Real continues its rise, focused ‘on what we can control’ 

The housing market is feeling the weight of affordability challenges but Real has found a way to defy gravity and report significant growth in revenue and agent count while launching ambitious new tech-forward products.

"While we're cautious about forecasting a meaningful recovery until mortgage rates stabilize in the mean 5% range, we remain focused on what we can control — delivering an exceptional experience and value to our agents and the clients they serve," Real Co-Founder and CEO Tamir Poleg said during the company's third-quarter earnings call on Nov. 7.

To that end, Real highlighted the launch of its Wallet program, which is designed to combine earnings, rev share and equity on a single platform, as well as upgrades to its AI copilot, Leo, which will be expanding into the consumer space.

Real is aiming to "redefine the role of our brokerage in the lives of agents and in the broader housing industry," Poleg said.

What Real had to say

On the impact of industry rule changes related to agent compensation: "We haven't observed a notable change in commission rate today on the buy side or sell side," said Real President Sharran Srivatsaa. "Our focus has been on preparing agents to handle these changes confidently, and we believe it's working. In the week after the rule changes went into effect, 89% of our agents surveyed reported feeling prepared or well prepared for the changes," Srivatsaa said, citing the company's "comprehensive training programs." 

On the growth of its mortgage and title business, up a combined 97% year over year: "These ancillary business lines typically carry gross margins that are six to eight times higher than our brokerage business, and they are expected to continue outpacing growth in our core brokerage business in the future," Poleg said. 

On international expansion beyond Canada, where Real is operating in four provinces and later this year, Saskatchewan. "We're focused on capturing more market share before turning to new regions," Poleg said. "Expanding too quickly can be a distraction, and we believe there's still tremendous value to unlock for our agents and clients in North America."

Key numbers

Revenue: $372.5 million, up 74% year-over-year and above the $340.8 million achieved in the second quarter of 2024. Average revenue per transaction went up by 6%.

Cash and cash equivalents: $32.0 million at the end of Q3, including $21.6 million in unrestricted cash and $10.4 million held in investments. The company also pointed out that it "continues to have no debt."

Net income/loss: Real reported a net loss of $2.6 million vs. a loss of $4.0 million in Q3 2023. Meanwhile, commissions lawsuit settlement costs dropped to $33,000 from $369,000 in Q2 2024.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization): $13.3 million, compared to $3.5 million a year prior and $14 million in Q3 2024. 

Transactions: 35,832, up from 30,367 transaction sides in the second quarter of the year and an increase of 76% year-over-year. 

Agent count: The total number of agents on the Real platform was 21,770 at the end of Q2, up 79% from the same period last year, reflecting a gain of more than 2,000 agents during the quarter. As of the earnings call on Nov. 7, agent count reached 22,500.

Notable moves

In October, Real announced Leo for Clients, which is expected to roll out in 2025. Rather than an app, it will be a text-based communication platform that allows clients to learn more about homes, schedule tours, even start the mortgage application process while maintaining "seamless connectivity with their agent," Poleg said.

Earlier this year, Real launched Private Label, which allows teams to leverage the company's platform and rev share model while retaining their own brand. The program now has 1,000 agents, Srivatsaa said on the call. "We're thrilled to see more independent brokerages aligning with our platform while retaining their local brand equity."