REAX

Good morning, ladies and gentlemen, and welcome to The Real Brokerage first quarter ended March 31st, 2026 earnings call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. I will now turn the call over to Alexandra Lumpkin at The Real Brokerage. Ma'am, the floor is yours.

Thanks, good morning. Thank you for standing by, 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. I'd like to turn the call over to Chairman and Chief Executive Officer, Tamir Poleg. Tamir, please proceed.

Thank you, Alix. Good morning, everyone. I will cover our Q1 results and the RE/MAX transaction. Jenna will provide an update on key brokerage initiatives. Ravi will walk through our financials in greater detail. Then I'll come back to close. I'll start with a quick overview of our results. Real delivered another impressive first quarter. I think the numbers speak for themselves. Revenue of $466 million, up 32%. Operating loss of $3.4 million, improved by $1.8 million year-over-year. Adjusted EBITDA of $14.9 million increased 80%. Our unrestricted cash and investments balance increased by $13 million in the quarter to a record $62.9 million. All of this occurred in one of the softest markets we've seen in years.

U.S. existing home sales were essentially flat at trough levels, and Canadian home sales activity declined mid-to-high single digits. Despite this, our agents closed nearly 42,000 transactions, up 25% year-over-year. Gross profit grew faster than operating expenses, and adjusted EBITDA grew 2.5x faster than revenue. That is the model working exactly as we designed. We ended the first quarter with approximately 33,500 agents, and as of May sixth, that number has grown to over 33,900. This is happening while agents across the industry are struggling, transaction volumes are down, and productivity is under pressure. The fact that we are both growing rapidly and improving retention in that environment demonstrates the value the platform delivers for agents. On our ancillary businesses, the progress we're making is starting to become very tangible.

On Real Wallet, revenue more than tripled year-over-year to $436,000. We now have 8,000 active agents on the platform, which represents 23% of our total agent base, including 40% of those agents who generate over $150,000 in annual gross commissions. Weekly debit card spend has now exceeded $1 million a week. While deposit balances have grown to over $25 million, we ended the quarter with approximately $9 million of credit extended to agents across Canada and the U.S., and we are now seeing early data showing a direct link between Wallet adoption and lower agent churn. We're still in the early stages of what Real Wallet can become. I'm very excited to bring it to even more agents and following the RE/MAX closing franchisees across the country.

On One Real Title, revenue increased 22% in the quarter. That is the strongest quarterly growth we have seen since Q1 of last year. We now operate 13 title joint ventures across 19 states, and we expect to open Colorado in the second quarter, bringing the total to 20 states. The state-based JV model is the right model to efficiently scale, and I am pleased that we are starting to see that play out in the numbers. On One Real Mortgage, revenue increased 20% year-over-year. Kate Gurevich, who joined as CEO in January, is focused on realigning the loan officer base with our current agent footprint while improving the cost structure. We are migrating to a new loan origination system in Q2, which will meaningfully reduce our per-file costs.

Meanwhile, we are actively evaluating new lender partners to ensure we are offering clients a more comprehensive range of competitive financing options. I think mortgage is on the right track, we will continue to see that reflected in the numbers as the year progresses. Now, on RE/MAX. Last week, we announced a definitive agreement to acquire RE/MAX Holdings, Inc. in a transaction that implies an enterprise value for RE/MAX of approximately $880 million as of the transaction announcement date. I know this is top of mind for everyone on the call, let me tell you why we announced this transaction and why now. At its core, Real REMAX Group will unite an iconic real estate brand and franchise network with our innovative technology and the fastest-growing major public real estate brokerage. Real has built the platform, the technology, and the agent-aligned community and economics.

RE/MAX has the brand recognition, the global network, and decades of trust with some of the most productive agents in the business. Together, we believe we can create a platform that is genuinely differentiated and purpose-built to be a leading presence in this industry for the next generation of real estate professionals and entrepreneurs. The financials are compelling. Based on 2025 results, RE/MAX generated approximately $94 million of high-margin adjusted EBITDA, mostly from recurring franchise fees, representing a transaction value of roughly 9x trailing adjusted EBITDA or about 7x post synergies. As a reminder, these figures are based on results at the bottom of the housing cycle. Last year, the combined Real and RE/MAX networks closed over 700,000 transaction sides in the United States alone. That reflects a significant opportunity to grow our ancillary title and mortgage businesses.

To put some numbers around what that means, we estimate a 1% attachment rate on One Real Mortgage across that addressable transaction base would generate approximately $25 million of high-margin revenue for the combined company post-closing. Similarly, we estimate a 1% attachment rate on title would generate over $10 million of revenue for the combined company. Our goal over time is to be much higher than 1%, so you can see how these numbers can genuinely transform the P&L over time. We also see significant opportunity to utilize our AI-powered consumer home search portal, HeyLeo, to further nurture and monetize the 1 million annual leads generated across remax.com and remax.ca, given the brand's strong trust with consumers. RE/MAX is a brand built on production. The average RE/MAX agent closes over 10 transactions a year, roughly double the industry average.

These are exactly the kind of high-producing full-time professionals that our technology platform and ancillary businesses are designed to support. Meanwhile, the cost synergy opportunity of $30 million is grounded in real visible and duplicative costs. Two public company cost structures, shared services, vendor contracts, nothing that we believe is aspirational. We are standing up our integration team now, and we will keep investors updated as we make additional progress. I also want to speak directly to agents on both sides of this combination because I know there are questions about what this means for you. The answer is straightforward. Real and RE/MAX will continue to operate as separate brands with separate and distinct value propositions. If you are a RE/MAX agent who thrives working in office side by side with your broker owner and your team, that is not changing.

What you can look forward to is access to new technology tools and services that Real has built, which will be available to you upon closing. If you are a Real agent, you will continue to have all the flexibility and benefits of our model. Nothing about that changes. These are complementary businesses, each serving different agents in different ways, soon to be operating under one roof. When you have reZEN as your single system of record, Leo AI helping you run your business every day, Real Wallet getting you paid faster with access to lines of credit and integrated title and mortgage services all inside one ecosystem, it's really hard to walk away from that. Every tool we add makes the platform more valuable and every agent who joins makes the community stronger. I think Q1 is showing exactly that.

With that, I'll hand it over to Jenna.

Thank you, Tamir, and good morning. We have several exciting updates on the brokerage operations front. Starting with leadership. In March, we named Jason Cassity as Chief Growth Officer, a newly created executive role designed to accelerate agent growth and continue building one of the industry's most innovative, collaborative agent communities. Before joining our executive team, Jason spent 13 years as a top-producing realtor and team leader in San Diego. He also served as a growth ambassador for Real, working closely with agents and leadership to attract top talent and strengthen community engagement. Jason stepped away from his personal production to ensure that every agent who joins Real, and soon the Real RE/MAX Group, has the tools, the technology, and the community they need to achieve their own greatness.

Jason will own agent acquisition, activation, and engagement strategy across our markets, partnering closely with our growth ambassador network and top teams and agents. We are very excited to welcome him into this role. Second, on operations. You will notice from our press release that our headcount efficiency ratio, defined as the number of agents per full-time brokerage employee, was 85 to one at the end of the first quarter. For context, during the quarter, we onboarded 34 full-time employees into roles that were previously performed by outside contractors, primarily in brokerage operations and compliance. From a P&L standpoint, this conversion is expected to be largely neutral. From a practical standpoint, bringing these roles in-house means our agents get better service, better support, and more hands-on local expertise.

Importantly, our new full-time brokers are being incentivized not just on agent satisfaction, but also on driving ancillary attachment rates in their markets. That aligns their personal success directly with the growth of One Real Title, One Real Mortgage, and Real Wallet, which is exactly the kind of structural change that compounds over time. Third, HeyLeo. In March, we officially beta launched HeyLeo, our consumer home search portal and AI relationship management platform to our agent base, and I want to share some early data. As a reminder, HeyLeo ingests live MLS data to allow buyers and agents to search, explore, and interact natively throughout the platform. We now have ingested 357 MLS and are on track to reach 400+ by the end of Q2, with full Canadian coverage already live.

Today, HeyLeo already covers over 85% of our agents' geographic distribution. That data foundation is what makes AI RM genuinely useful. We currently have 450 agents in the beta test, with another 4,500 on the wait list. This phased rollout is deliberate, as we want agents and their clients to have a great experience before we open the floodgates. We are seeing early success with HeyLeo re-engaging and providing tools for agents to nurture dormant leads, while early engagement data is also encouraging. We are seeing many client conversations with HeyLeo running to 10, 15, even 20+ messages covering property details, neighborhoods, schools, and ownership costs.

These are typical high-quality buyer interactions that our agents no longer have to manually respond to around the clock, and I'm very excited about rolling the platform out to our entire agent base as the product matures. Finally, on RE/MAX. I have taken on the role of chief integration officer for the combined company, and I want to share why I am so confident that we can deliver significant value, both at the company level and at the individual office level. That confidence comes from our DNA. We have spent over a decade using technology to streamline brokerage operations at scale, building reZEN, deploying Leo AI, and automating workflows that used to require manual intervention. We know how to run a lean, technology-enabled brokerage efficiently, and we know how to bring agents onto a platform in a way that enhances their businesses without disrupting what they have built.

That experience is directly transferable to RE/MAX franchisees, and it is the foundation of our on-the-ground integration approach. The RE/MAX franchise network is filled with thousands of franchisees who have built incredible businesses and who deserve the best tools, the best support, and the best technology the industry has to offer. I genuinely look forward to working with the RE/MAX team, agents, and franchisees to build the technology-enabled real estate platform of the future together. The opportunity in front of us is significant, and I believe we have exactly the right team and foundation to capture it. With that, I'll turn it over to Ravi.

Thank you, Jenna, good morning, everyone. Consolidated revenue for the first quarter was $466 million, up 32% year-over-year. Growth was led by our North American brokerage segment, where closed transactions rose 25%, substantially outperforming the U.S. and Canadian home sales markets. Ancillary revenue of $3 million grew 34% year-over-year, with growth across the board. Real Wallet generated $436,000 in revenue in the first quarter, up nearly 250% from Q1 2025. One Real Title returned to double-digit growth despite the year-over-year headwind resulting from the shift to state-based joint ventures, which will anniversary in the second half of the year. Gross profit increased 24% to $42.2 million in the first quarter, compared to $33.9 million in the same period last year.

Gross margin was 9.1%, compared to 9.6% in the prior year first quarter. The primary year-over-year driver was transaction mix, as approximately 40% of our closed transaction sides came from capped agents, up approximately 200 basis points year-over-year. Total operating expenses, including G&A, marketing, R&D, and acquisition-related costs, were $45.6 million in the first quarter, up 17% from $39.1 million last year. Operating expenses included approximately $300,000 in expenses related to the RE/MAX acquisition. As a percentage of revenue, operating expenses improved to 9.8%, down approximately 130 basis points from 11.1% a year ago, reflecting our commitment to grow OpEx at a slower pace than revenue and gross profit.

I do want to flag that we expect Q2 operating expenses to reflect a more material step up in RE/MAX acquisition-related costs. We will break these out as non-recurring items in our disclosures. Operating loss improved to $3.4 million in the first quarter, compared to an operating loss of $5.2 million in the first quarter of 2025. Operating margin improved to -0.7% for the quarter from -1.5% in the prior period, reflecting strong growth and operating leverage. On a non-GAAP basis, adjusted EBITDA rose to $14.9 million in the first quarter, an 80% improvement from $8.3 million in Q1 2025.

Real generated cash flow from operating activities of $23.3 million in the first quarter and ended the quarter with $62.9 million in unrestricted cash and short-term investments and continued to carry no debt. While we don't provide formal guidance, we expect Q2 revenue to improve sequentially, consistent with normal seasonal patterns in the housing market. Gross margin will follow a similar trajectory to prior years, declining through the year as more agents reach their annual commission cap, which is a natural function of our model. On operating expenses, we expect Q2 to reflect a step up in acquisition-related costs, which we will disclose in non-recurring items. On an underlying basis, we remain focused on the same discipline that drove our Q1 results, managing fixed costs to deliver continued year-over-year improvement in adjusted EBITDA.

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'll now turn it back to Tamir.

Thank you, Ravi, and thank you, Jenna. I'd like to ask you all to imagine a world where buying a home is as seamless as any other digital experience. Where a buyer talks to an AI that knows every listing, every neighborhood, every school, and every mortgage rate. When the right property hits the market, that buyer is connected instantly to an experienced real estate agent who is ready and prepared to serve them. Where that agent then manages and closes the transaction on one platform, gets paid through it, finances their business through it, and offers integrated closing services without ever having to leave the ecosystem. Where every step of the most important financial decision of that client's life is connected, intelligent, and has less friction. That is the platform we are building, and that has been our vision since day one. We didn't have to pivot to AI.

We didn't white label our way into fintech. We've built the infrastructure transaction by transaction, agent by agent, year after year, because we knew that someday technology would catch up to the vision. That day has arrived. With the RE/MAX transaction, we will soon have the network and the reach to bring it to life at a scale that we believe can transform how people buy and sell homes. You cannot vibe code this. You have to dream it, build it, and earn it. We have spent over a decade doing exactly that. I speak to you today as CEO, as a co-founder, and as one of the largest individual shareholders of this company. I have never been more excited about our future than I am right now.

The opportunity in front of us is generational, and I deeply believe the best days of this company are ahead of us. Operator, please open the call for questions.

Certainly. Everyone at this time will be conducting a question-and-answer session for analysts. If you have any questions or comments, please press star one on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press star one on your phone. Your first question's coming from Naved Khan from B. Riley Securities. Your line is live.

Great. Thanks so much and congrats on the results. Just a couple of questions from me, please, both are related to ancillary. First question is, what kind of attach rates are you seeing from the agents who are part of the JVs? How is that trending? Secondarily, just in terms of participation of the agent on the JVs for title, where does that stand, and what are the steps you're taking to take that higher? Thank you.

Hi, Naved. Thanks for the question. The attach rates on the JVs, we're seeing some JVs with attach rates of 40%, 50%. We have seen a couple with as high as 80%, the trajectory is obviously encouraging. As you know, the JVs are only on the title side. The participation of agents, I'm not sure I understood the question. Are you asking about how many agents actually opt-in into the JVs, or was it something else?

Yeah, that was the essence of the question. Like, what are you doing on your end to increase more agents participate and become part of the JV so that, you know, there's more volume flowing through it?

Sure. We wanna make sure that the JVs are valuable and that we're driving meaningful transactions through them. We are opening them up to the most productive teams and then most productive agents, and then we're trying to add more and more. Typically it's based on production, and we're happy that currently the ones that actually opted in are the ones that carry most of the transactions in each market. It's still an effort to add more, but it starts with the top producers in every market.

Okay. Did you say in your prepared remarks that, the number of title JVs is going to 20?

No. We said that One Real Title is operating in 19 states, and we will be opening Colorado soon. That will be 20, and we have 13 JVs at the moment.

Okay.

13 out of the 19 carry JVs.

Is, is there a gating factor in terms of why you can't have JVs in all of these 19 states?

No. That's the intention.[crosstalk]

Naved, some JVs.

Oh, go ahead.

Sorry. I, as you can say, some JVs do have, you know, span across more than one state.

Got it.

always one to one.

Got it. Understood. Thank you, guys.

Thank you.[crosstalk]

Thanks, Naved.

Thank you. Your next question's coming from Stephen Sheldon from William Blair. Your line is live.

Hey. Good morning. Thanks for taking my questions. First here, just wanted to see, I know, I know it's very early, but just what you can share about the feedback you've received so far from RE/MAX franchisees on the deal. you know, has there been much pushback? Then, I guess, how much interest have they shown, again, I know it's really early, how much interest have they shown in potentially adopting reZEN and your broader technology platform since, you know, that's something that won't be mandated upon them? I guess what's kind of the early feedback you're hearing from that network?

Sure. Thanks, Stephen. RE/MAX Management has been working very closely with the RE/MAX network and the franchisees. The initial feedback I think was a little bit of a mixed excitement and surprise. I think that, you know, naturally people don't really like change. At the beginning, there was a need to heavily communicate and kind of provide them the background and how management looks at the combination of the two companies. I think that very quickly it shifted to a lot of excitement on the RE/MAX network side. We also heard that many of them are starting to look into reZEN, trying to understand. We received some calls from Real agents who received calls from RE/MAX agents who wanted to learn more about the technology.

There's definitely a lot of interest and a lot of excitement, and we will need to continue and communicate and make sure that there's a lot of clarity around the combination of the company and the companies and the timeline and what will be available to the RE/MAX network and when. I think that there is a lot of support to the combination and the merger of the two companies.

Got it. Yeah, that's really good to hear. Maybe then with Ravi, on gross margins, I know there are always a lot of moving pieces, but just generally, how are you thinking about the trajectory over the rest of the year? You know, I heard the comment, you expect it kind of as normal to trend lower sequentially. How should we be thinking about year-over-year trends? You know, gross margins were down a little bit in 1Q relative to last year. Kind of how should we think about Should it continue to step down, I guess, year-over-year as we think about the rest of the year?

Thanks, Stephen. I appreciate the question. I think in Q2, well, you know, year-over-year decline, probably similar order of magnitude as you saw in Q1. As we get to the second half of the year, I think that the year-over-year pace is likely to be a little bit more flattish than relative to what you saw in the first half with respect to the decline. That's just because of the significant step-up we saw in post-cap transactions in the second half of last year. We wouldn't expect that same order of magnitude of year-over-year change. I think last year was a bit of a step change across the industry, where you saw the highest producing agents take an outsized share of transactions.

While it could modestly tick up this year, I don't think it would be as impactful as you saw in the second half of last year. We would expect that year-over-year trend to sort of dissipate the second half of this year.

Got it. If, you know, housing activity picks up and you start to see productivity kind of spread out across the agent base, then that could maybe start to support a better trajectory in gross profit when housing activity does pick up. Is that kind of the right way to think about it?

Yeah, absolutely. I think if you rewind the clock back to better markets, you did see higher gross margins because you saw a bigger percentage of the transaction pool being transacted by agents who are, you know, pre-cap. You saw a greater mix of revenue coming in at that 15% gross margin rather than that post-cap gross margin, which is in the single digits. That's been our thesis. I mean, the history proves that that is typically what happens. I'd say the other thing that we would expect to be a tailwind in the second half of the year is our ancillary businesses will continue to grow. You saw this year ancillary growth, you know, modestly actually outpaced the brokerage. Ancillaries were a 10 basis point gross margin tailwind in the quarter.

Those are the two things that if you do see a market pick-up, in the second half of the year and beyond, you'll see just a greater contribution from pre-cap agents and transactions, as well as from ancillary services, which come at significantly higher margins than the brokerage.

Makes sense. All right. Thank you.

Thanks, Stephen.

Thank you. Your next question's coming from Jason Weaver from JonesTrading. Your line is live.

Hi. Good morning. Thanks for taking my question. I believe that you held an internal town hall on the date of the announcement of the or the combination. 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?

Thank you, Jason. Yes, 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. Obviously, agents wanted to understand a little bit better what's what does it mean for them. Is the model changing? Is anything changing on the technology side? Is there anything changing on the revenue share program, on the stock purchase program? We told them, you know, that nothing changes for now. It's business as usual, obviously.

We also indicated that this combination will allow us to invest even more in growth, in technology, in more, in just, strengthening the value proposition, both on the Real sides or on the Real model and on the RE/MAX model. The initial feedback was very supportive from Real's agent community.

Thank you. Good to hear. I was wondering if you could speak to any thoughts of further over-the-horizon expected synergies upon the longer scale integration of both companies?

Ravi, you wanna take that?

Yeah, sure. I'll let Tamir talk on some of the top-line synergies, which he addressed in his prepared remarks. You know, I think as you've seen in other M&A transactions in the sector, what you underwrite the transaction to is based on from a synergy standpoint, is sort of based on what you can see before you own the combined company and you can look under the hood. You know, kudos to Compass. They've done a great job of executing on their synergies in a very short period of time. I think you've seen in transactions in this sector and other sectors that once two players combine, there's always more opportunity than you'd think going in. We underwrote the transaction with $30 million of synergies.

If, you know, once we own the businesses and we get the best athletes together and figure out how the go forward business looks, for, you know, the next decade, could that synergy number change? Yes, of course. I think we'll be vigilant and thoughtful in how we execute on that path. Needless to say that Real is a very efficient organization and we will continue to be very efficient as Real RE/MAX Group.

Thank you. I appreciate it.[crosstalk]

Jason, as I-

Oh, sorry.

As I mentioned it on my prepared remarks, we think that there's tremendous opportunity in just expanding title mortgage and the Real Wallet to the RE/MAX network, just with the 700,000 annual transactions in the U.S. Just capturing a portion of that will be huge for revenue at a high margin. remax.com and remax.ca generate roughly 1 million leads a year. Those are high intent leads. Those are folks that visited the websites, looked at properties and wanted to receive more information. We wanna put Leo to work on those websites so Leo can actually nurture the leads and then hand them over to an agent who's ready to transact and take the buyer through the process. We think that there is a potential to monetize significantly over there.

Just generally speaking, I think that coming in with Real's growth mindset and just a stronger value proposition for the RE/MAX side, I think will help change the trajectory of the growth in agent count in the U.S. and Canada. We believe that with a stronger value proposition and the right messaging and the right energy, we can get RE/MAX back to growing their agent count in North America, and obviously create a platform where every agent in North America can find a home where there is no better alternative for anyone. They can choose either to be on the Real model or on the RE/MAX model, but they don't need to search anywhere else for a brokerage.

Thank you once again.

Thanks, Jason.

Thank you. Your next question's coming from Nick McAndrew from Zelman & Associates. Your line is live.

Hey, guys. Thanks for taking my questions. Maybe just wanted to start, I think just given the franchising model of the RE/MAX business, and assuming you're planning on keeping the RE/MAX fee structure in place, do you see this as a way to reduce the cyclicality of the business? I guess just how different is the productivity profile of a legacy RE/MAX agent versus kind of a more mature Real agent today?

Ravi, or do you want me to take it?

Sure. If you wanna address the productivity point. Nick, the question was on the RE/MAX fee model and cyclicality. I mean, I think I can take that and Tamir can address the second part. For sure, I think the franchise model, and you've seen RE/MAX's results have been incredibly resilient throughout, you know, what's been a four-year downturn at this point. They've done an incredible job of protecting the bottom line, which reflects that, you know, franchise model, which is just stable and largely recurring with long-term contracts with franchisees. We think it's a really attractive model. It does reduce cyclicality. It does generate high margins in an asset-light nature.

Look, there are a million reasons we're excited about the RE/MAX transaction and the RE/MAX business and, you know, the less cyclicality in the margins and revenue stream is one of the many.

Yeah. On the productivity profile, RE/MAX agents in 2025 closed around 10.3 transactions per agent on average. Real side was around six. I believe we were number three in the industry. Obviously the RE/MAX agent productivity is way up there and by far the best in the industry. This is significantly important when we're talking about the potential for ancillary services attachment, because every agent that opts into a title JV or uses One Real Mortgage is a potential to drive 2x more transactions compared to a Real agent or any other agent in the industry on average. We don't necessarily only think about the number of agents that RE/MAX has. We think about the number of transactions that those agents are bringing.

Great. Yeah. Thanks, guys. That's really helpful. Then maybe just one on the cost side, just thinking about the headcount efficiency. I think moving to 85 to 1 from 94 to 1 last quarter. I guess just when you think about transitioning RE/MAX franchisees and agents onto reZEN, does the scale of the RE/MAX network meaningfully accelerate some of the internal AI investments you've already done in brokerage ops, just given that larger agent base?

I don't think they're necessarily related, right? Because the technology we're building is really quite scalable, right? It's already being used by 30,000 plus agents across North America and, you know, bringing on another 75,000 in North America, it's not gonna require, you know, a commensurate increase in our investment. I mean, technology is scalable by definition. I think the continued business will continue to invest heavily in AI and tech because that's in our DNA, and that's our competitive moat. I don't think it's gonna significantly change the level of intensity of investment, and that's because it's already quite intense, relative to peers and relative to our own budget.

With that being said, you know, on the headcount efficiency ratio, I did wanna just point out that it is gonna be largely P&L neutral. It was a conversion of certain contractor roles to full-time employees, which Jenna mentioned in her script. It's really to drive better service, better local market expertise. Also the brokers that we brought on as full-time employees, a portion of their compensation is gonna be tied to driving ancillary attachment in their market. I think it's a win-win for our brokers, for our agents, and for the company.

Got it. Thanks, Ravi. That's helpful.

Sure. Thanks, Nick.

Thank you. Once again, everyone, if you have any questions or comments, please press star then one on your phone. Your next question's coming from Michael Rindos from Benchmark StoneX. Your line is live.

Hey, guys. Thanks for taking the question. Good morning. Can you talk a little bit about what the firm is doing to stimulate agent growth in markets with higher median sales prices?

Sure. Hi, Michael. As we communicated, we added Jason Cassity as our Chief Growth Officer about two months ago. 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. 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. We also have the luxury division, where the luxury division focuses on the high-end properties in each market. We're kind of venturing slowly, slowly into higher price points in every market. I hope that answers the question.

I also have to mention that following the announcement of joining forces with RE/MAX, we have seen tremendous inbound inquiries related to growth and a lot of interest, and our agents are having a lot of conversations with people that are interested in joining. We believe that once we close the transaction or even before that, we will see an uptick in growth. That uptick will very likely also be coming from agents that are more productive, care more about the branding, care more about being affiliated with a more established name. I think that that move establishes us as, you know, obviously one of the top brokerages, but it gives a lot of comfort to agents that are on higher-end markets.

Okay. Thank you.

Thanks, Michael.

Thank you. There are no further questions in the queue. I'll now hand the floor over to CFO Ravi Jani for questions from retail investors.

Great. Thank you, Matthew. Now that we've completed the analyst Q&A, I'd like to address some of the questions that we were submitted through the Say Technologies Shareholders portal. We received a number of great questions this quarter, so I appreciate everybody who participated. Tamir, you addressed this a little bit in your prepared remarks, but how will Real increase revenue from the RE/MAX acquisition?

Well, thanks for the question. We believe that it starts with improving the value proposition for agents and franchisees. As you know, Real has been one of the only major publicly traded brokerages who consistently delivered strong organic growth through both strong and weak housing markets. We believe that comes from the combination of our technology platform, our flexible model, and highly collaborative agent community. By bringing tools like reZEN and Leo AI, Real Wallet, and our integrated services into the arsenal of RE/MAX franchisees and agents, we believe we can help drive stronger agent attraction, retention, and franchise growth.

Beyond that, as I noted in my prepared remarks, the scale of the combined network creates a meaningful opportunity to grow our high-margin mortgage title and fintech businesses while creating the new revenue streams from website leads and just monetizing those website leads. While the transaction economics don't depend on these revenue opportunities, we certainly will be focusing on delivering them.

Thanks, Tamir. I'll take the next question: Are you concerned about taking on debt, and what is the timeline to pay it down? We're approaching leverage very conservatively, and we're encouraged because both businesses are highly cash generative. They're asset light. RE/MAX brings recurring franchise revenue, which creates a lot of visibility into the future free cash flow of the company. Our first capital allocation priority post-close will be deleveraging, and we expect to reach the 2x net debt to adjusted EBITDA by the end of the second full fiscal year following close. As we de-lever, we'll see both a stronger balance sheet and stronger earnings as we reduce the associated interest expense. We think the debt balance is quite manageable.

Even pro forma post-close, the leverage of the business will be lower than RE/MAX standalone. That's on a net leverage ratio basis. We'll continue to have the ability to invest in our agents, in our franchisees, in the tech platform and ancillary businesses. Full speed ahead on that while having significant cash to delever. Next question for Jenna. What is the plan to transition RE/MAX agents onto the Real platform? Will there be any changes to the model?

Thanks, Ravi. These are great questions. First, Real and RE/MAX are gonna continue operating as distinct brands with their distinct models and value propositions. There's not gonna be any forced migration of RE/MAX agents or franchisees onto the Real model. They'll stay completely separate. What this does open up though, however, is access to the technology and services that we've built to help make agents' jobs easier and more efficient. That includes our proprietary software reZEN, Leo AI, Real Wallet, ancillary services, and consumer lead generation tools. You know, these tools are the same tools powering Real's operations, franchisees stand to benefit from the same operational efficiency that we've built into our own business.

Thanks, Jenna. Last question for Tamir. 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?

Great question. On timeline, we expect to file the necessary documents over the next few weeks. The transaction, as you know, requires shareholder approvals on both sides and standard regulatory clearances. Based on typical timelines of for transactions of this type, we are targeting a close in the second half of the year, as we communicated before, and we will provide a more specific window as we get further into the process. On the three biggest things we are focused on, first, it's ensuring agent and franchisee retention through the transition. RE/MAX Network has built very deep relationships with the franchisees over many, many decades.

The most important thing we can do between signing and closing is to communicate very clearly and demonstrating to RE/MAX agents and franchisees as well, and also Real agents that their businesses are going to be better and not disrupted by this combination. If we do that well, we hope that retention piece will just take care of itself. Second, operational stability on day one. When we close, agents and franchisees on both sides of the combination need to wake up and find their businesses running exactly as they were the day before. This is a non-negotiable for us at this point, and we are doing the integration planning work now before we close so that the day of close is going to be a boring day in the best possible way.

Then I would say third, just being laser-focused on delivering the synergies. We're targeting $30 million in run rate savings grounded in Real duplicative overhead and corporate costs. Synergies don't realize themselves. We need to work for that. They require thoughtful decision. They require disciplined execution and organizational alignment. We have a clear roadmap, and we are holding ourselves accountable to it. Those are the three, and we think about them honestly all day, every day.

All right. Thanks, Tamir. With that concludes our shareholder Q&A. Matthew, could you please provide replay instructions and close the call?

Certainly. Ladies and gentlemen, this concludes today's conference call. Today's conference call will be available for replay. Our replay phone number is 877-481-4010. The replay code is 53761. Once again, the replay phone number is 877-481-4010. The replay code is 53761. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.

Good day, everyone, and welcome to The Real Brokerage Inc. Fourth Quarter and Full Year Ended December 31, 2025 Earnings Call. At this time, all participants are placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to hand the floor over to your host, Alexandra Lumpkin, Chief Legal Officer at The Real Brokerage Inc. Ma'am, the floor is yours.

Thanks, and good morning. Thank you for standing by, and welcome to The Real Brokerage Inc. conference call and webcast for the fourth quarter and full year ended 12/31/2025. We appreciate everyone for joining us today. With me on the call today are 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.

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.

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.

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.

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.

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.

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?

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.

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?

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.

Good to hear. Thank you.

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

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.

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.

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

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.

Excellent. Thank you.

Thank you.

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

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?

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.

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?

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.

Got it. That makes sense. Thank you.

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.

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.

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.

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?

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.

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?

Certainly. There are no further questions in the queue.

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?

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.

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.

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?

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.

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.

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.