Real ‘surpassed expectations’ as revenue, agent count soars 

Real continues to be a standout among brokerage companies, reporting major revenue gains and steady growth in agent count during its second-quarter earnings call today.

But too much of a good thing can also be challenging, said Real President Sharran Srivatsaa: "None of this has been easy."

The company's rapid growth, he said, has "surpassed our expectations" — but he pointed to Real's investment in its proprietary tech platform and other innovations as advantages that will help the brokerage manage its growth and continue to gain ground within the market as a whole.

"Brokerages will need to offer agents more value at a lower cost," Srivatsaa said. "Traditional models may struggle to remain competitive in such an environment," he added, which he believes will allow Real to capture market share.

Despite a massive 84% increase in revenue, the company still reported a net loss of $1.2 million for the quarter. CFO Michelle Ressler pointed out, however, that the brokerage business was profitable in Q2, while the mortgage and title businesses were "drawing on the bottom line."

What Real had to say

Real Co-founder and CEO Tamir Poleg addressed the realities of the current market, which he described as "challenging," but said the company isn't overly focused on what might happen next.

"While we remain hopeful about rate cuts, we are not relying on a significant recovery and instead remain focused on what we can control," he said — namely, "delivering an exceptional experience" for both agents and their clients. 

Srivatsaa outlined the company's topline goals, which include increasing brand awareness by "making Real a household name" and creating new agent programs while "doubling down on training and support." In light of the upcoming settlement-related practice changes, he added that Real's "commitment to training has never been stronger."

When asked specifically about how Real is handling the industry-wide changes going into effect on August 17 — which Srivatsaa called the "most meaningful changes that have been done in our lifetime" — the company's president offered few details but said "what we are doing is completely in alignment with settlement agreement" and noted that Real is providing agent training sessions "nearly every day in every market." 

Key numbers

Revenue: $340.8 million, up 84% year-over-year and well above the $200 million achieved in the first quarter of 2024. Average revenue per transaction also increased by 6%. 

Cash and cash equivalents: $33.6 million at the end of Q2, including $23.3 of unrestricted cash and $10.3 million in investments.

Net income/loss: Real reported a net loss of $1.2 million vs. a loss of $4.1 million in Q2 2023. It was a significant improvement over the previous quarter's loss of $16 million, which included nearly $10 million in litigation expenses related to the commissions lawsuits. 

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization): $14 million, compared to $2.6 million a year prior and $3.6 million in Q1 2024. The Q2 figure excludes $400,000 in continuing litigation costs.

Transactions: 30,367, up from 19,032 transaction sides in the first quarter of the year and an increase of 73% year-over-year. 

Agent count: The total number of agents on the Real platform was 19,540 at the end of Q2, up 70% from the same period last year, reflecting a gain of nearly 3,000 agents during the quarter. As of the earnings call on August 7, agent count exceeded 20,000. 

Notable moves

The company gained several teams in recent months, including The Kaim Team, and passed the 20,000-agent milestone in July.

In May, Real launched a new luxury division, and in June, announced Real Partners, a suite of preferred vendors for its agents.

During the earnings call, company leaders highlighted Real's investment in product development, specifically the enhanced features coming soon to the company's Real One consumer app, and Real Wallet, which they said was on track for an initial launch later this year.