, 180 integrations today and a target of 400 integrations by July, and nationwide school and neighborhood insights. Whether a buyer is texting a question about a school zone or emailing about a kitchen layout, the AI provides instant data-backed responses. It can even schedule showings directly on the agent's calendar.

By providing this 24/7, omnichannel engagement, we are giving our 33,000 agents a one-to-many scaling advantage. While HeyLeo remains in beta, it represents a critical link in our goal to streamline the entire transaction life cycle from the first consumer click to the final commission payout. Taken together—agent productivity, compliance, back-office efficiency, and now HeyLeo’s consumer engagement—we believe we have developed a structural advantage that is scalable, durable, and economically meaningful. I will turn it over to Ravi.

Ravi Jani: Thank you, Jenna, and good morning, everyone. Our 2025 results reflect another year of significant growth and improving operating leverage, even as our results were impacted by a shift in our transaction mix. Consolidated revenue for the fourth quarter rose 44% to $505 million, contributing to full year revenue of nearly $2 billion, a 56% increase from $1.3 billion in 2024. This performance was led by our North American brokerage segment, where closed transactions increased 38% in the fourth quarter. This significantly outpaced the broader existing home sales market, which saw only a 1% increase in the same period.

This performance was all organic and reflects our continued success in attracting high-producing agents and teams to The Real Brokerage Inc. platform. We also saw continued momentum in our ancillary businesses. Ancillary revenue in the fourth quarter rose 24% year over year to $3.2 million and reached $11.9 million for the full year. This includes RealWallet, which generated $339,000 in the fourth quarter, an 8x increase from its launch quarter a year ago. We believe the continued expansion of these services represents a meaningful long-term opportunity to diversify our revenue base and enhance our margin profile.

Gross profit for the fourth quarter was $39 million, up 30% year over year, bringing our full year gross profit to $166 million, an increase of 44%. Our fourth quarter gross margin was 7.7% compared to 8.6% in the prior-year period, while our full-year margin was 8.4%. The year-over-year change is primarily a function of our evolving mix. In the fourth quarter, we saw a 400-basis-point increase in the proportion of transactions completed by agents who have reached their annual commission cap. While these post-cap transactions carry a lower margin for the brokerage, they are a core element supporting agent retention, evidenced by our revenue churn improving to 1.6% in the fourth quarter, down from 1.8% in the prior year.

We believe maintaining a best-in-class retention profile is fundamental to our long-term competitive position. Based on our current outlook, we expect this transaction mix shift to continue in 2026; however, we anticipate margins will ultimately normalize as market activity improves and transaction growth becomes more evenly distributed across our broader agent base. Over time, we expect ancillary businesses and platform efficiencies to support further gross margin expansion. A highlight of our 2025 performance was the continued decoupling of our expense base from our revenue and gross profit growth. In the fourth quarter, operating expenses grew 22% to $44 million, while gross profit grew 30%.

Operating expense in the quarter includes $750,000 related to an agreement to settle the CoinArc class action lawsuit on a nationwide basis. For the year, we limited operating expense growth to 25%, for a total of $175 million against a 44% increase in gross profit. The largest driver of our OpEx increase remains marketing—specifically revenue share and agent equity compensation—which scale directly with our transaction volume. As a percent of revenue, operating expenses improved by 160 basis points to 8.8% in the fourth quarter and by 220 basis points for the full year to 8.9%.

Our adjusted operating expense, which is a non-GAAP metric that reflects our fixed cash overhead, improved to 4.3% of revenue, down from 5.7% in the prior-year period. On a unit basis, our adjusted OpEx per transaction declined 22% year over year to $440 in 2025, down from $565 in the prior year, further validating the scalability of our platform. Importantly, this operating leverage drove improvements across our profitability metrics. Operating loss improved to $5.2 million in the fourth quarter compared to $6.4 million in 2024, while full-year operating loss narrowed to $9.2 million from a loss of $25.2 million in 2024.

Net loss improved to $4.2 million in the quarter and $8.1 million for the full year, compared to a net loss of $6.7 million and $26.5 million for the respective prior-year periods. Adjusted EBITDA rose 56% to $14.2 million in the fourth quarter and reached $62.9 million for the full year, a 57% year-over-year increase from 2024. The Real Brokerage Inc. generated $66 million in cash flow from operating activities for the full year and returned $39 million to shareholders via share repurchases, including $15 million in the fourth quarter. We ended the year with $49.9 million in unrestricted cash and investments, and we continue to carry no debt.

Our capital allocation strategy remains disciplined, focused on maintaining ample liquidity to fund our organic growth while retaining the flexibility to return capital to shareholders and evaluate strategic M&A. Regarding our outlook, we are not providing formal guidance at this time. In the near term, as others in the industry have noted, January and February saw an unseasonably slow start to the year. Volatile weather and historic snowstorms across much of the country impacted transaction velocity during the first two months. Consequently, we expect Q1 revenue, operating loss, and adjusted EBITDA to decline sequentially from Q4 2025 levels. However, on a full-year basis, we expect the fundamental trends of organic growth significantly outpacing the broader industry to persist.

We also remain confident in our ability to drive revenue and gross profit growth at a faster rate than operating expenses, which should result in year-over-year improvements in both GAAP and non-GAAP profitability metrics for the full year 2026. More details on our results and key operating metrics can be found in the earnings press release and investor presentation that accompany this call. I will now turn it back to Tamir.

Tamir Poleg: Thank you, Ravi, and thank you, Jenna. Let me close with a broader perspective on the business we are building. Real estate is among the world's largest and most complex asset classes. A single transaction involves a convergence of buyers, sellers, agents, lenders, attorneys, regulators, and multiple sources of capital. It often involves leverage and requires compliance that varies across jurisdictions. And for most consumers, it happens only a handful of times in their lives. That combination—high value, high complexity, and low frequency—makes trust and infrastructure critically important. When we started The Real Brokerage Inc., our goal was not to build a better brokerage. It was to reinvent the model entirely—economically, technologically, and culturally.

Traditional firms were built on physical infrastructure and overhead, with technology as an afterthought. We chose a different path. We aligned our economics with agents, built a unified system for the entire transaction life cycle, and we focused on culture by treating our agents as long-term partners. The brokerage was our starting point, but the platform is our destination. Our platform today encompasses a massive funnel of high-value transactions. By building a platform that productive agents never want to leave, we earn the right to serve them more deeply across mortgage, title, fintech services, and now consumer engagement. These are not opportunistic add-ons.

They are integrated components of our flywheel: attract productive agents, process transactions with unmatched efficiency, improve infrastructure with every deal, retain through alignment and value, and ultimately capture more of the transaction life cycle as the ecosystem matures. What makes this model resilient is not just our code, but the compounding advantages of a scaled network, years of platform development localized down to the municipality level, and the massive volume of structured data we capture with every transaction. In 2025, we proved the model. We reached nearly $2 billion in revenue and over 185,000 transactions, all while generating meaningful cash flow, achieving our first quarter of GAAP profitability, and strengthening our balance sheet in a constrained housing environment.

We cannot control the macro environment, but we can control our vision, our execution, and our discipline. We believe the opportunity ahead remains significant. Thank you to our agents, employees, and partners for your belief in The Real Brokerage Inc. We are still in the early innings, and we are building this to endure.

Operator: Thank you. We will now open for questions. If you have any questions or comments, please press 1 on your phone at this time. We do ask that while posing your question, please pick up your handset if you are listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press 1 on your phone. Your first question is coming from Stephen Sheldon from William Blair. Your line is live.

Stephen Sheldon: Hey, thanks. Good morning. First, I think I have probably asked this most times. I just wanted to ask about the agent recruiting environment and pipeline. There are a lot of changes in the industry, especially with the Compass-Anywhere merger. So are you seeing that create any more opportunity to attract agents, and are you seeing any pickup in agent interest to join since you announced some of the AI initiatives late 2025?

Tamir Poleg: Hi, Stephen. There are a lot of moving parts right now in the industry and a lot of uncertainty for many agents. I think that when it comes to us, we still have a very strong pipeline. We have not tried to be opportunistic with approaching teams or agents that were part of some mergers in the industry. We believe in our value and believe that we should not rely on just occasions in the industry in order to attract agents. So the pipeline is strong. We think that there is an opportunity to double down even more on agent attraction, and in the coming weeks, we will announce some exciting things around that.

We also think that the technology that we will be introducing later this year will help us attract agents even at a faster pace. So we are still very optimistic about our ability to continue and grow the way we have been in recent years.

Stephen Sheldon: Got it. Good to hear. And then a follow-up on the title side, great to hear that you have more states opening. It sounds like three more on top of the current 13. How should we be thinking about the trajectory of title in 2026, especially as you move past the headwind from switching from team- to state-based JVs?

Tamir Poleg: Sure. So 2025 was a transition year. We did a change in leadership at the beginning of 2025, and then we transitioned from team-based JVs to state-based JVs, and now we are starting to see the fruits of that labor. We are also doubling down on focusing on non-teams or any agent with 10 to 20 transactions within those 13 states. So we think that in the coming month and couple of quarters, we will see a significant movement. We are not happy with the performance in 2025. We understand that it was a transition year, but it is time for us to start seeing the signals of that growth.

So it takes time, but I think that we have the right model and the right leadership in place, and we will start seeing the signs later this year.

Stephen Sheldon: Good to hear. Thank you.

Operator: Thank you. Your next question is coming from Naved Ahmad Khan from B. Riley. Your line is live.

Naved Ahmad Khan: Great. Thank you very much. So, two questions from me. Maybe one just building on the title. Can you maybe quantify the drag from the transition that you had in the fourth quarter from transitioning from the old structure to the state-level JVs? And then I think on the last earnings, you had shared some data points about the attach rate that you were seeing in some of these markets that are transitioning over. Can you maybe share some color on how these are progressing? Are you seeing continued improvement in attach rate where markets have transitioned over? And the second question I had was on mortgage.

Now you have more than, I guess, more than 100 loan officers, and you also introduced the consumer-facing video to help with driving attach for mortgage. What are the early results from these initiatives that you are seeing? Thank you.

Tamir Poleg: Thank you, Naved. So on title, the attach rates that we have been seeing in the past couple of months are between 30% to 40% within the JVs. We want to see those percentages grow even further, and we also think that there is potential to expand those JVs and invite more agents and focus on the highest-producing agents, and those are efforts that are taking place right now. It takes a little bit of time to have those conversations with the agents and teams and get them signed up, and then earn their deals and move from there. This is why it is taking a little bit of time.

But we would like to see the attach rates go beyond where they are right now in the short term. On mortgage, as you know, we brought in Kate as the new CEO of OneReal Mortgage a month and a half ago. We have a very strong pipeline of productive agents that are in the process of getting licensed as loan officers and, obviously, they will be a part of our loan officer base. So I think that within a couple of months, when they ramp up and start sending their deals, we will see an uptick in mortgage.

We are very happy with the impact of Kate’s actions so far, and I think that they will have a very positive effect on revenue later on this year. So I think that mortgage is really on the right track. When it comes to LEO, what we are now doing is trying to experiment with AI technology that helps our agents nurture and convert leads in the background without them doing too much. And we think that will also help us drive mortgage and title. It is still in the early days. It is alpha tests, but it is showing very promising signs.

So I am very optimistic about our ability to attach ancillary services through technology, and I think that LEO will become an integral and essential part of a transaction for many of our agents in the very near future.

Naved Ahmad Khan: Okay. And then can you maybe just quantify the drag from the transition in the title side, moving from entity- to state-level JVs?

Ravi Jani: Sorry, I can take that one. It was similar to last quarter. It was in the neighborhood of a couple hundred thousand dollars of revenue from JVs that existed in the prior year that were wound down and have not ramped back up. And importantly, on the point of how we expect title to grow throughout the year, we would expect to see growth reaccelerate as we lap some of those transitions. So we should be back to double-digit and solid double-digit growth as the year progresses.

Jenna Marie Rozenblat: Excellent. Thank you.

Naved Ahmad Khan: Thank you.

Operator: Your next question is coming from Matthew Erdner from JonesTrading. Your line is live.

Matthew Erdner: Hey, good morning. Thanks for taking the question. I know you touched a little bit on the capped agents and the roughly 400-basis-point increase. Where do you expect margins to normalize once we work through, call it, the slug of the market where a lot of the capped agents are winning transactions?

Ravi Jani: Thanks, Matt, for the question. I think we are at a point where, while we expect this mix shift to probably continue in the first half, as we get into the second half of the year, some of the fee model changes we announced last year start to manifest, and we start to see ancillary reaccelerate, we should be at a point where we are seeing less or no drag on margins as we get to the second half. But just given where we ended 2025 and entered 2026, we expect to see this mix shift dynamic in the first half, and then that should level off.

And I think the important thing to keep in mind is that while we are focused on the margin rate, we are also focused on the gross profit dollars and our ability to grow the gross profit dollars faster than we grow OpEx, which we proved throughout 2025. And so we are mindful of the margin, and we have taken corrective action on that front. But importantly, we are controlling what we can control on the fixed OpEx side as well, and so that should translate to improved bottom line.

Matthew Erdner: Got it. That is helpful there. And then last one for me, I will keep it short here. What are you looking for in terms of greater adoption on the Wallet side and growing that overall deposit base?

Tamir Poleg: It is a combination of a couple of things. We have about 7,000 agents on the Wallet, and we want to see more agents utilizing Wallet. We think that there are ways to push agents to adopt Wallet even further, and we are contemplating those actions. We will probably see them later on this year. At the same time, one of the biggest drivers of revenue to Wallet is Real Capital, and Real Capital expands to more and more states. I think that we are currently in 20 or 21 states, so we still have a long way to go there.

As we see more states opening up and more agents having lines of credit available to them, we will see more revenue driving into Wallet.

Matthew Erdner: Got it. That makes sense. Thank you.

Operator: Thank you. Thanks, Matt. Thank you. And once again, everyone, if you have any questions or comments, please press star then 1 on your phone. Your next question is coming from Nick McAndrew from Zelman. Your line is live.

Nick McAndrew: Hey, thanks. My questions—maybe one on the churn side of things to start. I think agent churn has improved pretty dramatically in just the back half of the year to the mid-single digits. I am wondering how much of that is attributable to ancillary products like RealWallet and maybe the credit lines that are creating switching costs for agents versus how much of this is simply better agent quality coming in the door? Thank you.

Tamir Poleg: Thank you, Nick. It is a good question, and I think that our performance on agent retention is especially remarkable given all of the dynamics in the market and the fact that agents are really hurting right now. I think that everything that we release—LEO, Wallet, all of the features, all of the technology that we offer agents—adds an incremental way to value the platform. So the more services we offer, the harder it gets to leave the platform. Obviously, if you have a line of credit from The Real Brokerage Inc., it is really difficult to give that up.

If you have LEO available to you, and you can ask questions and get immediate answers and get all of your files reviewed within seconds, it is really difficult to step away from that. So I think that all of those just add up to a platform that is really, really attractive for agents.

Nick McAndrew: Thanks, Tamir. That is helpful. And maybe following up on that, I think there has been some level of multiple compression in a lot of software names across the space that has been driven by concerns around agentic AI disruption. I am curious if you can reiterate how you think about the tech stack relative to peers. But even more broadly, as AI tools become increasingly accessible, is there any risk that agents start building or adopting their own tools independently, or do you view all of these agentic AI developments as just a net opportunity for The Real Brokerage Inc. platform?

Tamir Poleg: Obviously, we see that as an opportunity. And if you look at our financial performance, you can see that the numbers speak for themselves. At the same time, we also see a huge opportunity in the implementation of AI and the fact that a lot of the things that agents do can be helped with AI. I do not think that agents can figure all of that on their own. I think that it is important to have an integrated system where all of the information is in one place, and AI has access to all of your documents, all of your past performance, all of your financials, all of your conversations. It makes the AI substantially more efficient.

And this is what we are trying to build. I think that agents on their own will never have the ability to build something as powerful as what we are building for them. So for us, we will continue to invest, and we just want to create an unfair advantage for agents, and it is starting to happen these days.

Alexandra Lumpkin: Alright. Well, thanks for the question, Nick. Now that we have concluded the analyst portion of the call, Matthew, are there any more questions in the queue?

Operator: Certainly. There are no further questions in the queue.

Ravi Jani: Great. Well, now that we have concluded the analyst portion of the call, we wanted to address some of the questions we received from shareholders on the SAIT Technologies Q&A portal that was opened last week. We received a number of excellent questions, and so thank you to all who participated. First question for Tamir: When do you expect The Real Brokerage Inc. to turn a profit, and is there anything shareholders can do to help The Real Brokerage Inc. become profitable?

Tamir Poleg: Thank you for the question. It is important to understand that for a company with our growth profile and capital efficiency, profitability is largely a strategic choice. Many of our peers are currently posting much steeper losses despite having significantly larger agent bases, which we believe validates the superior efficiency of our model. To give some context, our largest segment, North American brokerage, was nearly breakeven in the full year of 2025. The significant majority of our consolidated loss currently reflects our ancillary businesses, where we are deliberately choosing to invest today because we believe the long-term returns will be substantial.

As for what shareholders can do to help, the most direct way to support our path to profitability is to engage with our ecosystem. If you are buying or selling a home, work with a Real agent, utilize a OneReal Mortgage loan officer, and choose OneReal Title for your escrow and title services. Increasing the attach rates of these services directly fuels our highest-margin revenue streams and significantly accelerates our timeline to consolidated profitability.

Ravi Jani: Thanks, Tamir. The next shareholder question is: Do you anticipate stock-based compensation to continue to scale at around the same pace as cash flow, or will it level out or decrease at some point? I appreciate the opportunity to clarify our approach to equity. First, it is important to note that nearly all of our agents’ equity awards are tied directly to production, and so we do not write large upfront checks or offer guaranteed signing bonuses. Equity is primarily earned only when a transaction closes or an agent reaches their production-based milestone, such as hitting their annual cap or achieving Elite status. And we are already seeing some natural leverage in the model as we scaled.

In the fourth quarter specifically, stock-based compensation as a percentage of revenue declined by 80 basis points year over year. As we continue to grow revenue and gross profit faster than our fixed headcount, we would expect this leverage to continue, reducing stock-based compensation both as a percentage of sales and free cash flow over time. You have seen that over the past few years. With all that said, we remain highly mindful of dilution, which is why we have a buyback program in place to offset it. And given where our stock is currently trading, we are pleased to be in a position where we have excess cash available to repurchase shares.

Ravi Jani: Last shareholder question for Tamir: Can you talk about the growth in RealWallet and revenue growth specifically? How has it trended since the product launched?

Tamir Poleg: Sure. RealWallet has been a standout success story for us. The business generated around $900,000 in 2025, and it is currently generating annualized revenue of over $1.5 million, which continues to grow on a month-over-month basis. We now have over 7,000 agents utilizing Wallet, as I mentioned, with our total deposit balance growing to over $23 million. On the lending front, we have extended over $8 million in lines of credit, and notably, our U.S. balances now exceed those in Canada. Beyond being an attractive high-margin revenue line, Wallet serves as a unique value proposition and a powerful retention tool that deepens our relationship with our most productive agents.

Ravi Jani: Great. Well, that concludes the retail shareholder Q&A. If you have any more questions on today’s earnings release, please feel free to contact me and our Investor Relations team. Matthew, would you please give the conference call replay instructions once again and close the call? Thank you.

Operator: Certainly. Ladies and gentlemen, today’s call will be available for replay. The replay phone numbers are (877) 481-4010 or (919) 882-2331. The replay code is 53464. And once again, the replay phone numbers are (877) 481-4010 or (919) 882-2331, and the replay code is 53464. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.

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