All right, we'll get started here. Good afternoon. Thank you for joining for the Real Brokerage session. I'm Stephen Sheldon, an analyst in the tech group at William Blair covering real estate, including coverage of Real Brokerage. Please visit our website at williamblair.com for a complete list of research disclosures and potential conflicts of interest. We're thrilled to have Real back at our conference once again. It's been an outlier in the residential brokerage space for anyone who's followed it and has been really growing significantly over the last few years, even with the challenging housing backdrop. Just for context, as we think about more recently in the first quarter, put up over 60% growth in both agent count and gross profit. Growing very well. They lead with a strong technology platform for agents, which Tamir will get into.
They use the impressive operating efficiency to provide attractive economics to agents and teams that join its platform. It's also making progress monetizing some different solutions like mortgage and title. It's got some fintech capabilities that are kind of in the early innings of being rolled out here with the Real Wallet. I think it's a great time to be looking at the story. Any housing recovery would likely boost its ability to scale. From the company today, we have Tamir Poleg, who's the Co-founder, Chairman, and CEO. We also have Ravi Jani, here sitting in the front row in the audience, who is the CFO, just took over that role a couple of months ago. With that, I will turn it over to Tamir. He's going to give a presentation. With any remaining time, we'll run through some Q&A.
Thanks, Stephen. Hi, everybody. Good afternoon. My name is Tamir, and I'm the Co-founder and CEO at Real. Real is a real estate technology company that was founded back in 2014. Our primary business is real estate brokerage, where we operate a platform for real estate agents to grow their businesses on while delivering them all of the technology that they need and with a strong focus on AI that I will dive into. As Stephen mentioned, we are a very unique growth story right now in the industry, especially given the situation in the housing market. Just to give you an understanding of where we are, at the 12-month ended in March of 2025, we had about 27,000 agents across the U.S. and Canada, which was a growth of 61% year-over-year.
Same period, we grew revenue by north of 80% year-over-year, and we actually tripled our Adjusted EBITDA in that time frame. The market was down about 30% since 2022, and we managed to grow significantly. Talking a little bit about the industry, there are 1.5 million real estate agents in the U.S. and another 160,000 in Canada. All of them have to be affiliated with brokerages. When we looked at the market back in 2014, we understood that agents do not really have an alternative. The market was dominated by traditional players, companies like Century 21, Keller Williams, Coldwell Banker. Those folks have been around forever. All of them operate in the same way. They rely heavily on office locations for distribution of services, and they rely on manual labor for processing transactions.
When we looked at the industry, we realized that there's an opportunity to create a brokerage that delivers more value at a lower cost. While we're growing so rapidly, we're still under 2% of the overall market. There is a lot of room to grow. Going back to what we wanted to offer, as I said, we thought that the traditional brokerages are charging agents a lot of money, delivering poor value. At the same time, there's an opportunity to create an operating model for a brokerage that is much more efficient. Let's eliminate the need for office space. Let's try and automate as much as possible all of the manual processes that are being handled in the back office of a brokerage. This is what we've been focused on for the past 11 years.
As I said, the market has shifted in the middle of 2022. We had a bull market, and then the market became much slower. During that time frame, from the first quarter of 2022 to today, we grew our revenue 8x , while the industry declined by about 30%. If we look before the first quarter of 2022, for those of you who ask themselves whether we know how to grow only in bad markets, no, we grew very rapidly even before 2022. What really changed our trajectory was the fact that we decided to take the company public. That happened in the summer of 2020. Back then, it did not make any sense. We were making about $15 million in annual revenue. We wanted to create an equity incentive plan for our agents. We wanted them to become partners in this company that we built together.
We decided to go public initially on the TSXV in Canada. A year later, we did a direct listing into Nasdaq. Currently, we're only listed at Nasdaq. In 2020, we did about $15 million in annual revenue. Last year, we did $1.3 billion. In a matter of about four years, we grew from $15 million to $1.3 billion, which is a very unique case. That growth is driven by our ability to attract and retain high-producing agents. When we ask ourselves or when we ask our agents, why did you choose to join Real? Why did you leave this previous brokerage that you were with and decided to shift your business over to us? We get the same answers. One is freedom and flexibility. Imagine yourselves as an agent working at a RE/MAX office, for example.
There is a manager in the office that tells you when you have to come to the office, which meetings you have to attend. Your marketing materials have RE/MAX all over them. You're building somebody else's brand. When they join Real, they join a platform that gives them the freedom and flexibility to build their businesses the way they want to. The second reason is the compelling economics. Typically, at a brokerage, agents would pay monthly fees, transaction fees, commission splits that vary from 50/50 to 70/30. On average, it's 70/30. 30% of the commission stays with the brokerage. 70% goes to the agent. On average, an agent saves 50% of the fees when they switch over to Real.
We have an 85/15 split with a $12,000 cap, meaning that when agents pay us $12,000 annually in commission splits, they get to keep 100% of their commissions and only pay a transaction fee. This is extremely compelling, especially for high-producing teams. The third reason for joining us is technology. We built an operating system for agent businesses. Everything that they need, from searching listings to creating contracts to having 24/7 support, everything in the palm of their hands. We're a mobile-focused company. Agents need to be out there nurturing relationships, showing homes. We built a system for them that saves them a lot of money on third-party tools, but also gives them a lot of visibility into their businesses and makes them more efficient. We save them time on every transaction because of the technology that we built for them.
By the way, everything is proprietary, which is also a very unique story in the industry because typically brokerages provide third-party tools that are not really integrated. At Real, everything is integrated. On the technology front, we focus our technology on four main pillars. One is productivity. Everything that helps agents save time and make more money, from CRM to 24/7 support to education module, everything they need in order to process a transaction. The second pillar of the technology is marketing. Here, we took a very conscious decision not to create a consumer-facing brand. Nobody chooses an agent today based on their brand affiliation. Nobody goes into a Coldwell Banker office saying, "Hey, I need an agent, and I came here because I heard that Coldwell Banker has great agents." People choose agents because they know that that person is an expert in the area.
Maybe they worked with them before. Maybe they helped a friend. We decided that we are going to help our agents brand themselves within their communities and not create a consumer-facing brand. Everything that agents need from business cards, yard signs, brochures, listing presentations, personal branded website, everything is offered to them via Real at no added cost. Everything is a part of the package. The third segment of technology is community. We do not have offices for the agents to use, but we do understand that agents want to feel a part of something bigger. We have a community feature, which is like a Facebook chat where agents can either chat one-on-one or at groups. They can ask questions. They can exchange leads. This community really replaces the need for physical offices, and the interactions and the engagement in the communities is pretty impressive.
The fourth segment of technology is brokerage operations, and this is probably our biggest moat. We took a hard look at all of the actions, all of the processes that are being done at the back office of a brokerage, everything that has to do with support, with transaction management, with contract reviews, with payment processing, and we just automated it to the full extent possible. I'll just give you an idea of what it means. Typically, at a brokerage, you would have one full-time employee for every 20 agents. You're probably familiar with Compass. Compass has one full-time employee for every 12 agents. Our ratio is 1/ 88, and that number continues to improve. That is due to the fact that we just automated everything that can be automated. This enables us to scale faster and just grow our profitability as we grow our agent count.
On top of that, we were the first company to introduce AI or a copilot for our agents to use. We introduced Leo more than a year ago. Leo, our AI assistant for our agents, currently answers more than 2,000 agents' questions a day. Just try to imagine how many people, how much more headcount we would need in order to answer 2,000 agent questions. Leo also drives customer satisfaction. Agents get their answers immediately. When they need anything, Leo is there to help them. If they need to create a listing presentation, if they need to draft a contract, if they want to ask anything about their business, Leo is there on the app 24/7 to support them. Another reason for agents to join us is culture.
Probably culture does not mean too much to the people in this room when it comes to the real estate brokerage. Agents want to be with a company where they can collaborate versus compete with other agents in the office. They want to be able to grow something together. The fact that all of our agents or most of our agents are shareholders and the fact that we managed to build a culture of collaboration over competition created a lot of buzz in the industry around Real. People know that when you join Real, you have an opportunity to collaborate and learn from the best in the industry. That attracts a lot of agents and a lot of teams who want to be a part of this and want to build together with us. I talked about the efficiency metrics.
The efficiency is going to improve as we grow. We will implement more AI. We will implement more automation. At the end of the day, brokerage is a low-margin business. The more you automate, the less you rely on humans for processing of transactions, you will win and you create a massive moat. Most of our peers, the traditional ones, are spending a lot of money on headcount and office expenses. This is something that we completely eliminated. A couple of years ago, we realized that while we operate a fast-growing brokerage, there is an opportunity to monetize transactions in a much better way. On the brokerage side, we have gross margins of about 9%. Over the past couple of years, we made a couple of acquisitions. We acquired a title company and a mortgage company. Those businesses have very high margins.
On title, we have over 80% gross margin. On mortgage, we have over 50% gross margins. We are now starting to scale those businesses. Both businesses are still nascent. They're still startups. As we grow, as we attract more agents that will bring their transactions into the platform, we want to be able to attach more ancillary services to every transaction. We're doing it in multiple ways. One, on the title side, we're offering our agents to become partners in a joint venture where they can actually make money out of title services if they send their transactions to the title company that they're a part of. We're adding some features on the technology side on our app that will help us incentivize agents to actually send us their deals.
Looking forward into the future, if we're able to attach more and more transactions, currently the attach rates are about 4% on title and 2% on mortgage in the markets that we operate in. If we take those attach rates and increase them over time and hopefully get to double-digit attach rates, the profitability pattern or profile of the company changes dramatically. On one hand, we're growing the brokerage. We're attracting more and more transactions. Then we're putting more services, high-margin services in place that will help us monetize and become more profitable. Another interesting initiative is Leo for Clients. I don't know how many of you have purchased a home in recent years, but buying a home is not a great experience. It lacks transparency. It takes a long time. It's not fun. It creates a lot of frustration.
When we look at the experience that we're having in the tech world with other companies, we think that there is a tremendous opportunity in creating a different kind of home buying experience and home selling experience directly for consumers. Up to now, all of the technology that we built was for our agents. Now we're starting to build technology for our agents' clients. Leo for Clients is our AI tool that is going to be available for every agent at Real. Every agent will have their own phone number. That phone number will be powered by Leo. Leo will be able to take clients from the initial conversation about what kind of home are you looking for, what's important for you, which area are you looking at, what's your financial situation, let's get you pre-qualified for a mortgage.
All of those things Leo can actually be engaged in and take the client from thinking about buying a home to touring homes and then up to closing in one single place. Leo is going to be there 24/7. We are now training Leo to have voice capabilities. Every agent can actually teach Leo on using their own voice. When Leo answers the call, clients can, they will think that they are talking to the agent. Even though there will be a disclaimer, they will know that they are talking to an AI. We think that 80%-90% of the tasks that agents perform for clients can be automated or replaced by AI. In the future, we might face a scenario where there will be fewer agents in the industry doing more volume because of AI. We want to be at the forefront of that.
Leo for Clients is going to be available later this year. Another interesting product that we launched back in October of 2024 is the Real Wallet. Currently, or before the Real Wallet, when agents close a transaction, we would collect the commission check, and then we would deposit the agent's portion of the commission directly into their own bank accounts, Bank of America, Wells Fargo, whatever it may be. With the Real Wallet, agents can opt into a digital wallet on our platform. We monetize those wallets in three main ways. One, if agents keep deposits in the wallet, we make interest on the float. Number two, because of the fact that we have so much visibility into everything our agents do, we know exactly how many pending transactions we have. We know how many transactions they closed in the past 12 months.
We know how much equity they have in the company. We know how much revenue share they're doing from attracting their friends. We have full visibility into everything they do. We can underwrite them for credit lines. The wallet has a credit line feature, which is currently only available in Canada. We're rolling it out in the U.S. as well. Agents can actually draw from that credit line. They can use that money to purchase leads, do whatever they want. This is a benefit that does not exist anywhere else. Obviously, if agents want to have a credit line for their business and they go to a traditional bank, a traditional bank does not know how to underwrite them, and they will often decline them. The digital wallet, the Real Wallet, is a program that we launched back in October. It's scaling very rapidly right now.
It's at an annual revenue run rate of about $1 million. We have over 3,000 agents that opted in. Credit lines are still not available in the U.S. It's going to be pretty massive once we roll it out in a few weeks. We do envision a world where Real Wallet is mandatory. Agents will not get paid outside of the wallet. Just think about our last year revenue, which was $1.3 billion. Think about that revenue flowing into the wallet, some of it staying in the wallet, some of it converting into lines of credit. It's a huge revenue potential for Real. Just to kind of wrap it up, we have demonstrated that we grow in great markets and in the worst possible market, real estate market, in the past three decades. We will continue to demonstrate above-market growth in years to come.
We own our own technology that enables us to expand and add additional features, add additional monetization opportunities, such as the wallet, for example, such as mortgage and title. In the future, we intend to continue and grow our agent base and also inject more and more ways to monetize transactions with high-margin services.
All right. Great. Thank you, Tamir. Yeah, we'll do a little bit of Q&A before we move to the breakout. I guess just first, I mean, the agent growth has been phenomenal. Maybe just talk about the pipeline you're seeing right now for the rest of the year. Is there a portion of the platform and what you're offering that's resonating more with clients? Maybe just talk about the buckets of kind of where you're recruiting from and what's resonating with agents.
About 85% of our growth is coming from referrals from existing agents. We have a revenue share program where if an agent refers a friend to the company, that agent enjoys the revenue that is or portion of the revenue that is generated by that other agent that just joined. The remaining 15% is just inbound inquiries. I think that there's just currently, there's a lot of pain in the industry. Agents are struggling. The transaction volume is super depressed. That causes a lot of non-performing agents to leave the industry. I think that this is a theme that we have seen in 2024 across the industry. It is actually accelerating now just because the market is even deteriorating. Our pipeline is strong. I would note that we do see that it takes a little bit more time to convert.
Especially the high-performing teams, they tend to take a little bit longer right now because they do not want to create any additional shock to their business just because the market is so bad. They do not want to change. Sometimes they are coming to us and saying, "Hey, we have to change all of our marketing materials if we switch over to Real, and this is going to cost us $3,000." They pause over really small amounts. On one hand, it is funny. On the other hand, it is painful. We try to help them as much as possible. I think that strategically, if you are an agent or if you are a team leader and you are struggling at the moment, you should be looking at ways to cut costs.
Switching to a company like Real or a platform like Real, on one hand, helps you save a lot of cost and on the other hand, creates more opportunities for you to monetize your business in more ways.
There is a ton of small independent brokerages out there. What do you think happens to them over time? How are you kind of actively going after that opportunity?
It's funny. I had a conversation last week with someone who runs a 90-agent brokerage in L. A., one of the biggest players over there doing massive volume. He said, he's a smart guy. He said, "When I'm thinking about the future of my business 10, 20 years from now, I realize that I will never be able to compete with folks like Real. I will never be able to offer my agents so much value as you can.
I will never be able to process transactions as cheaply as you can. The smart thing to do is join a platform. I think that if you look at the average commission rate in the past 30 years, you can see that there's a slow decline in the total commission that's paid on a transaction. I think that that will continue. At the same time, there's a lot of pressure on the actual commission split that agents are putting on brokerages. Companies like ours are just adding to that pressure. I think that I'm not very bullish on the future of small independent brokerages just because I think that larger companies like ourselves can offer more value at a lower cost. Those small brokerages just do not have the means to build the technology to automate their businesses.
We will likely see more consolidation in the field. Having said that, there will always be those niche brokerages, local brokerages that have the local branding that have been going on for years. There is room for that. I think that most brokers or brokerages are just not making money, and they need a plan B.
Makes sense. Maybe on agent churn, it's an industry that has a lot of natural churn. You're talking about agents leaving the industry. You're not immune to that. Do you think your churn rate is more driven by industry dynamics? Is there anything you can do to reduce that? I know it's a lot of lower-producing agents that are churning off. Maybe just talk about, is there anything you can do to better help people scale their businesses? How are you thinking about it?
Agents are funny people. Sometimes they just switch brokerages just because that's how the industry behaves. For a typical brokerage, a churn rate of 20% a year is normal. In our case, we track revenue churn because you truly care about the agents that are closing deals and contributing to revenue. You don't mind if an agent that doesn't close any deal switches over or leaves your company. Our agent churn last quarter was in the range of 7.5%, I believe. Our revenue churn was 2.5%. There is a big gap between agent churn and revenue churn. We have to understand that this is a high-churn industry, and you want to be able to retain the high-producing agents. At the same time, it is what it is. When you ask agents, "Why did you switch?" you get all kinds of answers.
It doesn't matter if you're the cheapest. They will still leave you. If you provide the best technology, they will still leave you. You just have to live with some level of churn. You need to make sure that you're retaining the agents that contribute to the revenue.
Maybe on the ancillary solutions, and specifically thinking about mortgage and title, what are the big stepping stones you need to get to get the attach rates up? You're talking about 4% in title, 2% in mortgage. What are the stepping stones to get those higher? Where do you think they can get to over time?
The biggest hurdle is the fact that every agent has their title person or their lender. They trust that person because they have been working with that person for a while.
They know that their lender or their title person can make sure that the transaction closes. At the end of the day, agents care about their commissions. They want to make sure that they work with people that can ensure that they will get their commission at the end of the transaction. From our perspective, we own a title company and a mortgage company. A lot of our agents are just not aware that we own those companies. We would expect them to drive a little more attachment just because of the fact that they're shareholders in the company. They have an interest in scaling those businesses. For a very long time, we were trying to find a way that is RESPA compliant.
RESPA is the Real Estate Settlement Procedures Act that prohibits title companies and mortgage companies to pay any kind of incentive to agents for referring their friends. We finally found something which internally we called ECP, Early Commission Payment. As of now, agents who refer their clients to our mortgage company will receive their commission ahead of closing. We eliminated that dependency on that lender that I've been working on for 10 years because I know that that person will help me close the deal so I can get my commission. We are able to receive signals from our mortgage company that the transaction is moving along so we can actually pay the agent ahead of closing, weeks ahead of closing. That, we think, will create a huge incentive for them. Obviously, this is something that agents are not used to.
Agents are used to getting paid at closing. It will require some market education. We are now testing it on the mortgage side. We will test it or we will roll it out to the title side. We believe that that will be a huge accelerator in adoption.
Maybe just last one from me. You did announce, and maybe this is more for Ravi, but you did announce the $150 million share repurchase authorization, I think, earlier this week. Maybe talk about that decision, how you plan to use it or.
Sure. We have the Agent Equity Program, the stock purchase program that allows agents to carve out a portion of their commission to actually purchase company shares. If they are with the company for a year after the closing of that real estate transaction, they receive a bonus from the company.
We facilitate that program through a buyback or partially through a buyback. This is why we announced the $150 million. We expect the company to continue and grow. We expect to become more and more active in the marketplace. We now switched from being tied to Canadian regulation on the buyback to being tied to SEC regulation, which allows us more flexibility, being more aggressive. The Canadian regulation allowed us to purchase up to 5% of the daily volume. Now we can go, I think, as high as we want. The $150 million in buyback were primarily focused on fulfilling the demand from our agent.
I think we've got maybe time for one question from the audience if anyone has one. Yep.
Growing like a leaf, you're still not profitable. Is there a path to profitability?
Yeah. Obviously, there is a path to profitability.
We're improving profitability all the time. As a high-growth company that also invests heavily in technology, in R&D, in building future products that will drive margins, it was kind of a conscious decision to try and balance the two. If you look at our profitability over the past four years, you can see a constant improvement. We are working towards net profitability or operating profit. We don't really provide guidance, but that's the goal.
Is your $12,500 cap sacrosanct?
Is it what?
Is your $12,500 cap sacrosanct? Can you raise it?
It's $12,000. It's not $12,500. We actually did change the model in Canada now. We increased it to $15,000 in Canada. We increased some fees in Canada. We do think that over the past two years, we made a couple of model changes. We introduced a few new fees, and we increased some fees.
We do not really want to change the $12,000 cap in the U.S. But we do think that there is an opportunity to change the model in a way that will drive more economics outside of the $12,000 cap.
Thank you.
Is the referral fee indefinite, or does it have a life to it?
As long as the agents are with the company, the revenue share is earned. One thing we did last year is we capped how much the company pays to the agents. It was uncapped before. We capped it at 60% of our gross profit of our split, so 60% of our 15%. And obviously, there is an opportunity in the future to optimize that even further.
All right. I think we will call it there. Thank you, Tamir, so much. And the breakout is going to be upstairs in Genevieve.