Good afternoon. Thanks, everyone, for joining us. Last session here at NGC, day one. My pleasure, I'm Bernie McTernan, one of the internet analysts here at Needham & Company, and my pleasure to, for the fourth time, share the stage with Tamir Poleg, at NGC, Founder and CEO of Real Brokerage. Thanks for joining us.
Happy to be here. Thanks for having us for the fourth time.
For the fourth time. Maybe just to start, so just as we were talking in the hallways and just kind of getting the perspective of where the company's been over the past four years, we'd love just to get your sense in terms of just where you sit, just in terms of the size and scale where you are now versus where you were four years ago, and maybe what opportunities are available to you now and how you think about the world just because of that scale versus maybe a couple of years ago.
Yeah. So we are a real estate technology company. We started back in 2014. We've enjoyed tremendous growth over the past five years. Even though the market has been kind of down, the real estate market has been down since 2022, we managed to grow dramatically. So if we go back to the beginning of 2023, I think that in 2022, we did around $300 million in revenue. Right now, we're on pace to exceed $2 billion, so kind of 7x within two, three years. And I think that what we managed to do well is attract and retain high-performing agents. This is how we monetize. We monetize our business through splitting commissions with our agents and enjoying some fees. And recently, we started getting involved in mortgage title and some fintech products as well, trying to monetize transactions in multiple ways.
So I think that as we scale and as we go into the future, we demonstrated our ability to grow despite market conditions. So I think that we will continue to add more agents and grow our transaction count. And alongside that, also monetize transactions in multiple ways, whereas in the past, we were just splitting commissions with agents. Right now, we have multiple revenue avenues.
Right. OK, great. And then maybe just to level set, I probably should have started with this question first, but can you just describe maybe Real versus maybe a traditional, I don't want to say full-service brokerage, but just how business model may be different than like a Compass, for example?
Sure. All agents have to be affiliated with a brokerage. There are 1.5 million agents in the U.S. and other 150,000-160,000 in Canada. All of them have to be affiliated with a brokerage. It could be a big name like RE/MAX or Real or Keller Williams or a small independent brokerage. What we had in mind back in 2014 when we analyzed the landscape and we tried to think as a real estate agent, we saw that agents don't really have a choice. Whether they go to Keller Williams or RE/MAX or Century 21, they end up paying a lot of money and getting very little value. And we thought that there's an opportunity to drive better value at a lower cost for agents. And this is what we were trying to do.
So right now, the value that we deliver starts with the ability for them to have a lot of freedom and flexibility in the way they build their business. We are a platform. We're not like any other brokerage that forces you to go to an office and do things in a certain way. When they come here, we treat them as small businesses, and we give them everything that they need in order to succeed. So number one is the freedom and flexibility. Number two is the favorable economics. The average agent at Real will end up paying half compared to what they're paying at a traditional brokerage. Number three is the technology suite. We have developed an entire operating system for agent businesses. So think about a small business. Everything that they need from marketing to productivity to visibility, everything is supplied by us.
It saves them a lot of money and a lot of time on every transaction. The two other reasons why they're joining us is culture, which is very unique here. At Real, we're collaborating versus competing, so agents are not sitting in the same office. We don't have office spaces for agents, and we managed to build a very collaborative environment, and number five is the different monetization opportunities. Typically, when you're an agent and you're working for a traditional brokerage, the only way you make money is through closing deals, and at Real, you can earn money in multiple ways aside of closing deals. You can refer your friends to the company and share the revenue with us. You can be a part of our title joint ventures. You can become licensed as a loan officer.
So we look at your business as a potential, and we try to help you monetize everything in a better way.
Right. There's just an incredible amount of momentum in the business. As of September, you've added 8,500 agents on a net basis over the past year. Can you just talk about that agent acquisition process? How much of that is agents coming to you versus an outbound effort to recruit?
Sure, so pretty much 100% of our growth is organic and inbound. We don't spend any upfront money on cost of acquisition. What we did put in place is a program that turns our existing agent base into our affiliates and incentivizes them to go and attract their friends in different geographies, so about 85% of our growth is coming from referrals from existing agents, and then the remaining 15% is coming from inbound inquiries of agents and teams just reaching out to us and saying, hey, we're interested in learning more. It's a very effective model because we don't pay anything upfront, and if agents are successful in attracting their friends, we share the economics with them, but we're kind of de-risking the business by not paying any upfront marketing costs.
Right, right. And where do you think agents are coming from? As you mentioned, there's these larger brokerages, but then there's just a long tail of mom and pop, too, which I think is like 40% or 50% or maybe more of the industry. Where do you think your agent adds are coming from?
So the past couple of years have been very challenging for the industry. We've seen a lot of agents just churning and leaving the industry just because transaction volume was down 25%, 30% from the peak. And we are pretty much the only player that managed to grow organically throughout that period. So as you mentioned, we had about anywhere between 5,000 to 10,000 agents net on an annual basis in the past three years. We take market share pretty much from everybody, from the small mom and pop shops and from the big names. We don't have one single brokerage that we're taking market share from. We're pretty much taking market share from everybody.
About two years ago, we put in place a program called Private Label that allows independent small brokerages to come over to Real as a brokerage and operate under our umbrella while keeping their branding. And about 15% of our growth is coming from that segment of small brokerages that understand that they cannot provide the same value as us, and they just want to come over, but they don't want to give up their branding and kind of market reputation. So that program allows them to benefit from everything that Real offers while keeping their branding.
Wow. And that program's only a couple of years old, maybe one or two years old, right?
Yeah. I think it's less than two years old, and yeah, it accounts for about 15% of the growth.
That's great. You mentioned agent churn. And I love your earnings press release. There's a lot of data in there. But seeing how so the revenue so you have agent churn, but you have agents fall off that aren't selling any houses, and that revenue churn's a lot lower. And so you said beforehand a lot of it in the 4% range. Now it's in the 1s. What's happened over that time? Because usually, as the base grows, like you would think.
Yeah, so we're operating in a high churn industry, and typically, agents switch brokerages every three years, but what you really want to monitor is the churn of the agents that are contributing to revenue. Because there are a lot of agents that come into the industry, they do nothing, and then they churn after a year or a few months, so our agent churn has been around 7% per quarter, but our revenue churn, which is kind of the churn of agents who actually contribute to revenue, has been in Q3, it was 1.4%. That's the lowest number we've had in many, many years, and I think that that's a testament to, one, the value that the platform provides, and number two, the stickiness. Just because agents build multiple assets on top of our platform, thinking about switching means that they're leaving a lot of money on the table.
So I'll just give an example. We have a share purchase program that allows agents to become shareholders or elects to receive a portion of their commission revenue in stock, and that stock vests over three years. If I were to leave Real today, I would probably leave money on the table. So the platform itself just becomes stickier and stickier because of all of the different services that we're developing, and those numbers manifest in the churn.
Right. And I'm assuming the referral program is the same way, where if you leave, you're not going to be getting referral checks anymore, too.
Correct.
Right. Makes sense. Well, you guys are always bringing new products to market. And I've had a conversation with your CTO before. He was very impressive. What are some of the new features that you've added recently, and what's resonating with your agents right now?
I think that what agents are most excited about right now is everything that we're doing around AI. So we started by launching Leo, our AI assistant, for internal use. So Leo had visibility into everything that agents do on the platform. Leo could look at their contracts, look at their financials. And whenever they had questions, they could go to Leo instead of going to our support line. In the third quarter, about 10,000 support tickets were handled by Leo, which is around 50% of our support tickets.
1, 5, or 5-0?
5-0.
5-0, yeah. Sorry.
So Leo is helping us provide a better service to our agents and helps them have everything kind of handy. So you can reach out to Leo and say, hey, I'm looking for that form, or please prepare a listing presentation. Leo knows how to do everything. But what we are now doing is making Leo consumer-facing. And this is what agents are getting excited about, because Leo would be able to have conversations with your buyers and sellers and nurture them if they're just leads and get them to a point where they're ready to transact. I'll give you an example. In a couple of months, every agent will have a dedicated URL and a phone number, and you could put the phone number on all of your marketing materials.
And if somebody is interested in buying a home, Leo would have that conversation with that person, asking them what kind of property they're interested in, what their preferences are, what's important for them, what their financial situation is. Leo would be able to pre-qualify them for a mortgage. And Leo will be kind of the assistant that will take them from thinking about buying a home to closing in one single place. So obviously, agents are excited about that because it's going to turn them into super agents. If you were able to handle, I don't know, 10, 20 clients a year or closings a year, Leo can 10x that.
Will the person know they're talking to an AI agent?
Yeah.
OK, so that'll be.
Yeah. Leo will present itself as.
As Leo, the AI agent.
Yeah. But you can actually train Leo on your voice. Leo has text capabilities and voice capabilities, and you can choose from different kinds of voices. But you can also use your voice. Leo can use your voice.
Right. I mean, what's the and so you said it's launching soon. It hasn't launched yet.
It's now in alpha testing, so.
Alpha testing. What's like the initial thoughts from the consumer on that?
It's kind of mind-blowing, to be honest.
Yeah.
We're running a couple of tests right now with some of our top teams, where they're sending us all of their CRM data, so all of their past leads, and Leo is engaging in conversations with those leads. For some teams, we're talking about 200,000, 300,000 people that Leo is now nurturing in the background until that moment where they're ready to transact, and then they notify the agent. So that's test number one. Test number two is they're creating paid online campaigns, and then instead of an agent picking up the phone when the lead is calling or when the lead is emailing, Leo is actually doing that for them. So you don't need to rely on humans anymore or the human availability. You have Leo available to speak with your clients 24/7.
Right. So what agents is this most helpful for? Is that helping the agents with the huge Rolodex? Is it helping new people?
Everybody. Everybody. I think that it's most helpful for those agents who know how to generate leads in an effective way.
I mean, would it be helpful for a Zillow Flex agent who's like.
Yes. 100%.
Is that exactly who this is going to be?
We have some Zillow Flex teams on that pilot.
Yeah. I mean, that seems like a home run.
Yeah. Yeah, because Zillow requires you to answer the phone within a few seconds. And a lot of team leaders are just frustrated with the fact that their agents are not picking up the phone. So they get into trouble with Zillow. And yeah.
Okay, interesting. And I know it's still in alpha, so maybe it's all being straightened out. But how does that handoff happen from, okay, Leo pre-qualifies this person. Now it's going to me, the agent. I'm assuming it would be a bad customer experience if all of a sudden they had this introductory conversation again. The point is that the person probably thinks that the agent should know they gave the life story to Leo. Hopefully, Leo passes that life story on to the.
That's a good question. So in the background, what we also built is some type of a CRM. We call it ARM, so Artificial Intelligence Customer Management System. Every conversation that Leo is having with your clients, a summary of that conversation goes into that ARM so that you're notified every time that Leo is having a conversation with a person. You're getting a summary of the conversation. If there are any next steps or action items, Leo notifies you and tells you, hey, Bernie, this is what you need to do with that person.
Right. OK, really interesting.
So you're on top of everything. And as an agent, you can also disable Leo and just say, OK, I'm taking over the conversation from now on.
Right. OK. That's cool. Maybe I certainly have more questions on the business. But since we're halfway through, I wanted to make sure that we touch on the market. What is your outlook for the housing market in 2026?
I think.
You were pretty bullish last year when we spoke, and then.
Was I?
Yeah. I think I was.
I was always.
I know. That's why. That's why I stuck out.
I was always on the more conservative side. I think that there's a little bit more optimism in the past two weeks or so. The fact that.
Trump stuff.
Yeah, that the president is convinced or determined to impact affordability. I think we'll see a better existing home sale figure in 2026. I don't think it's going to be dramatic. I think we're looking at maybe 4.3 million homes sold. I mean.
That would be bad, though. I mean, if prices stay the same, a high single-digit growth would be pretty good.
Yeah. I mean, we've been at a trough for three years now.
Yeah.
And I think that there's a lot of demand that has been building under the surface. Affordability is still a challenge, but I think that people are still interested in buying home. The inventory part or the supply part is pretty much behind us, so there's sufficient supply. It's just about unlocking the demand at this point. So I think.
Has he started reaching out to leaders in the industry?
Who's he?
Oh, Trump.
He hasn't reached out to me.
Not to you. OK. OK, interesting. And then so 4.3 is a lot better than 4. But what gets us back to 5.25, 5.5?
Just time, I would say. So affordability is a factor of mortgage rates, home prices, and people's salaries. I don't think that home prices are coming down. I mean, mortgage rates will come down, and I think it'll take some time until salaries catch up. So I would say we'll go back to normal within maybe three, four years.
What interest rate unlocks it? Does it need to have a four handle? Can something in the fives do it?
Yeah, I think low fives.
Low fives can do it.
I mean, people got really excited now when it's $599 or $595.
Right.
But yeah, low fives, I think.
Do you expect the administration to do other things aside from just trying to bring down mortgage rates? But they did a couple of administrations ago, like the first-time home buyer credit, other things like that.
I think they can do a lot of things. I think that there's work that can be done on zoning and just helping the supply side. Maybe it's less on the administration, more on a local basis. I think that they should consider some incentives for developers and builders. There are things that you can do on the cost of labor or cost of materials in building new homes. I think that if the president decides that he wants to bring either prices down or affordability up, then it's probably going to happen.
Right. I don't disagree. OK. And another hot topic that's been kind of, I would say, sweeping the industry to an extent is just inventory and private exclusives. Just what's the real thesis or point of view in terms of going wide versus keeping stuff? Is there any direction from the top down that you guys are telling your agents?
I think that the entire discussion around private listings has been kind of propelled by one single company. Private listings have been around pretty much forever, and it's always been a very, very niche thing. I think that at the end of the day, it's all about what's best for the consumer. And if I were to sell a home right now, I would want to have as much exposure to my listing as possible and get as many offers as I can. So obviously, I would want to put it on the MLS. I would want my home to be on Zillow and other platforms. I think that private listings is more appealing when you're talking about the higher-end markets and for people that are not really convinced that they want to sell, but they want to test the waters. So we'll continue to see that.
For us, we have the ability to start a private listing website or internal website probably overnight, but we haven't seen the need for that.
OK. Maybe speaking of that company that you just alluded to, any thoughts on the big acquisition that just happened in the space?
I'm happy for them, and I wish them luck. I think that it's definitely a good deal for Anywhere. I think that it finally places Compass in that bucket of traditional brokerages. It would be interesting to see how they kind of leverage the synergies. But yeah, I don't think that the agents care much about who owns the franchise that they work for. So I guess for agents, it's business as usual.
And so I'm assuming implicit in that response is that you haven't been hearing stuff from your agents about asking about them as a competitor or anything more than that.
No. I think that there was a little bit more chatter when the intention to merge or acquire was announced a couple of months ago. We were also getting a lot of attention from Anywhere agents that were kind of thinking about the future.
Right.
But yeah, I mean, the closing of the transaction just didn't create any discussion.
So did that drive a bunch of organic agent adds to you guys?
It drove a bunch of conversations.
Drove a bunch of conversations. OK. And I guess we'll see what the results in terms of how many ads you guys have.
Yeah. I mean, I guess that any change drives people to think about the future and contemplate options. I know that a lot of companies are just expecting major churn coming out of Anywhere. I don't think that that's going to happen, to be honest.
Right. I mean, deals close so quickly. It's like you didn't have time to really think about what you're going to do. I certainly have more questions. I wanted to see if there was anything from the audience. But if not, certainly happy to keep going too. Maybe I'll just ask when people are thinking it over. You mentioned attach earlier. So attach and mortgage. Can you just talk about what you're doing in these two areas? And then yeah, we'll start there.
Yeah. So we own a mortgage company and a title company on the mortgage side or attach rates. Both of them are nascent businesses. On mortgage, we have about 1% attach rate. On title, we have close to 4% attach rates. On mortgage, what we're trying to do, except for creating relationships or nurturing relationships between our mortgage company and our agent base, is a program called Real Originate, where we allow agents to become licensed as loan officers. And this way, they can actually share the economics on loans that they're sending to us. On the title side.
And sorry, they don't need to choose. They can be an agent and a loan officer.
Yes.
OK.
They can be both.
Got it.
On the title side, we created a JV structure where we invite top teams and top agents in major geographies to become partners in our title joint ventures. This way, they can enjoy profit distributions. This is something that we started rolling out in the second half of 2025. We actually see attach rates north of 30% in those JVs. So they're now scaling, and that's encouraging. I think that the more interesting part is the product aspect of attach rates. So strategically, as a company, we decided to get closer to the consumer. Up to now, we were really agent-facing, and everything that we developed was for our agents' use. But now with Leo and all of our initiatives on AI, we have the ability to have conversations with the end client, with the buyers.
And we think that by having those conversations, we will be able to introduce our mortgage company, title company later on, home warranty, home insurance. So we think that Leo has a substantial opportunity to help us on attach rates.
Right. Yeah. I mean, that's why I was going to go, Leo should be better at attaching just if.
Yeah.
The Leo knows the script.
Leo knows.
Knows all the scripts.
Correct. And you might be asking, OK, why me as an agent? Why should I introduce Leo to my client? Obviously, Leo will help you close that transaction.
Start as a Leo's client.
But the nice thing is, obviously, because of RESPA regulations, you cannot incentivize agents or give them anything of value in exchange for them sending you their clients to your mortgage or title company. What we managed to do is create a mechanism where, beginning in Q3 of 2026, we will be paying our agents for minutes of conversations between Leo and their clients so that if you have a buyer, you will send that buyer to Leo, and you will get paid for every minute that Leo is engaging with that client.
You get paid.
You get paid as the agent.
As the agent is paid.
Yes. So that's an incentive for you. You would want as many people to talk to Leo as possible because you will be monetizing that. And for us, it's an opportunity to get in front of the consumer and offer additional services.
Interesting. I mean, you would think agents would want their clients to be talking to Leo just organically. Like, why do you?
But that's just an added incentive. Think about an agent that spends a lot of money on lead acquisition. That's a way for them to lower their cost per lead just because we pay them back a couple of dollars or whatever the amount would be.
OK. Interesting. I mean, how do we make sure that doesn't blow up the P&L? We're just talking small dollars and.
I mean, Leo will be smart enough to determine whether that person is a real conversation or you just sent whatever, a friend.
Yeah.
And also, kind of the ticket item wouldn't be large enough for you to try and scan the system.
OK.
But it wouldn't be as if you're talking to Leo and you're silent for 15 seconds. You're not going to get paid for that.
Right. OK. Understood. Maybe just automation. I mean, this is one of the, I think, first uses of AI almost on the platform, where or maybe AI is the wrong term, but just I think you guys were early in terms of just automating the whole transaction. Can you just talk about where you are now in that process, and I mean, yeah, like how many transaction coordinators you need and stuff like that versus maybe others.
So real estate brokerages as a whole, in concept, are real estate transaction processing machines. This is what we do. We take files and we turn them into commissions. But on the way, we need to do a lot of things such as reviewing contracts and supporting the agents and all of those things. And we try to automate as much as possible throughout the process. I'll just give you an example since we mentioned Compass. Last quarter, Compass closed, I think, 60% more transactions compared to Real. We have 11 people on our transaction management team, and they have north of 300, I think, close to 400 people. And that's due to all of the automation that we put in place.
So for example, if we're talking about AI, as a brokerage, we have to review every document that our agents sign with their clients, so purchase agreements, addendums, all of that. And we need to make sure that the file is compliant, that all of the boxes are checked, that they did not forget any initial. Leo is now looking at those contracts and reviewing them instead of a human and then reverting back to the agent saying, hey, you're missing a signature on page three, and you're missing the lead-based paint addendum. So that saves a lot of time on our end. As I mentioned, about half of the support calls or tickets are now handled by Leo.
But what we really managed to do is save a couple of hours of human work, human labor on every transaction in a way that right now, for us to process a transaction, it's probably two to three minutes of human labor.
Wow, and what would have been a couple of years ago?
Probably two hours.
Yeah. Jeez. EBITDA margins have been the highest I think they've ever been. And so I know gross margins are low. I mean, that's typical for a brokerage. You guys pay out a higher split, too. But is it just the scale that's gotten us there? Or what's been able to drive margins to the level that you are now?
It's scale. It's technology. It's really focusing on OpEx per transaction, which is a figure that we managed to reduce over time. And there's still a lot of operating leverage in the business. So I think that as we grow, that figure of OpEx per transaction will continue to decrease, and that will slow down to the bottom line.
Right. What did happen? I saw headcount did pick up a little bit, even excluding the mortgage and title. Is that like engineers working on some of this AI stuff? Or what's?
It's engineers and some things that are related to doing business as a public company, so SOX compliance and things of that nature, which I'm not happy spending money on, but you have to.
You have to.
But yeah, we are investing heavily in technology, and we think that that will pay back meaningfully in the next couple of years.
Yeah. That sounds like it will. Maybe just to conclude here, leave an open-ended one. Just what would make a successful 2026 for Real?
I think that we demonstrated that we can continue to grow despite market conditions, so on one hand, we want to add more agents and more transaction count. I think that the company is very focused on gross margins and just monetizing transactions through high-margin services, so on title, we have over 80% gross margins. On mortgage, we have 50% gross margins. Real Wallet, which we didn't really spend time on, 90% gross margins, so we want to continue and grow those services alongside growing our agent base.
Got it. Well, perfect. Tamir, thanks again.
Thanks again.
Thanks everyone for joining us. Appreciate it.
Thank you.
Great. Nice job.