The Real Brokerage Inc. Stock

Good morning, ladies and gentlemen, and welcome to the Real REMAX Group Earnings Call for the Third Quarter ended September 30, 2026.

[Operator Instructions]

I will now turn the call over to Alex Lumpkin, Chief Legal Officer at Real REMAX Group. Alix, the floor is yours.

Thanks, and good morning. Thank you for standing by, and welcome to the Real REMAX Group Conference Call and Webcast for the Third Quarter Ended September 30, 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 President; and Ravi Jani, our Chief Financial Officer.

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. Many factors could affect future results and may cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements.

These factors include those described in our earnings release and our SEC filings, including those under the caption Risk Factors contained in our quarterly report on Form 10-Q most recently filed with the SEC. Real REMAX Group assumes no obligation to update these forward-looking statements, except as expressly required by law.

Today's conference call will also present certain non-GAAP financial measures, including adjusted EBITDA and adjusted EBITDA margin. For more information about these non-GAAP financial measures and a reconciliation to the most comparable GAAP measures, please see our earnings release posted on our website.

With that, I'd like to turn the call over to Chairman and Chief Executive Officer, Tamir Poleg. Tamir, please proceed.

Thank you, Alex, and good morning, everyone. Real REMAX Group is a global technology-enabled real estate company built to improve how real estate works for the professionals at the center of every transaction and ultimately, for the buyers and sellers they serve. We attract and retain productive real estate professionals through compelling brands and attractive economics, help them build stronger businesses through differentiated technology and support and expand the products and services available to them and their clients over time.

When we do these things well and execute with financial discipline, we expect to deliver sustainable growth, margin expansion and long-term value for agents, franchise owners, consumers and shareholders. On August 24, we closed our acquisition of RE/MAX, and today marks our first earnings call as a combined company. I want to start with the headline. In just over 2 months, we've made substantial progress, and we believe we're well positioned to deliver strong growth in adjusted EBITDA and substantial free cash flow even if the housing market gets worse before it gets better.

Let me share a few highlights. Third quarter revenue was $728 million, up 28% year-over-year, including approximately 5 weeks of contribution from the RE/MAX business. Adjusted EBITDA was $34 million, up 66% year-over-year. We've already actioned more than $40 million in annualized gross cost savings, including over $28 million in adjusted EBITDA synergies. And we're introducing our initial 2027 adjusted EBITDA outlook of $175 million to $190 million. I want to put that outlook into perspective.

The housing market has been operating near trough levels for the past 4 years. The recent increase in mortgage rates has further delayed the recovery that many, myself included, had anticipated. Beginning in September, we saw an uptick in the number of agents leaving the industry altogether. Real REMAX Group was not immune. Over the past 2 months, we've proactively offboarded more than 1,000 agents, many of whom allowed their real estate licenses to expire or left the industry. That brought Real Brokerage's agent count to approximately 36,200 as of this week. Importantly, these departures were concentrated among agents contributing very little revenue to the business.

So as we look to 2027, we're preparing for another very challenging year. We expect existing home sales to decline, average home prices to fall and for agent attrition across the industry to remain elevated. Even in that environment, we have unique opportunities to create value that don't require a housing recovery. These include organic market share gains at Real, significant cost savings and operational improvements at RE/MAX and continued growth and margin expansion across our ancillary businesses.

Technology will play a big part in that. As an example, last month, we introduced Leo Pro, the next generation of our AI platform with more than 300 specialized AI agents designed to help real estate professionals run and grow their businesses. Historically, reZEN and Leo Copilot primarily helped agents manage their transaction pipeline and back-office functions more efficiently. With Leo Pro, we are taking the next step. We're moving beyond helping agents save time to helping them make more money.

With Leo Pro, we are equipping agents and broker owners with an entire team of AI agents working for them 24/7, helping with marketing, social media, lead generation, market analysis and even communicating directly with clients. These are functions that traditionally required hiring additional staff, paying for multiple software subscriptions or spending hundreds of hours doing the work yourself. With Leo Pro, we can make these capabilities available at a fraction of the cost. And the early response has been very encouraging. Less than a month after launch, we already have over 3,000 agents paying for Leo Pro subscriptions.

We're also thinking about how technology can improve the industry more broadly. Last week, we joined Keller Williams, HomeServices of America and eXp as a founding member of Open Real Estate, a national residential real estate data sharing initiative. The goal of Open Real Estate is to create a more open and efficient way for brokerages to aggregate and distribute listing information, reducing reliance on fragmented systems and giving the industry more flexibility in how that data is used.

We believe agents, consumers and the industry at large benefit when information is more accessible. It's been an exciting 2 months, and I'm encouraged that we're already seeing what this combined organization is capable of.

With that, I'll turn it over to Jenna to walk you through the progress we've made integrating the businesses and where we're focused next.

Thanks, Tamir, and good morning, everyone. We've made significant progress since closing with a clear focus on building a more efficient organization while improving the value we deliver to our agents and franchise owners. To date, we've actioned more than $40 million in annualized gross cost savings across operating expenses and capital expenditures, of which more than $28 million represent synergies that directly benefit adjusted EBITDA. These savings reflect actions we've already taken, not simply opportunities we've identified.

A few examples of what we've accomplished. First, we've reduced our combined headcount by more than 14%, which translates to over 150 positions across the organization while simplifying management structures and consolidating overlapping functions. Second, we've begun consolidating technology systems, vendor relationships and other duplicative costs, including expenses associated with operating 2 separate public companies.

Third, we've moved to wind down underperforming businesses, including Motto Mortgage and [ wemlo ] to focus our resources on areas with greater long-term potential. Motto is a good example of how quickly we're moving. At the end of August, the Motto franchise network had 151 offices in operation, many of which were unprofitable. In just 2 months, approximately 69% of the network or, 104 offices have already closed and 92% of the network is now moving towards termination.

We understand these are difficult decisions, but given the legacy RE/MAX mortgage businesses generated a combined $5 million adjusted EBITDA loss in 2025, these actions are necessary to build a more focused, efficient and profitable organization. Looking ahead, we now expect to realize over $30 million in annual adjusted EBITDA synergies in 2027 and more than $40 million in 2028, well ahead of our initial $30 million adjusted EBITDA synergy target. While the initial phase of headcount restructuring is largely complete, we're continuing to identify opportunities to simplify operations and improve efficiency, and we look forward to sharing our progress in the quarters ahead.

Turning to the operating businesses. Our brokerage business, which reflects the legacy Real Brokerage, continued to significantly outperform the broader housing market during the third quarter. Agent count increased 21% year-over-year to 36,600, while closed transaction sides increased 17% year-over-year to approximately 62,700. These results reflect continued market share gains in a very challenging environment. We've been proactive in managing our agent base as industry conditions have weakened and our focus remains on attracting and retaining productive agents.

In our franchise segment, which encompasses the legacy RE/MAX real estate business, third quarter agent count trends were mixed. U.S. and Canada agent count fell 3% year-over-year on a pro forma basis to approximately 72,100 agents, while agent count outside of the U.S. and Canada increased 4% year-over-year to approximately 76,000 agents. While the North American agent count trends remain challenging, I've spent considerable time with RE/MAX broker owners over the past 2 months and one thing has become abundantly clear. The strength of this brand and the passion of the people behind it are extraordinary.

We don't expect an immediate reversal in agent attrition in the franchise business, but our priority is to improve franchise owner economics and help them deliver a more competitive value proposition to agents and the clients they serve. We are also actively working on initiatives aimed at reinvigorating growth across the network and look forward to sharing more as those plans take shape. As Tamir noted, technology is an important part of that effort. We have already begun alpha testing Real's proprietary reZEN software and AI capabilities for a phased rollout to the broader RE/MAX network.

Our objective isn't to force change for the sake of change. It's to give RE/MAX agents and franchise owners tools that help them become more productive, operate more efficiently and ultimately deliver better service to clients. I'm proud of what we've accomplished in our first 2 months, but we are just getting started.

Ultimately, our success won't be measured by cost savings alone. It will be measured by our ability to improve the economics of both businesses, deliver greater value to our agents and franchise owners and return the RE/MAX network to sustainable growth.

With that, I'll turn it over to Ravi.

Thank you, Jenna, and good morning, everyone. Our third quarter results include the legacy Real business for the full quarter and the contribution from RE/MAX beginning August 25 following the closing of the transaction. Given this is our first quarter reporting as Real REMAX Group, our reported year-over-year comparisons are not directly comparable to historical stand-alone Real results.

To provide additional transparency, we've included historical quarterly pro forma revenue and adjusted EBITDA by segment, assuming the acquisition had occurred on January 1, 2025, in the investor presentation accompanying today's call. With that context, let me turn to our third quarter financial performance. Consolidated revenue for the third quarter was $728 million, up 28% year-over-year. On a pro forma basis, combined revenue increased 20% year-over-year to approximately $770 million compared with a 2% decline in industry existing home sales transactions in the quarter.

Within our brokerage business, Real continued to gain market share, while our franchise business continues to see attrition in North America. Other revenues, which reflect our ancillary business lines, increased 64% year-over-year to $5.3 million, reflecting growth in Real Wallet and One Real Title as well as contributions from acquired businesses, partially offset by a decline in One Real Mortgage, which was impacted by higher mortgage rates in the quarter.

Turning to profitability. Reported operating loss was $72 million in the quarter compared with the $0.5 million loss in the prior year period. Importantly, this quarter's results include approximately $78.7 million of nonrecurring expenses related to the RE/MAX acquisition, including $52.3 million in transaction-related expenses and severance costs as well as $26.4 million in accelerated stock-based compensation associated with employee terminations.

Reported net loss was $67.2 million compared with a $0.3 million loss in the prior year period. Adjusted EBITDA increased 66% year-over-year to $34 million compared with $20.4 million last year. On a pro forma basis, adjusted EBITDA was approximately $50 million for the quarter. Turning to the balance sheet. We ended September with $109 million of unrestricted cash, cash equivalents and short-term investments. In connection with the acquisition, we established a $550 million senior secured term loan facility and a $40 million revolving credit facility, which remains undrawn.

Given our strong cash flow generation, we made a voluntary $25 million principal repayment during the quarter, reducing our outstanding term loan principal to $525 million as of September 30. We also repurchased $4.7 million of our common shares during the quarter under our new share repurchase authorization. Our capital allocation priorities are clear: investing in higher-return organic growth opportunities, prioritizing debt reduction and opportunistically offsetting dilution within the limits of our credit agreement.

Turning to our outlook. This is the first quarter we're providing financial guidance as Real REMAX Group. We recognize that given the short-cycle nature of residential real estate, it's still quite early to provide an outlook for the full year 2027. However, we wanted to give investors and analysts a baseline for modeling the combined company, particularly given the significant changes to our business following the acquisition.

For the fourth quarter of 2026, we're expecting continued pressure on housing activity, including a high single-digit to low double-digit year-over-year decline in transactions per agent at Real and a low to mid-single-digit year-over-year decline in RE/MAX's North American agent count. Against that backdrop, we expect fourth quarter revenue of $575 million to $625 million and adjusted EBITDA of $32 million to $38 million.

Our 2027 outlook assumes U.S. existing home sales decline another 5% to 10%, bringing transaction volumes to their lowest levels in more than 30 years, alongside a 3% to 4% decline in average home prices. Based on those assumptions, we're introducing full year 2027 guidance of revenue of $2.6 billion to $2.8 billion and adjusted EBITDA of $175 million to $190 million. Despite the difficult market assumptions, we expect strong adjusted EBITDA growth driven by continued market share gains at Real, more than $30 million of annual realized adjusted EBITDA synergies and operating improvements across the RE/MAX franchise business.

For additional 2027 assumptions, we anticipate approximately $100 million in stock-based compensation expense, $40 million to $50 million in depreciation and amortization and approximately $50 million in interest expense. We expect to generate substantial free cash flow with our current plan contemplating approximately $75 million in debt repayment in 2027, while continuing to invest in the business. This would put us well on track toward our goal of reducing net leverage below 2x by the end of 2028. More details on our results and key operating metrics can be found in the earnings release, financial statements and investor presentation accompanying today's call.

I'll now turn it back to Tamir.

Thank you, Ravi, and thank you, Jenna. When we started Real 12 years ago, we had a simple goal, always find ways to make agents' lives better. That hasn't changed. And bringing together Real and RE/MAX gives us an opportunity to pursue that mission on a much larger scale. RE/MAX has spent more than 50 years building one of the most recognized brands in real estate with an extraordinary network of productive agents and entrepreneurial franchise owners, many of whom have built multibillion-dollar businesses.

It pioneered a model that empowered agents to maximize their earnings and build successful enduring businesses. At the same time, the industry has evolved, and we recognize that RE/MAX must also evolve with it. This is where Real comes in. Real brings a modern technology platform, a culture of innovation and collaboration, a lean operating model and a day 1 mindset. Our opportunity is to build on the strengths of both companies, combining RE/MAX's brand, reach and entrepreneurial spirit with Real's technology and innovation to help agents and franchise owners build more successful, more profitable businesses.

We've made meaningful progress in just 2 months, but there's a great deal of work ahead. Change is never easy, and we know we won't get everything right, but we are moving with urgency, making difficult decisions and holding ourselves accountable for our results. To our agents, broker owners and employees across both brands, thank you for your commitment and trust. We believe we're building a company that will emerge from this downturn in an even stronger competitive position.

Operator, please open the line for questions.

[Operator Instructions] The first question is from the line of Stephen Sheldon of William Blair.

This is Emma Kozal on for Stephen. Starting on the Real agent recruiting pipeline, you touched on some attrition following the quarter due to the tougher housing environment. So if we could just walk through what you're seeing with the pipeline there and how that's trending into 2027, that would be great.

Emma, this is Tamir. If we look at the numbers of agents who joined us in 2026 versus 2025, we actually see that more agents -- slightly more agents joined in 2026. Obviously, the biggest problem right now in the industry is the churn, primarily the churn of agents just leaving the industry. And as we mentioned on the call, in the past 2 months, we offboarded about 1,000 agents who just left the industry or did not pay their [ MLS dues ]. We have a list of another 300 to 400 agents that we're looking into. But I think that the most important part is the fact that while agents are churning, we are keeping the production.

So those agents that are churning are either nonproducers or agents that really contribute very little to revenue. So in that sense, I think that we're actually improving our EBITDA and actually taking the right steps when we're offboarding the agents. But as to your question, the pipeline is still strong, and we are bringing in at least the same amount of agents as we did last year, slightly more.

Okay. Great. That's helpful. And then following up on the Leo Pro announcement actually coming out of RISE. Can you touch on how traction has been coming out of the conference, both on the Real side and with the RE/MAX franchisees?

Sure. Well, RISE is Real's annual event, and we had Real agents there. RE/MAX's annual event is [ R4 ], and it's taking place in February of 2027. The energy at RISE was amazing. I think that all of the agents, all of the participants just came out of the conference very energized, very assured of their decision of being here. You know that it takes time for agents to make a decision about switching brokerages, but we definitely see a traction momentum, and I believe that it will translate into more agents joining in the next few weeks and months.

But the energy is definitely there and the excitement and also the anticipation of more and more innovation and value that we will be pouring into our agents. So great confidence, great outcome, and we will probably see that in the numbers in the next few months.

The next question is from the line of Naved Khan of B. Riley.

A couple of questions from me. Maybe just on the legacy React side -- Real brokerage side. Maybe just talk about the attach rate for Title mortgage. I think you gave us the revenue, but just talk about what the individual attach rates for those to look like. And then on the combined business, I think you called out $40 million in run rate cost synergies have been actioned. But the benefit to EBITDA seems like it's on a run rate basis, $28 million. Maybe just unpack for us the flow from cost savings into EBITDA line.

Sure. I can take the first part. Naved, thank you for the question. There is no real change in attach rate from previous quarter. So on mortgage, we're talking about less than 1% even though there's a lot of momentum of agents that are joining or expressing their desire to send their contracts or their clients to One Real Mortgage. We have a lot of agents in the pipeline getting licensed as loan officers. So we believe that this will translate into revenue quite soon. But again, a lot of excitement there.

On the title side, we're talking about attach rates around 3% as previously, and we are starting to have a lot of conversations both with existing Real teams, but also on the RE/MAX side, both for One Real Title and One Real Mortgage. So the potential to unlock an even bigger network is definitely there, and it will take a little bit of time to materialize. Jani, you want to talk on the -- you want to address the synergies?

Yes, sure. Thanks for the question, Naved. So you're correct. We've actioned more than $40 million in cost savings in the first 2 months. Of that amount, approximately $4 million relates to CapEx or capitalized software synergies and another $8 million relates to stock-based comp. So those 2 would not flow through to adjusted EBITDA. That's how you get to the $28 million of annual cash savings that do flow through to EBITDA. So that's the bridge.

Understood. And then maybe just a clarification on the attach rates that you gave, Tamir. So I think you expanded the participation in the title JVs in some states over the summer. When should we start to see a tangible benefit of that? And then of the agents that are participating in these JVs, what kind of volume are you able to draw into the JVs versus something that still might be going a different route?

Yes. I think that over time, we will see more and more participation and attach rates going up. In terms of the JVs, as before, we're seeing participation rates or attach rates of, in some cases, 40%, in some cases, higher than 70% within those JVs. As of earlier this week, we have -- we started implementing some things on the remax.com side to try and experiment with sending leads to One Real Mortgage and just to see how that converts, and we're actually seeing encouraging data there, but still too little to actually draw any conclusion from. But yes, it's, kind of, an ongoing effort, and we're doing the right things.

The next question is from the line of Matthew Erdner of JonesTrading.

I'd like to, kind of, touch on the synergies for next year. When should we expect those to flow through? Is it going to be somewhat of an even pace throughout the year? Or are there certain contracts that will, kind of, be canceled, call it, later in the year, earlier in the year? What's the expectation there?

Yes. Thanks for the question, Matt. As we said, we're at $28 million today. So you'll start to see that $7 million quarterly run rate begin in Q1, and then we said over $30 million for the year. So it will tick up sequentially as the year progresses. You're correct. Some of it relates to contracts that will be expiring over the course of the year. So that's how it will inch up over the course of the year.

Got it. That makes sense. And then you mentioned that 3,000 agents were on Leo Pro. I'm curious on the feedback there in terms of their productivity, how they're, kind of, utilizing the tool and just their overall thoughts on the new release.

I can actually jump in and speak to that. And then Tamir, feel free to fill in any additional details. I think the feedback has been overwhelmingly positive. We got to be with a lot of the agents at RISE, announced to them live and so many people kept coming up just saying this is going to be so big to my business, right?

It's really impactful both in the marketing side and then even operationally in a lot of the day-to-day where it's allowing them to free up their time so they can focus on the relationship side of the business, which is at the core of it all. So really great initial feedback that we're seeing from agents overall.

Thanks, Jenna. Matt, we have approximately 5,600 agents using Leo Pro and about 3,500 agents paying for it. So just within a couple of weeks, we have substantial amount of agents paying, and we are going to open or offer Leo Pro to the entire RE/MAX network very soon. So you can see those numbers going up then.

The main usage of Leo Pro right now that we're seeing is creating marketing materials, social media posts and working their CRMs. So just nurturing their leads. And we're seeing great conversion for our agents in terms of scheduling appointments for them, listing agreements and also just nurturing buy-side leads.

The next question is from the line of Nick McAndrew of Zelman & Associates.

Just curious now that you've had a couple of months, kind of, operating as a combined company, just are there areas where you're seeing more opportunity in the combined business than you originally anticipated? Or just any areas where your priorities just have evolved as you've gotten deeper into the integration?

Thanks, Nick. I think that we did a lot of due diligence prior to signing the deal, and we know exactly what the business looked like. Obviously, when -- post closing, you have a full visibility and you're running the business and you know exactly where things are. I think that we're more excited than before. I think that there are more opportunities to evolve the business model on the RE/MAX side. I think that there are ways to reinvigorate growth and just reenergize that brand. So we're excited about that.

Other than that, I'm very happy with the progress that we've made on integration and the cost cutting. We think that, obviously, as we communicated, there are more synergy opportunities than we previously thought, and that will translate into more cost savings and just more EBITDA. But yes, I mean, I think that we're more excited than before.

Yes, that's helpful. And I guess just going off of that, can you talk about maybe just some of the conversations you've been having with RE/MAX owners and agents since the merger closed, maybe specifically about just what parts of the broader platform are generating the most excitement for RE/MAX agents? And maybe how has that feedback shaped your thinking around just like the reZEN rollout as well?

Sure. So a few weeks ago, we announced that Alex Vidal is coming in as the President of RE/MAX. And Alex, just within a few weeks, managed to generate a lot of excitement and energy around the RE/MAX network. He's traveling the country. He's talking to a lot of broker owners, a lot of agents. And I think that there's just a renewed energy around the brand and within the network, and that's great because energy is contagious. And if you want to grow, you need that type of energy and Alex brings exactly that.

The main point that most of the broker owners have been talking to us was around technology and what we can offer them. Obviously, historically, there's been a lot of disappointment with what RE/MAX has been offering their agents and brokers. But the fact that we have mature technology that is serving the Real side on the brokerage side gives them a lot of confidence that this is proven technology that can help them run better businesses and eliminate a lot of their overhead and costs. So they're excited about the technology.

As I mentioned, within a few weeks, we want to roll out Leo Pro for the entire RE/MAX network. And then reZEN, our operating platform for the broker owners will be ready at some point in Q1 2027. So we're working very hard to deliver that. But I think that once that's in place, we will be able to help a lot of the broker owners with some of their struggles around profitability and just managing their roster and freeing up their time to focus on agent attraction and also teaching their agents on just how to sell more even though they're already extremely productive.

There are no further questions at this time. I will now turn the call back to Ravi Jani, CFO, for closing remarks.

Thank you, [ Connor ]. So now that we've completed the analyst Q&A session, we'd like to address a few of the questions submitted through our Say Technologies shareholder portal. We received some great questions this quarter, and so we appreciate everyone who participated. First question for Tamir. What is the biggest challenge post merger? And how are you addressing it?

Yes. Thank you for the question. Before addressing it, I want to acknowledge that we have many Real and RE/MAX brokers and agents with us on the call today. And our brokers and agents are operating in an industry that is facing strong headwinds and they're winning. They provide excellent service to their clients. They grow their market share in every market. They build great businesses even in this tough macro environment, and I'm just proud to be in business with them.

To the question, I think that the biggest challenge is bringing together 2 very different organizations and making sure we move with the speed and urgency that this opportunity requires. Real and RE/MAX have complementary strengths, but they also have different operating models, cultures and ways of doing things. Our job isn't simply to put the 2 companies together. It's to take the best of both, simplify how we operate and build a much stronger value proposition for agents and franchise owners.

We've made significant progress in just 2 months, including actioning more than $40 million in annualized cost savings, but the more important work is ahead. It's modernizing the technology. It's strengthening the franchise model and making it easier for real estate professionals who depend on us to build successful businesses. And we're approaching this with urgency with clear accountability and a willingness to challenge how things have historically been done.

Thanks, Tamir. The next question for you. As a founding member of Open Real Estate, how will this benefit Real and RE/MAX agents and franchisees? And what is the expected impact on listing exposure or data or ancillary revenue opportunities?

Sure. So Open Real Estate is an exciting initiative. We joined Open Real Estate because we believe the industry would benefit from a more open, transparent and competitive approach to how real estate data is distributed. As one of the largest real estate platforms in the world, we think that it's important that Real REMAX Group have a seat at the table in shaping how that ecosystem evolves.

It's still very, very early, and I don't want to get ahead of the initiative or speculate about specific products, economics or revenue opportunities. But strategically, we see the potential to create more -- a more efficient marketplace that ultimately benefits agents, broker owners and consumers. And that's why we're excited to be involved.

Great. Thanks, Tamir. Last question for Jenna. Are you planning to offer all of the tech and ancillary services to other agents and new agents as part of the package for signing up with Real REMAX Group?

Sure. So one of the biggest opportunities in bringing these 2 companies together is expanding the tools and services available to our agents and broker owners. But we're not really thinking about this as a single bundled offering. On the tech side, we're planning to make reZEN and Leo Pro available across the network in the coming months, which will give many more broker owners and agents access to tools that can really help simplify their operations and help them grow their businesses.

On the ancillary side, we're approaching each opportunity a little differently. For example, our Real Originate program is already open to agents from any brokerage who wants to become licensed mortgage loan officers and build additional revenue stream. In Title, we recognize that many of our broker owners have established joint venture partnerships. And so we're exploring ways to complement those existing relationships rather than disrupt them.

And we're already seeing opportunities on the consumer side. Leo is now capturing mortgage leads through remax.com, which is an early example of how we can leverage our digital reach to create additional opportunities across the ecosystem. So rather than creating or committing to one package, our focus is really on bringing these capabilities together thoughtfully with the flexibility for different business models and needs across our network.

Thanks, Jenna. We just received one last question, which I'll take. There are industry estimates for 2027 purchase mortgage growth that are generally around flat. Real's -- Real REMAX Group's estimate for existing home sales is down 5% to 10% and then 3% to 4% on average home sale prices. There's a huge gap between industry estimates and what we are forecasting. Can you provide some sensitivity to your numbers around these industry growth scenarios?

So thank you for the question. And I think we want to be prudent in our outlook and not plan for a recovery. So we have more visibility into our cost actions than into the top line and market environment. We believe that if the market were flat as others are estimating, our adjusted EBITDA would likely be in the $200 million range. But based on the macro assumptions we've put out in our forecast, we are expecting the range of $175 million to $190 million that Tamir and I referenced earlier in the prepared remarks.

So with that, I want to thank everyone for joining us today for your continued interest and support. We're obviously excited about the opportunities ahead, and we're focused on executing against the priorities we've outlined today. With that, we look forward to updating you on our progress next quarter.

[ Connor ], I'll turn it back over to you to conclude the call.

A replay of this call will be available on the Investor Relations section of our website within 24 hours. This concludes today's call. Thank you for attending. You may now disconnect.

Good morning, ladies and gentlemen, and welcome to The Real Brokerage Earnings Call for the Second Quarter ended June 30, 2026.

[Operator Instructions] I will now turn the call over to Alix Lumpkin, Chief Legal Officer at The Real Brokerage.

Ma'am, the floor is yours.

Thanks, and good morning. Thank you for standing by, and welcome to The Real Brokerage conference call and webcast for the second quarter ended June 30, 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 second quarter ended June 30, 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 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, including our management discussion and analysis for the period ended June 30, 2026, our annual information form for the fiscal year ended December 31, 2025, and our management information circular dated July 9, 2026, as well as our SEC reports and the S-4 registration statement filed in connection with the RE/MAX transaction. Real disclaims any intent or obligation to update these forward-looking statements, except as expressly required by law.

With that, I'd like to turn the call over to Chairman and Chief Executive Officer, Tamir Poleg. Tamir, please proceed.

Thank you, Alix, and good morning, everyone. Real is a real estate technology company built to improve how real estate works for the professionals at the center of a transaction and ultimately, for the buyers and sellers they serve. We attract productive real estate professionals with a differentiated value proposition, help them build stronger businesses through superior technology and support and expand the products and services available to them and their clients over time. When we do these things well and operate with financial discipline, we create durable value for agents, consumers and shareholders alike.

I want to frame today's call a little differently than usual as this could be the last time we report to you as a stand-alone Real. Our security holder vote on the RE/MAX transaction is scheduled for August 14. Assuming approval by both Real security holders and RE/MAX's shareholders and satisfaction of the remaining closing conditions, we expect to complete the transaction thereafter in the second half of 2026.

The headline for the quarter is straightforward. Despite one of the most challenging housing markets in years, we again delivered significant growth, improved core profitability and further strengthened our balance sheet. Revenue increased 30% to more than $700 million. Adjusted EBITDA increased 38% to $27.6 million. We ended the quarter with record cash and short-term investments of $86.6 million. Those results reinforce something we've believed for a long time.

When we consistently help great real estate professionals build better businesses, we can deliver differentiated growth, improve profitability and create long-term value. That's why we believe the RE/MAX transaction is such an important step in our evolution. RE/MAX brings an iconic global brand, highly productive agents and franchise owners with deep local market expertise. Real brings a modern AI-enabled technology platform, a differentiated economic model and a track record of innovation and disciplined execution.

Together, we believe we can better support real estate professionals, improve the experience for buyers and sellers and build a stronger, more profitable company for the long term. Jenna will discuss the momentum in our operating results and integration progress. Ravi will then discuss our financials in more detail before I return with a few closing remarks.

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

Thanks, Tamir, and good morning. We ended the second quarter with approximately 35,350 agents, up 26% year-over-year and entered the second half with a strong pipeline. In fact, as of today, our agent count has already exceeded 36,000. Even in a difficult market environment, we continue to experience organic growth from entrepreneurial agents, teams and independent brokerages looking for better technology, better economics and a platform that helps them run their businesses more efficiently and more profitably.

We also continue to make progress rolling out new technology that can meaningfully change how agents operate and how they serve their clients. As an example, HeyLeo, our AI relationship management platform for agents, continues to evolve to enhance both the agent and client experience. This includes several new features that Leo 2.0 has beta-launched in recent weeks, including direct integrations with some of the largest real estate CRMs in the industry. As a result, with the help of Leo, our agents can now seamlessly leverage agentic AI to help activate, engage and nurture their leads.

This matters because most agents already have significant opportunities sitting inside their client database, but simply don't have the time or tools to consistently follow up with their clients. By helping agents respond faster, maintain more consistent engagement and identify when their clients are ready to act, we believe HeyLeo can improve agent productivity while creating a better experience for buyers and sellers. We're very pleased with the early results and feedback from our agents and look forward to making this technology available to all of our agents once fully rolled out.

Turning to RE/MAX, as Chief Integration Officer for the transaction, my primary focus is straightforward: be ready to execute on day 1 while preserving the strengths that have made both organizations successful. Since our last call, we have established an integration management office, identified leaders across every major division and work stream and have engaged experienced third-party advisers to assist us with our integration plans and support day 1 readiness.

Based on the work completed to-date, we remain confident in our ability to achieve approximately $30 million of cost synergies within 3 years of closing. As we gain better visibility after closing, we'll continue evaluating additional opportunities, and we'll communicate our progress transparently. Throughout the process, our priority is to bring together the best of both organizations while making the transition as seamless as possible for employees, agents, franchise owners and consumers.

Success won't be measured by how quickly we change things. It will be measured by how effectively we strengthen the combined platform while preserving the relationships and culture that have made both successful.

With that, I'll turn it to Ravi.

Thank you, Jenna, and good morning, everyone. Let me provide a little more context around the financial results. Consolidated revenue for the second quarter was $700.6 million, up 30% year-over-year. Growth was driven by a 27% increase in closed transactions to a record 62,380, substantially outpacing both the U.S. and Canadian home sales markets, together with a 1% improvement in average agent productivity and a 2% increase in average revenue per transaction.

Ancillary revenue from Real Wallet, One Real Title and One Real Mortgage grew a combined 28% year-over-year to $4.2 million with wallet revenue growing 140%, title growing 29% and mortgage growing 10%. The key takeaway is that Real continues to take market share and grow at a significant rate despite a housing market that remains near historically low transaction levels. At the same time, our high-margin ancillary businesses are also delivering improved growth and profitability.

Gross profit was $58.3 million, up 22% year-over-year, while gross margin was 8.3% compared to 8.9% in the prior year. The year-over-year decline was primarily a mix effect. In the second quarter, approximately 42% of our closed transaction sides came from capped agents, up 300 basis points year-over-year.

Post cap transactions carry a lower brokerage margin by design. That is the economic trade-off for retaining our highest producing agents and our strong retention rates give us confidence that it remains the right trade-off.

Total operating expenses were $65.3 million in the second quarter, including $11.6 million in acquisition-related costs associated with the pending RE/MAX transaction. This resulted in a reported operating loss of $7 million in the second quarter compared with operating income of $1.7 million in the second quarter of 2025. On a normalized basis, excluding acquisition-related costs, operating income would have more than doubled from the prior year.

Net loss was $8 million, and on a non-GAAP basis, adjusted EBITDA was $27.6 million, up 38% year-over-year. Adjusted EBITDA margin expanded to 3.9% from 3.7% in the prior year. We ended the quarter with a record $86.6 million in unrestricted cash and short-term investments, up from $49.9 million at the start of the year. Subject to the satisfaction of remaining closing conditions for the RE/MAX transaction, we expect to prioritize debt repayment and deleveraging following closing.

With respect to the stand-alone Real business, we expect the third quarter to follow normal seasonal patterns across the residential real estate industry with revenue and adjusted EBITDA declining sequentially from the second quarter and gross margin lower year-over-year. Assuming the RE/MAX transaction closes as expected, we intend to use our third quarter call in November to provide a combined company baseline and preliminary 2027 guidance for the combined business. More details on our results and key operating metrics can be found in the earnings press release, financial statements and investor presentation that accompany this call.

I will now turn it back to Tamir.

Thank you, Ravi, and thank you, Jenna. 12 years ago, we started Real with a simple goal; make life better for real estate agents. That mission has never wavered. While we can't control mortgage rates or the pace of the housing market, we can control how we innovate, how we execute and how we support the thousands of real estate professionals who trust us with their businesses.

This quarter's results reflect that focus. To our agents and employees, thank you for believing in what we're building every day. And to the RE/MAX agents, franchise owners and employees listening today, thank you for the trust you've earned over more than 50 years. Together, we have the opportunity to write the industry's next great chapter by bringing together the best of both organizations for our agents, our consumers and our shareholders.

With that, we can open the line for questions.

[Operator Instructions] Your first question is coming from Stephen Sheldon from William Blair.

First, just -- would be great to hear what you're seeing and hearing kind of in the agent and team recruiting pipeline. You continue to go quickly there, which is great. I guess has there been any signs that the pending merger with RE/MAX is impacting that pipeline either positively or negatively? I would just love to hear what you're seeing there.

Thanks, Stephen. Yes, after somewhat a slower start for the year in Q1, Q2 was more robust in terms of agent adds, and we're seeing a stronger pipeline at the moment. I think that the announcement of the RE/MAX deal definitely gave us some tailwinds in terms of agents reaching out or teams reaching out and contemplating joining Real. So I think that all in all, it is a positive.

So we are seeing momentum. As Jenna mentioned, we are over 36,000 agents at the moment. So Q3 started very strongly, and we expect that momentum to continue through the rest of the year. Our focus at the moment is obviously attracting agents from -- that are not with The Real RE/MAX group. So we're trying to attract agents from other brokerages and making sure that we protect the network on the RE/MAX side and making sure that we protect the broker owners businesses as well.

So we are focused on attracting agents from the outside and at the same time, also working on integration, but the pipeline is strong, and we are -- we have a few very large opportunities as well in the pipeline. Hopefully, they will materialize before the end of the year.

Got it. That's helpful. And then as a follow-up on ancillary solutions, title and mortgage continuing to grow quickly, but still remain pretty small, I think, in the grand scheme of things. So I think some investors are wondering when we might see more of a step function change within those high-margin revenue streams. And now with the RE/MAX merger, maybe things might change a little bit. But just as we think about the existing business, any signs that things might pick up as we enter into 2027?

Sure. So on the mortgage side, we see a lot of momentum. [ Kate ] is doing the right things and we're seeing some of our best agents opting into the Real Originate program. I think that revenue will probably kind of show that momentum later this year or at the beginning of 2027. So I think that, on the mortgage side, you should expect some better results moving forward.

On the title side, title did grow 30% year-over-year. We are seeing some great attach rates with some of the JVs. I think that we can do a better job at just propelling revenue over there as well. But we're mindful of that. And again, those 2 companies continue to grow.

I think that Leo 2.0, which we just launched for beta, which I'll just maybe spend a minute on. Leo 2.0 is a version of Leo that enables our agents to connect their CRMs into Leo and allow Leo to nurture their leads. We are now integrating the mortgage and title flows into Leo so that Leo can actually offer One Real Mortgage and One Real Title solutions to our agents' clients, and we're seeing some great results before even integrating mortgage and title flows into Leo.

Leo is able to nurture leads and just create opportunities for agents. So the feedback has been amazing, and we expect that to also push the ancillary services revenue moving forward. It's not a short-term effort. It's going to take a while, but we're confident that we're on the right track.

Your next question is coming from Naved Khan from B. Riley.

Maybe just one on the -- on Leo. How many [ INSs ] are you connected to now? Are you able to have nationwide coverage with Leo? Or is that still something you are broadening out?

We're still broadening it out. I think that we are now covering close to 90% of the transactions in the U.S. and all of Canada. So it's almost fully built out in terms of MLS coverage.

Got it. And then maybe just on the attach rate for mortgage and title. Between the 2, which one do you think you're seeing greater momentum than you had expected? And thoughts kind of where should growth rates be maybe exiting the year or early next year in these 2?

So maybe I'll provide some information on the attach rates on the title side. Overall, on the JV attach rates, we're looking at 45% attach rates on the JV side. On a company-wide attach rate, we're looking at -- for eligible deals, we're looking at 3.24%. So kind of no change from last quarter.

Our highest rate -- attach rate JVs, we're looking at Texas at 67% and some others north of 80% or between 67% and 80%. So within the JVs, we're looking at very high attach rates, and it's just a matter of getting more high-producing agents to partner with those JVs.

On the mortgage side, and back to your question, I think that in terms of momentum, we're feeling more momentum on the mortgage side, even though it's still not manifested in the revenue, I think that it will start manifesting in the next couple of quarters. But both companies are on the right track. I think that we can do a better job on the title side.

Your next question is coming from Matthew Erdner from JonesTrading.

This is Valen Alvar here filling in for Matthew Erdner. I just had a quick question here. So as you mentioned, gross margin was 8.3% versus the 8.9% last year. How should we think about the year-over-year trend in the back half of that?

Yes, thanks for the question. I mentioned we are seeing an increasing shift in our transaction mix towards post-cap agents. And so, I mentioned as it relates to Q3, we do expect gross margin to be lower year-over-year, albeit I wouldn't expect the same order of magnitude of a decline as we saw in Q2. Part of that is because we announced a couple of fee model changes that go into effect in September, and you'll see that carry through into the fourth quarter of the year as well.

And so that, combined with -- which should be a pickup in some of the ancillary businesses should result in less of a year-over-year moderation in gross profit margin relative to what you saw this quarter. And I'll just clarify, as we look at Q4, we would expect it to be relatively flat year-over-year.

[Operator Instructions] Your next question is coming from Nick McAndrew from Zelman.

Maybe just one on the headcount side of things to start. I know that the headcount efficiency ratio moved modestly lower this quarter, but operating expenses per transaction continue to improve. So just any insight into where you are currently adding headcount? And I guess, assuming the RE/MAX transaction does close, does that change the strategy around future headcount at all? Or is there an opportunity to kind of improve that again over time as [ reasons ] leveraged across the broader network?

Sure, Nick. I'll take the first part, and then I'll let Tamir or Jenna chime in on the go-forward headcount outlook. But this quarter, what drove the employee count higher and therefore, the efficiency ratio moderately lower is something we talked about on the last call, which is that we have a number of contract roles that we've converted to full-time employees. And those are mainly in the brokerage and compliance space. Those were roles that we previously relied on third-party contractors, and we've converted a number of them to FTEs.

And so that's why, as we mentioned last quarter, it is P&L neutral, and so you didn't really see an impact on our operating costs or operating leverage. But yes, from that specific ratio, just converting a contractor to an FTE does have an impact. I would note that we don't expect that to continue at a similar rate into the second half. And if you look at last year, the Q2 was sort of the low watermark for headcount efficiency ratio. And then we did most of our hiring in the first half and then you saw the headcount efficiency ratio improve in the second half of the year.

To your second question, yes, the ratio will be a little bit fluid post-acquisition. And so we'll do our best and endeavor to provide you with that level of visibility. But given certain employees will be spanning both organizations, we'll try and give you the best ratio so you can compare on an apples-to-apples basis.

But Tamir, anything you wanted to add on just sort of go-forward resourcing?

Sure. So we plan to bring that type of efficiency that we have implemented on the Real side into RE/MAX as well. So we will continue to update after we close the transaction when it comes to headcount efficiencies and overall cost savings. But we have a solid plan in place. We've been working very closely with RE/MAX management and their team to identify areas of opportunities. And I think that you will be happy with the results that we will post in the coming quarters.

And just one on HeyLeo. I think last quarter, you just discussed the early HeyLeo beta and just that ability to hopefully help agents reengage leads. And any update on just the rollout to the broader agent base and any feedback you've gotten so far and just how agents and maybe consumers are using the products, if at all?

Sure. So we actually rolled out the Leo 2.0 beta version about 2 weeks ago. We have over 200 of our most successful agents and teams that already connected their CRMs to Leo 2.0. And the feedback was immediate and overwhelmingly positive. So Leo was able to create opportunities for them with dormant leads that were lying in their CRMs for years and we're actually out in the market without the agents knowing that.

And Leo was able to just engage in conversations with them and show them listings and create appointments for the agents just to go and look at homes with the client. So the feedback was very positive. And just the bottom line of it is that Leo is generating revenue for the agents. And this is a great starting point for us if we want to monetize Leo in multiple ways. So we'll continue to update, but the immediate or short-term feedback was better than we expected, to be honest.

Your next question is coming from Naved Khan from B. Riley.

Just had some follow-ups. Maybe -- so just on the -- between U.S. and Canadian markets, I think last quarter, you called out some weakness in the Canadian market. I just wanted to see how that trended in the second quarter? And then I have a follow-up.

Sure. Yes. Thanks, Naved. You're right. The Canadian market does -- has been weaker than the U.S. So in the U.S., our average per agent productivity, transactions per average agent was up around 3%, which is consistent with the market, against quite a tough comp I'd add.

But in Canada, our average transactions per agent was actually down 9%, and that's a combination of a challenging market in the provinces where we operate as well as a couple of specific tough comps where a couple of top agents had record first half of last year, like hundreds of transactions. And this year, the numbers are 30 to 50. So there's a little bit of a comp issue given the Canadian agent base is a fraction of the U.S. base. So this probably exacerbates the percentages, but we are continuing to see declines in Canada on a per agent basis.

Now on an aggregate Canada basis, our revenue did grow and our agent count does continue to grow as we've opened up new provinces. But on a per agent basis, the broader market environment is continuing to be a headwind.

Great. And then maybe just to clarify something you said in answering another question. What were the contract -- what type of were these contract roles have you converted into employees?

It was primarily state brokers and compliance specialists. So these were roles that we've previously worked with third-party contractor firms that we've now brought on full-time employees. And Jenna, do you want to discuss the rationale and how it better serves our agents and get the local market expertise, maybe you could give Naved some more context.

Sure, absolutely. I would say there's really twofold here. One is, as we've grown, right, there's been more work and more demand for those resources. So having those in-house increases the commitment level of those individuals and allows for better connection between the agent population in those roles. And so what we have found is that there's better delivery from a work standpoint and then also just better interactions from our agent population with those folks. And so a number of reasons why we wanted to do that overall. But at the end of the day, it's to better serve the agents that we have.

Yes. And Naved, I might just add because you did ask about mortgage and title previously. Part of the bonus compensation structure for those full-time employee brokers is attached to driving attach rates in the states where they serve. So there is alignment, not just in the brokerage but also across title and mortgage. And so that's one of the other benefits of bringing those roles in-house.

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

Thanks, Matthew. So now that we've completed the analyst Q&A portion, we'd like to address a few questions that were submitted through our Say Technologies shareholder portal. We've received some great questions this quarter, and so we appreciate everybody who participated.

First question for Tamir. As a RE/MAX franchise owner, how will combining 2 companies with different business models create value for existing franchisees? What specific benefits, opportunities or competitive advantages should franchise owners expect as the integration moves forward?

That's a great question. We recognize that franchise owners are the backbone of the RE/MAX network, and our objective is to make their businesses stronger, not to change what has made them successful. RE/MAX franchise owners have spent decades building successful local businesses and around one of the most recognized brands in the real estate space. We believe that the combination gives us the opportunity to strengthen that value proposition by giving franchise owners access to a modern technology platform, AI capabilities and a broader suite of services that can help them attract and retain productive agents while improving agent productivity.

Just as importantly, we believe our technology platform can simplify the brokerage technology stack. Today, many brokerages and franchise owners rely on multiple third-party vendors for CRMs, AI tools, communication platforms, and other agent productivity software. And we believe that we then can replace many of those point solutions, reducing both complexity and cost for franchise owners while delivering a more integrated experience for agents.

Beyond technology, we also see opportunities to expand the ways franchise owners participate in the economics of their businesses over time through ancillary services such as mortgage and title as well as Real's revenue share model if they choose to, which has been a powerful driver of agent traction, by the way, and engagement on the Real side.

But throughout the process, we're approaching integration with a great deal of respect. For the RE/MAX franchise model, our focus is on preserving the strengths that have made the network successful while bringing together the best capabilities for -- from both organizations. And we believe that that's how we create long-term value for all the stakeholders.

Lastly, I will say that I will be on the RE/MAX Broker Owner Conference in Nashville in 10 days, and I'm looking forward to meeting you and sharing more information on our plans moving forward.

Great. Thanks, Tamir. Next question for Jenna. What's one decision leadership has made over the past year that shareholders probably didn't notice, but you believe will have one of the biggest long-term impacts on Real?

Sure. So I would point to a decision that probably isn't obvious from the outside, which is that we decided to invest just as aggressively in using AI to transform our own operations as we did in building AI for the agents. So most people have heard of Leo, see Leo, but behind the scenes, we've also built an in-house AI automation team, and they're really focused on rethinking how work gets done across every department at Real.

Over the past year, that team has automated hundreds of workflows that we've estimated saved thousands of hours of manual work. And that's really one of the reasons we've been able to maintain one of the leanest operating cost structures in the industry while continuing to scale at a very high rate. It allows our people to spend less time on repetitive administrative work and more time on activities that create value for our agents.

What's exciting is that it -- I think we're still in the very early innings. AI just isn't another product for us, right? It's becoming how we build software, how we serve our agents and how we run our company. And so over time, we believe that will continue to improve the customer experience, strengthen our operating leverage and widening our competitive advantage.

Thanks, Jenna. I'll take the next question. How much expected profit will this merger bring and positive free cash flow?

So as we noted back in April, on a pro forma basis, the 2 companies generated approximately $160 million of combined adjusted EBITDA in 2025. If you layer on the $30 million of run rate synergies that we publicly committed to, that number moves to roughly $190 million. And we see that as a floor, not a ceiling. And so there's a clear path to growing it further through revenue synergies, additional cost synergies and obviously, through organic growth in the businesses.

And so that strong foundation plus the numerous levers for adjusted EBITDA growth is what underpins our confidence in the deal's ability to drive higher profitability and durable free cash flow in the future.

So last question for Tamir. How directly tied to the real estate market is the company's -- is the outlook for the company's goals? And is there a plan and path to grow and increase profit? Or is any major takeoff going to be reliant on a real estate boom?

Thanks for the question. The housing market certainly affects transaction volumes, but one of the things we're most proud of is that we've shown consistent growth through both good years and challenging years. And to put that in context, in a typical year, the U.S. sees about 5.2 million existing home sales. We've been running nearly 20% below that, around 4 million for the past 3 years.

Despite of that backdrop, we've grown organically primarily by taking market share, attracting productive agents somewhere between $5,000 and $10,000 per year for the past 3 years, while increasing ancillary adoption and expanding margins as we scale. Those are things that we can control regardless of the macro environment. A healthier housing market would certainly benefit the entire industry, including Real and our agents, but our strategy is not dependent on waiting for the market to improve. Our focus is on continuing to execute and expanding our share of the market that's available today regardless of market conditions.

Great. Thank you, Tamir. With that, we can close the call. If you'd be willing to provide the replay instructions, we can then close.

Absolutely. In order to access the replay, you need to call (877) 481-4010 with a confirmation code of 54149. The replay will be available 2 hours after this call concludes. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.

Good morning, ladies and gentlemen, and welcome to the Real Brokerage First Quarter Ended March 31, 2026, Earnings Call. [Operator Instructions] I will now turn the call over to Alexandra Lumpkin at The Real Brokerage. Ma'am, the floor is yours.

Thanks, and good morning. Thank you for standing by, and 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.

With that, I'd like to turn the call over to Chairman and Chief Executive Officer, Tamir Poleg. Tamir, please proceed.

Thank you, Alex, and 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, and then I'll come back to close. I'll start with a quick overview of our results. Real delivered another impressive first quarter, and 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%, and our unrestricted cash and investments balance increased by $30 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 6, 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, but 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 cost. 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, and 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, so let me tell you why we announced this transaction and why now.

At its core, Real RE/MAX 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 sites 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, 2 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. And 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. And 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 85:1 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, but from a practical standpoint, bringing these roles in-house means our agents get better service, better support and more hands-on local expertise.

And 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 plus 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 AiRM genuinely useful. We currently have 450 agents in the beta test with another 4,500 on the waitlist. This phased rollout is deliberate as we want agents and their clients to have a great experience before we open the flood gates. 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-plus 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.

And 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, and 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 size 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 negative 0.7% for the quarter from negative 1.5% in the prior year 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 continue 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 caps, 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 as non-recurring items. But 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. And 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 1. 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. And 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.

And 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.

[Operator Instructions] Your first question is coming from Naved Khan from B. Riley Securities.

Congrats on the results. Just a couple of questions from me, please, and both are related to ancillary. So first question is, what kind of attach rates are you seeing from agents who are part of the JVs? How is that trending? And then secondarily, just in terms of participation of the agents on the JVs title, where does that stand? And what are the steps you're taking to take that higher?

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%. So the trajectory is obviously encouraging. And 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 into the JVs? Or was it?

Yes, that was the essence of the question, like what are you doing on your end to increase more agents per and become part of the JV so that there's more volume flowing through it?

Sure. So we want to make sure that the JVs are valuable and that we're driving meaningful transactions to them. So we are opening them up to the most productive team from the most productive agents, and then we're trying to add more and more. But 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. So it's still an effort to add more, but it starts with the top producers in every market.

Okay. And then did you say in your prepared remarks that the number of title JVs is going to 20?

No, we said that Title is operating in 19 states, and we will be opening in Colorado soon. So that will be 20, and we have 13 JVs at the moment. 13 out of the 19 carry JVs.

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. go ahead.

The state based JVs do have span across more than one state. So it's not to...

Your next question is coming from Stephen Sheldon from William Blair.

First, I just wanted to see -- 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? Has there been much pushback? And then I guess, how much interest have they shown -- again, I know it's earlier, how much interest have they shown in potentially adopting reZEN and your broader technology platform since 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. So RE/MAX management has been working very closely with the RE/MAX network and the franchisees. And the initial feedback, I think, was a little bit of a mixed excitement and surprise. I think that naturally, people don't really like change. So at the beginning, there was a need to heavily communicate and provide them the background and how management looks at the combination of the 2 companies. I think that very quickly, it shifted to a lot of excitement on the RE/MAX network side. And 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. So 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 time line -- the companies and the time line and what will be available to the RE/MAX network and when. But I think that there is a lot of support to the combination and the merger of the 2 companies.

Yes, it's really good to hear. Maybe then with -- for 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? I heard the comment you expect it as normal to trend lower sequentially. But how should we be thinking about year-over-year trends? And gross margins were down a little bit in 1Q relative to last year. 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?

Yes. Thanks, Stephen. I appreciate the question. I think in Q2, you would expect to see 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. And 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. And while it could modestly pick up this year, I don't think it would be as impactful as you saw in the second half of last year. So we would expect that year-over-year trend to dissipate in the second half of this year.

And then if housing activity picks up and you start to see productivity 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?

Yes, absolutely. And 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 pre-cap. And so 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. And so 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. And you saw this year, ancillary growth modestly actually outpaced the brokerage. And so ancillaries were a 10 basis point gross-margin tailwind in the quarter. So those are the 2 things that if you do see a market pickup 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.

Your next question is coming from Jason Weaver from JonesTrading.

I believe that you held an internal town hall on the date of the announcement of 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. So yes, one of the first things we did on that morning was to speak to our agent community and invite everybody to our 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. And obviously, agents wanted to understand a little bit better 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 that nothing changes for now.

It's business as usual, obviously, but we also indicated that this combination will allow us to invest even more in growth in technology and more in just strengthening the value proposition, both on the Real side or on the Real model and on the RE/MAX model. So the initial feedback was very supportive from Real's agent community.

Good to hear. And then 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, do you want to take that?

Yes, sure. And I'll let Tamir talk on some of the top-line synergies, which he addressed in his prepared remarks. But 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 based on what you can see before you own the combined company and you can look under the hood. And kudos to Compass, they've done a great job of executing on their synergies in a very short-period of time. And I think you've seen in transactions in this sector and other sectors that once 2 players combine, there's always more opportunity than you think going in.

And so, we underwrote the transaction with $30 million of synergies. If -- once we own the businesses and we get the best athletes together and figure out how the go-forward business looks, for the next decade, could that synergy number change? Yes, of course. And I think we'll be vigilant and thoughtful in how we execute on that path. But needless to say that Real is a very efficient organization, and we will continue to be very efficient as Real RE/MAX Group.

As I mentioned on my prepared remarks, we think that there's tremendous opportunity in just expanding Title, Mortgage and 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 visit the website looked at properties and wanted to receive more information. We want to put Leo to work on those websites. So Leo can actually nurture the leads and then hand them over to an agent who is ready to transact and take the buyer through the process.

So we think that there is a potential to monetize significantly over there. And 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 brokerage.

Your next question is coming from Nick McAndrew from Zelman & Associates.

Maybe I just want 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? And I guess just how different is the productivity profile of a legacy RE/MAX agent versus a more mature Real agent today?

Ravi? Would you want me to take it?

Sure. If you want to address the productivity point. And Nick, the question was on the RE/MAX fee model and cyclicality. I think -- I can take that and Tamir can address the second part. But for sure, I think the franchise model, and you've seen RE/MAX's results have been incredibly resilient throughout what's been a 4-year downturn at this point. They've done an incredible job of protecting the bottom line, which reflects that franchise model, which is just stable and largely recurring with long-term contracts with franchisees.

And so we think it's a really attractive model. It does reduce cyclicality. It does generate high margins in an asset-light nature. And so look, there are a million reasons we're excited about the RE/MAX transaction in the RE/MAX business and the less cyclicality in the margins and revenue stream is one of the many.

Yes. On the productivity profile, RE/MAX agents in 2025 closed around 10.3 transactions per agent on average. Real Title was around 6. And I believe we were #3 in the industry. So obviously, the RE/MAX agent productivity is way up there and by far, the best in the industry. And 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. So 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. That's really helpful. And then maybe just one on the cost side, just thinking about the headcount efficiency. I think moving to 85:1 from 94:1 last quarter. And I guess just when you think about transitioning RE/MAX franchisees and agents on to 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 bringing on another 75,000 in North America, it's not going to require 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. But I don't think it's going to 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, on the headcount efficiency ratio, I did want to just point out that it is going to be largely P&L neutral. It was a conversion of certain contractor roles to full-time employees, which Jenna mentioned in her script, is really to drive better service, better local market expertise. And also the brokers that we brought on as full-time employees, a portion of their compensation is going to be tied to driving ancillary attachment in their market. So I think it's a win-win for our brokers, for our agents and for the company.

[Operator Instructions] Your next question is coming from Michael Rindos from Benchmark StoneX.

Can you talk a little bit about what the firm is doing to stimulate agent growth in markets with higher median sales prices?

Sure. Michael, as we communicated, we added Jason Cassity as our Chief Growth Officer about 2 months ago. So 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. And 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. So we're venturing slowly, slowly into higher-price-points in every market. So 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, and 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. And I think that, that move establishes us as obviously one of the top brokerages, but it gives a lot of comfort to agents that are on higher-end markets.

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. So now that we've completed the analyst Q&A, I'd like to address some of the questions that were submitted through the Say Technology shareholder 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?

Thanks for the question. We believe that it starts with improving the value proposition for agents and franchisees. And 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. And we believe that comes from the combination of our technology platform, our flexible model and highly collaborative agent community. So 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.

But 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. And 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 time line to pay it down? So 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. And so 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. And as we delever, we'll see both a stronger balance sheet and stronger earnings as we reduce the associated interest expense.

And so we think the debt balance is quite manageable. Even pro forma post-close, the leverage of the business will be lower than RE/MAX stand-alone. And so that's on a net leverage ratio basis. And so we'll continue to have the ability to invest in our Agents, in our Franchisees, in the tech platform, and ancillary businesses. So full speed ahead on that while having significant cash to de-lever.

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. So first, Real and RE/MAX are going to continue operating as distinct brands with their distinct models and value propositions. There's not going to 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. And these tools are the same tools powering Real's operations. So franchisees stand to benefit from the same operational efficiency that we've built into our own business.

Thanks, Jenna. And last question for Tamir. What is the projected time line to complete the acquisition of RE/MAX? And what are your 3 largest hurdles pertaining to the deal during this period of time?

Great question. On time line, 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. So based on typical time lines 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 3 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.

And if we do that well, we hope that retention piece will just take care of itself. Second, operational stability on day 1. 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.

And then I would say, third, just being laser-focused on delivering the synergies. We were targeting $30 million in run-rate savings grounded in zero duplicative overhead and corporate costs, but synergies don't realize themselves. We need to work for that. They require thoughtful decisions. They require disciplined execution and organizational alignment. We have a clear road map, and we are holding ourselves accountable to it. So those are the 3, 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. And 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 morning, and welcome to the Real Brokerage Inc. conference call to discuss the proposed acquisition of RE/MAX Holdings. [Operator Instructions] would now like to turn the call over to Ms. Alix Lumpkin, Chief Legal Officer at Real. Please go ahead.

Thank you, and good morning, everyone. We appreciate you joining us on short notice. With me on the call today is Tamir Poleg, Chairman and Chief Executive Officer of Real; and Ravi Jani, our Chief Financial Officer.

Following our prepared remarks, we'll open the line for questions. Please note that this call may contain forward-looking statements within the meaning of applicable securities laws. These statements reflect our current expectations but involve known and unknown risks and uncertainties. Actual results could differ materially from those anticipated.

I'd encourage everyone to review the full disclaimer in our press release, investor presentation and the risk factors in our public filings. Please note that this call is not an offer to sell or a solicitation of an offer to buy any securities or a solicitation of any vote or approval.

We urge investors and security holders to read the management information circular and the registration statement on Form S-4, including the proxy statement prospectus that will be contained therein and all other relevant documents filed with the SEC on EDGAR and with the Canadian securities regulators on SEDAR+ or sent to shareholders as they become available because they will contain important information about the proposed transaction.

In addition, Real, RE/MAX and their respective directors and executive officers may be deemed to be participants in any solicitation of proxies in connection with this transaction. Information regarding their interest of these participants can be found in Real and RE/MAX's most recent management information circular or proxy statement filed with the SEC on EDGAR and with the Canadian securities regulators on SEDAR+.

In addition, there's an accompanying slide presentation for today's call, which along with our press release and filings with the SEC and on SEDAR+ may be obtained from our website at onereal.com. With that, I'll turn it over to Tamir.

Thank you, Alix, and good morning, everyone. This morning, we announced that Real has entered into a definitive agreement to acquire RE/MAX. This is a transformational combination, one that unites the most iconic brand and largest franchise network in real estate with the most innovative technology and fastest-growing major public real estate brokerage.

Together, the Real RE/MAX Group will be a leading technology-enabled global real estate platform. This is a moment Real has been working towards since our inception. Real was built on a simple conviction, that technology can fundamentally change the economics of real estate for agents, for franchisees and for consumers.

RE/MAX was built on a different but equally powerful conviction that a trusted brand and an entrepreneurial franchise model can deliver superior results for agents and clients around the world. 50 years of RE/MAX history validates that model.

And we believe that the combination of these 2 platforms creates something meaningfully differentiated against anything else in the market with significant upside potential. On a pro forma 2025 basis, the Real RE/MAX Group would be the fastest-growing publicly traded brokerage in the industry with approximately $2.3 billion in revenue and $157 million in adjusted EBITDA. The combined company's powerful technology, scale and iconic brand power will drive more value to agents, franchisees, consumers and shareholders than either company could do alone.

Turning to Slide 5. Let me walk through the transaction terms on this slide. We are acquiring RE/MAX for an enterprise value of $880 million. For Real, the transaction multiple reflects approximately 9.4x RE/MAX 2025 adjusted EBITDA before cost synergies and 7.1x after taking into account an expected $30 million of annual run rate cost synergies. Importantly, this transaction is happening in a market environment that remains near a historical trough for existing home sales, meaning RE/MAX earnings today do not reflect a normalized housing environment.

This gives us conviction that this is a compelling entry point with significant earnings upside potential as the market recovers. The transaction structure provides RE/MAX shareholders with the benefit and optionality of both value upside and value certainty.

RE/MAX shareholders can elect to receive 5.15 shares of Real RE/MAX Group for each RE/MAX share they own. Alternatively, RE/MAX shareholders may elect to receive $13.80 per share in cash, subject to proration such that the aggregate cash proceeds for RE/MAX shareholders will be no less than $60 million and no greater than $80 million.

Existing Real shareholders will receive 1 share of the new Real RE/MAX Group for each Real share owned. The transaction is expected to close in the second half of 2026, subject to regulatory and shareholder approvals from both companies as well as the approval of the British Columbia Court, Real's current home jurisdiction.

The enthusiasm we and RE/MAX have for the transaction is clear with some of the largest shareholders of both companies having already agreed to vote for it. RE/MAX founders, Dave and Gail Liniger have inspired and grown an extraordinary company, and their excitement about the combination gives us even greater confidence in the upside we can create together.

On this point, I want to say one thing clearly. The RE/MAX brand is not changing. RE/MAX is an iconic globally recognized franchise, and it is an important part of this combined company. We will operate RE/MAX and Real as distinct businesses under one platform. That is the operating philosophy we are committed to.

Moving to Slide 6. Slide 6 lists the 5 strategic pillars that underpin the combination. Let me dive into more details on each. Slide 7. First, and most fundamentally, this is a combination of 2 highly complementary businesses. Real brings the growth velocity of a modern AI-enabled asset-light brokerage as well as proprietary technology, a vibrant agent community and a scalable operating model.

RE/MAX brings a global franchise network, significant brand equity and the recurring revenue and compelling margin profile of a capital-light franchisor. These models do not compete. They complement. Real RE/MAX Group will be the only major real estate company offering both cloud-based brokerage and global franchise office network, and it will benefit from 2 of the industry's strongest agent cultures on one platform.

Agents who thrive in the in-office franchise environment can continue to do so under the RE/MAX brand and agents who prefer the flexibility and economics of a cloud-based model can continue to do so under Real.

Let me share more. Turning to Slide 8. The combination will create a compelling and differentiated value proposition for every stakeholder in the ecosystem. For agents, this is about choice and better tools. RE/MAX agents will keep their brand, their franchise model and their existing economics.

Real agents will keep their model, too.

What changes is that both agent groups will now have the support of a significant larger platform. Both will have access to advanced technology, expanded product offering and ancillary income streams, including mortgage, title and fintech services.

We are not asking agents to change what works for them. We are adding to it. And we believe that -- that makes agents value proposition more. For franchisees, we will provide access to our proprietary technology platform, reZEN, to serve as the system of record to manage their back-office brokerage operations.

This includes streamlining transaction management processes, reducing manual labor-intensive tasks and ultimately lowering the cost to operate. We will also provide access to our ancillary services, including mortgage and title to unlock new revenue streams and supplement their existing operations. Two distinct models, one platform, each made stronger by the other. Put simply, the combined platform gives agents and franchisees more reasons to join and more reasons to stay.

On Slide 9, I want to spend a moment discussing our proprietary technology platform, reZEN, and why we think agents and franchisees across the RE/MAX network should be excited about the opportunity to leverage this technology in their business. Today, reZEN is used by 100% of Real agents, over 33,000 agents in 50 states and 5 Canadian provinces, providing a foundation for potential future international expansion and long-term value creation.

By automating workflows, leveraging AI and replacing many capabilities that today are often sourced across several third-party platforms, reZEN offers the ability to significantly reduce franchise operating costs while simultaneously improving and standardizing transaction and team management workflows.

To give some perspective on what this means in application, Real operates the most efficient brokerage in the public markets with 94 agents per full-time brokerage employee. The next closest public competitor manages 45 and the industry's largest public player is at 12. That is a game-changing difference. It's directly derived from the power of the platform we've built over the past decade. We've proven it can operate at scale, and we're eager to grow and reach and grow that reach meaningfully.

On to Slide 10. For consumers, this combination makes one of life's most complex transactions even simpler. We will continue to roll out HeyLeo, our AI-powered home search portal and AI relationship management platform to franchisees across the RE/MAX network over time.

This will empower home sellers and homebuyers, giving them a smarter, more responsive experience from the very first search. Additionally, through One Real Title, One Real Mortgage, Motto Mortgage and wemlo, we will bring more integrated ancillary services under one roof. That matters because it gives agents and their clients more control over each transaction with fewer hands-off, faster closings and a better experience end-to-end.

On Slide 11, you can see from a financial standpoint, Real RE/MAX Group will possess one diversified and durable financial model with increased exposure to high-margin franchise revenue and the opportunity to grow in higher-margin ancillary services.

Today, Real's revenue is predominantly generated from transaction-based commissions. RE/MAX by contrast, generates nearly 2/3 of its revenue from recurring franchise fees and annual dues at high margins. The combination lifts our blended EBITDA margins from approximately 3% today to approximately 7% pro forma, and that's before synergies. That is a meaningful structural improvement.

With that, let me hand it to Ravi to discuss the financials in greater details.

Thanks, Tamir, and good morning, everyone. Moving to Slide 12. We expect the transaction to be accretive to Real's earnings and adjusted EBITDA margin within the first full fiscal year following close, excluding merger and integration-related expenses.

With respect to our balance sheet, we've received a $550 million financing commitment arranged by Morgan Stanley and Apollo Global Funding. We would expect to term this out in the debt or capital markets prior to closing with the proceeds to be used to refinance RE/MAX's existing term loan and to fund the cash portion of the transaction and related costs.

On capital allocation, our first priority post close will be deleveraging. We anticipate reaching our target 2x net debt to adjusted EBITDA leverage ratio by the end of the second fiscal year following closing, supported by the strong cash conversion of both companies.

As we deleverage, we will continue to reinvest in technology and growth while returning capital to shareholders via share repurchases to offset dilution, obviously subject to leverage and covenant capacity.

Moving to Slide 13. On synergies, we expect to realize approximately $30 million of annual run rate cost synergies with the majority realized within calendar year 2027. The key areas for synergy realization come from shared services consolidation, corporate and public company costs and technology and vendor efficiencies.

At run rate, that translates to approximately 100 basis points of consolidated margin expansion. Now it's important to note that our plan is grounded in clearly identified synergy opportunities and informed by what we have already demonstrated at Real.

For context, over the past 3 years, Real has reduced operating expenses as a percentage of revenue by 470 basis points and expanded adjusted EBITDA margins by 340 basis points. In short, we know how to run a lean, scalable platform, and we intend to bring that operating discipline to the combined organization.

Moving to Slide 14. We also believe there is a compelling revenue growth opportunity from leveraging the combined platform, not just from stronger agent and franchisee growth, but across our higher-margin mortgage, title and Real Wallet businesses. We also see significant opportunity to utilize our AI-powered consumer home search portal, HayLeo, to further nurture and monetize the 1 million annual leads generated across remax.com and remax.ca.

I want to emphasize that the accretion and value we've articulated today are not dependent on these revenue synergies. These opportunities represent additional potential upside. With that, I'll hand it back to Tamir.

Thank you, Ravi. On to Slide 15. As Ravi said, we know how to run a lean, scalable platform, and we intend to bring that discipline through the integration process and to the combined organization.

Our plan is well defined and set across 4 phases. Jenna Rozenblat, our Chief Operating Officer, has been appointed Chief Integration Officer for this transaction. She will lead a joint integration team working to execute with discipline to bring our organizations together.

Importantly, the pro forma leadership team will draw the best athletes from both organizations. Nobody understands the franchise business like the team who has built it and run it at RE/MAX, and we intend to leverage that institutional knowledge.

On Slide 16, let me close by stepping back to the bigger picture. Real estate is one of the largest markets in the world, and it is in the early stages of technology-driven transformation. We built Real to be the center of that transformation as a platform that serves agents, consumers and now franchisees.

The reZEN platform, Leo AI, Real Wallet and HeyLeo, these are not just features. They are an operating system purpose-built for real estate professionals and their clients. What RE/MAX adds is brand equity, a renowned franchise network and a global footprint to deploy that operating system at scale, and we could not build organically -- and we cannot build it organically in the near term.

Together, the combined company will have over 180,000 agents, approximately $2.3 billion in revenue, and we believe a fundamentally more compelling long-term earnings story. We expect to grow rapidly, operate more efficiently and deliver more value to every participant in the home buying and selling process and thereby delivering value to our shareholders.

We are excited about what comes next, and we are committed to executing this integration with discipline, transparency and a focus on long-term value creation. Before I close, I want to take a moment to acknowledge Dave and Gail Liniger.

Dave and Gail founded RE/MAX 53 years ago with a simple, but radical idea that agents deserve more. That idea became the most iconic real estate brand in the world. The fact that Dave and Gail support this transaction is not something we take lightly.

It tells us that they see in this combination what we see, a path to carry RE/MAX legacy forward for the next 50 years on a stronger foundation with better tools and with greater reach. We are honored by their confidence, and we are committed to delivering on our promises.

With that, I'd like to open the line for questions.

[Operator Instructions] and the first question today is coming from Ryan McKeveny from Zelman.

Congrats to you on the Real side and congrats to the team on the RE/MAX side, exciting news today. So a question for me. So Tamir, I think you discussed agent economics and kind of on the RE/MAX side, things stay as they are, on the Real side, they stay as they are.

I guess just thinking through the agent value proposition, I know on the RE/MAX side, they've made some transitions and adjustments in different type of plans, including Aspire with regard to bringing new agents on.

So how should we think about whether the franchisee sees a different go-to-market plan or different possibilities in terms of what they can present to agents on the RE/MAX side of things. Maybe you can just dig into that a bit from the viewpoint of what changes, what stays the same from the point of view of, let's say, an agent on the Real side and the agent on the RE/MAX side.

Sure. Sure. Great question. And it's a big one as well. I think that, first and foremost, I think that the RE/MAX leadership in the past couple of years have done a great job making sure that they're strengthening the value proposition and positioning RE/MAX to go back to growth in North America.

What we will try to do is make sure that we're operating 2 individual brands in parallel. So nothing changes for RE/MAX, nothing changes for Real in terms of branding and how agents and franchisees and team leaders operate on a day-to-day basis. What we'll try to do is add on top of that.

So the economics for them remains the same. But what we plan on doing is offering the real technology to all of the RE/MAX agents and franchisees so that they can leverage that technology in order to run their businesses more efficiently, have a better value proposition for their buyers and sellers and overall strengthening the value proposition that RE/MAX has for agents and franchisees.

So all in all, I think that this combination is a winning one because we are complementing each other and Real brings to RE/MAX what RE/MAX was trying to build on their own, and we've been successfully building for over the past decade.

And I think that, that technology is going to play a significant role in how RE/MAX attracts new franchisees and how franchisees and operators attract agents to their offices. In terms of branding, 2 separate brands, but the value proposition is just going to become stronger just because they will be able to offer more tools, more technology, bigger community, more lead exchange possibilities and just better monetization of their business.

And the next question will be from Stephen Sheldon from William Blair.

You have Matthew Filek on for Stephen Sheldon. Congrats on the announcement this morning. As you think about the integration, where do you see the greatest execution risk? And how are you planning to mitigate those? And related to integration, how quickly can RE/MAX agents be onboarded to Real's tech stack?

Thank you. I think that it's very important for both management teams to make sure that agents are behind that move and they understand that we're coming to provide additional value versus taking anything away.

So in the short term, we want to provide stability and make sure that both on the RE/MAX side, on Real side, everybody understands that it's business as usual and everything remains the same for them. In addition to that, once we close the transaction, there will be a team at Real that will be demonstrating and pitching our technology to the franchisees, and they will be able to elect whether they want to use it or not. So it's not mandatory.

We're not going to dictate anything. We're just going to present them the multiple offers and tools that Real has. And if they choose to elect, we will integrate them. So that will be done pretty much on day 1. We will actually start the communication prior to closing, I think, just to get them to be a little bit more familiar with the Real technology.

But franchisees that will be interested and agents that will be interested in adopting Real's technology, we'll be able to do that from day 1.

Great. And then just as a quick follow-up, could you briefly touch on timing of the announcement? What made you feel like now is the right time for something like this?

I think that when you look at the 2 companies, we've been obviously very impressed with RE/MAX. I've known that brand since I was a kid, and I always admired it.

I think that the 2 companies are now at a point where our technology has reached the maturity that enables it to go and be rolled out through a network of 150,000 agents worldwide. So we feel very confident in our ability to actually execute. Real, on its side, also mature to be a company that is operating at scale. We're at all 50 states and 5 Canadian provinces.

And once we look deeper into the 2 companies, we understood that they're just complementary. RE/MAX brings the brand, the brand recognition, an iconic brand, the scale, the global presence, we bring the technology, the growth. So it was a point in time where we understood that we have what they need and they have what we need, and it's a good point in time to join forces and build an amazing company together.

The next question will be from Matthew Erdner from JonesTrading .

Congrats to both parties in this transaction. What do you guys envision happening with the noncontrolling interest over at RE/MAX?

Obviously, Dave's behind the transaction is voting for it. But could you speak a little bit about that and a little more about the structure as you go forward?

Yes. Thanks for the question, Matt. And all the details will be filed in our filings in the agreement and the proxy that Alix mentioned. So happy to get into some of the technical details offline, but the noncontrolling interest will be converted into RE/MAX shareholders and then ultimately merged into the NewCo. So that's more of it. The technical mechanics are a little bit more nuanced than that, but yes, you won't see that noncontrolling interest line in the combined company.

The next question will be from Naved Khan from B. Riley.

Just curious about maybe the retention rates of the RE/MAX franchisees. How does that look like? And is it possible to use and Real maybe as a retention mechanism where people, franchisees who want to move over maybe can be on the real brokerage economics and the real brokerage model. So that's the first part of my question.

The second question is around just the potential for maybe tuck-in M&A. And what's the -- does this current transaction restrain you from engaging in any sort of tuck-in M&A maybe in the title space or mortgage space or such?

Thanks for the question, Naved. So I can take the retention rates and M&A and Tamir, you can address some of the mechanics or post-close vision. But RE/MAX has had incredibly strong retention rates. As you know, it's a franchise model where every year, a certain percentage of franchisees are up for renewal, and we've been very impressed with the renewal rates in recent years, both in the U.S. and Canada.

So I think given the visibility in the franchisee renewal schedule, we're pretty excited about the recent track record and the go-forward opportunity to retain our most productive franchisees. On the M&A side, look, I think the initial priority will be deleveraging, but we expect to do that quite rapidly.

And at the same time, we'll have the flexibility to return capital, buy back stock and also explore tuck-in M&A should opportunities arise. But first order of business is getting the transaction closed and financed and then reducing leverage post close.

And just to add on that, Naved, Real has been taking market share from pretty much all of the players in the industry in recent years. We want to make sure that we protect the hard work that RE/MAX franchisees have put into building their businesses. So there will be measures that we will put in place to make sure that we protect their businesses and Real does not take agents from RE/MAX. So we want to make sure that they understand that.

We want to make sure that they understand that we want to protect and grow their businesses. And at the same time, we also want to make sure that we have a very compelling offering for any agent who is not currently with Real or RE/MAX and is looking for a change. So they find the right model for them under that umbrella of the combined company.

[Operator Instructions] the next question is coming from Tom White from D.A. Davidson.

Congrats on the deal. Just 2 quick ones, I guess. Maybe just a follow-up on the last question. Existing franchise agreements at RE/MAX. I'm just curious if like any of them have like change in control provisions or how?

And if so, kind of how you expect that might play out with the deal? And then also, I was maybe just hoping for a little bit more background on how the deal came together. Was it just sort of the result of organic kind of ad hoc discussions? Or was there sort of more of a structured process?

Thanks for the question. Yes. So there's no change of control out or anything in the franchise agreements. So hopefully, that helps on the first question.

On the second question, I appreciate the question. I think we'll defer to the proxy when all the details will come out. But needless to say, both companies are very excited about the opportunity ahead to operate and deliver value as a combined company for all of our stakeholders.

That concludes today's Q&A session. And this also concludes today's conference call. A replay will be available on the Investor Relations section of both company websites. Thank you for your participation, and have a good morning.

Welcome to The Rea Brokerage Inc. webcast for the fourth quarter and full year ended December 31, 2025. We appreciate everyone for joining us today. With me on the call today are Tamer Poleg, our Chairman and Chief Executive Officer; Jenna Rosenblatt, our Chief Operating Officer; and Robbie Jane, our Chief Financial Officer. This morning, Real published an earnings press release, including results for the fourth quarter and full year ended December 31, 2025. The press release, along with the consolidated financial statements and related management's discussion and analysis for the full year ended December 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'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.

With that, I'd like to 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 Real, and our fourth quarter results provided a strong finish. In the fourth quarter, we grew close 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 $2.0 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 especially notable given the broader housing backdrop.

Existing home sales remain well below long-term average, 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, One Real 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 Gorevic as CEO of One Real Mortgage and look forward to seeing accelerating growth and improve profitability under her leadership.

One Real title generated $5 million in revenue, up 5% from 2024 as we began transitioning our model towards more scalable state-based joint ventures. Today, One Real title operates 13 joint ventures with operations across 17 states, and we expect to open 3 additional joint ventures in 2026, Real wallet, 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 agent's daily financial workflows, while brokerage remains the core engine of the business, these ancillary services represent the next layer of value creation, the increase engagement, improve retention and expand revenue and gross margin per transaction.

Over the past decade plus, we've 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're not managing a collection of disconnected tools or regional systems. We're operating 1 unified platform across North America, that consistency is what allows us to improve the system year after year.

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

Thanks, Tamir, and good morning. As Tamir noted, 2025 was another transformational year for real. 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 Resin, 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 unified 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're not layering stand-alone tools on top of fragmented systems. Instead, we're 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 e-mail 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 head count 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've 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 head count from scaling linearly with the transaction volume. Over time, these improvements compound, that's what makes the leverage durable.

And last but certainly not least, in the fourth quarter, we extended helio.com, our unified platform to the consumer. He LEO is our AI-powered consumer portal, where homebuyers converse with intelligent agents to find their next property. This isn't just a search site. It's 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 Helio e-mail address. The power of Helio lives in its Atlas skilled layer. It's backed by comprehensive MLS data with 180 integrations today and a target of 400 integrations by July and nationwide school and neighborhood insights whether a buyer is testing a question about a school zone or e-mailing about a kitchen layout, the AI provides instant data-backed responses and 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-end scaling advantage. While he Leo 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 Helio's consumer engagement, we believe we have developed a structural advantage that is scalable, durable and economically meaningful.

I'll 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 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 Real Wallet, 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 transaction 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 transition 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 Qunar 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 the fourth quarter of 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 the fourth quarter of 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 a loss of $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.

Real 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're 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 2 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'll now turn it back to Tamir.

Thank you, Ravi, and thank you, Jane. 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 the 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 Real, our goal wasn't to build 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 isn't 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 processed 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 Real. We are still in the early innings, and we are building this to endure.

[Operator Instructions]Once again, if you have any on your phone. Your first question is coming from Stephen Sheldon from William Blair.

First, I think I've probably asked this most times. So I just wanted to ask about the agent recruiting environment and pipeline. There's a lot of changes in the industry, especially with the Compass Anywhere merger. So 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 in late 2025.

Kevin, yes, 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 shouldn't rely on just occasions in the industry in order to attract agents. So the pipeline is strong. We think that there's 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're 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 on a follow-up on the title side, great to hear that you have more states opening tonight. It sounds like 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're starting to see the fruits of that labor. We're 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 months and couple of quarters, we will see a significant movement. We're not happy with the performance in 2025. We understand that it was a transition year but it's 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'll start seeing the signs later this year.

Your next question is coming from Naved Khan from B. Riley.

Great. So 2 questions for me. Maybe 1 just on the building on the title. So can you maybe quantify the drag from the transition that you had 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 have shared some data points about attach rate that you are seeing in some of these markets that you're trying to send over? Can you maybe share some color on like 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. So now you have more than, I guess, more than 100 loan officers, and you'd also introduced the consumer-facing Rio to kind of help with that in terms of driving attach for mortgage. What are the early results from these initiatives that you're seeing?

Thank you, Naved. So on title, the attach rates that we've been seeing in the past couple of months are between 3% and 4%. Within the JVs, we have seen tax rates of 30% to 40%. And so we want to see those percentages grow even further. And we also think that there's a 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's taking a little bit of time. But we would like to see the attach rates go beyond where they are right now, obviously, in the short term.

On mortgage, as you know, we brought in Kate as the new CEO of One Real Mortgage 1.5 months 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'll see an uptick in mortgage. We're very happy with the -- 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 with Leo we're trying to experiment with AI technology that helps our agents nurture leads and convert leads in the background without them doing too much. And we think that, that will also help us drive mortgage and title. It's still in the early days, it's alpha test but it's showing very promising signs. So I'm very optimistic about our ability to attach ancillary services through technology. And I think that Leo will become an essential part of 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 energy to state-level JVs?

I can take that one. It was similar to last quarter. It was in the neighborhood of a couple of hundred thousand dollars of revenue from JVs that existed in the prior year that were wound down and haven't ramped back up. And so 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 yes, we should be back to double-digit and solid double-digit growth as the year progresses.

Your next question is coming from Matthew Erdner from Jones Trading.

I know you guys touched a little bit on the Cape agents kind of 400 basis point increase. Where do you expect margins to kind of normalize, I guess, once we work through, I guess, call it, the slug of the market where a lot of the capped agents are winning transactions.

Yes. Thanks, Matt, for the question. I think we're 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 had announced last year start to manifest, and we start to see ancillary reaccelerate. We should be at a point where we're seeing less of or no drag on margins as we get to the second half. But just given where we ended '25 and enter '26, 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 we are -- while we are focused on the margin rate, we're 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'll -- we have taken corrective action on that front. But I think importantly, we're controlling what we can control on the fixed OpEx side as well. And so that should translate to improved bottom line.

Got it. That's helpful there. And then last 1 for me. I'll keep it kind of short here. What are you guys looking for in terms of greater adoption on the Wallet side and kind of growing that overall deposit base, call it?

Yes. It's a combination of a couple of things. We have about 7,000 agents on the wallet, and we want to see more agents just utilizing the Wallet. We think that there are ways to push agents to adopt the wallet even further. And we're contemplating those actions. We'll probably see them later on this year. At the same time, we are -- one of the biggest drivers of revenue to the Wallet is Real Capital and Real Capital expand to more and more states. I think that we're currently in 20 or 21 states. So we have still a long way to go there. So as we see more states opening up and more agents having lines of credit available to them, we will see more revenue driving into the Walle.

[Operator Instructions] Our next question is coming from Nick McAndrew from Zelman.

My questions do one on the churn side of things to start. So I think agent churn has improved improved pretty dramatically in the -- just the back half of the year to the mid-single digits. And I'm just wondering how much of that is attributable to ancillary products like Real Wallet and maybe the credit lines that are creating switching costs for agents versus how much of this is just simply better agent quality coming in the door?

Thank you, Nick. It's 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 as an incremental way to just value the platform. So the more services we offer, the hardest it gets to leave the platform. Obviously, if you have a line of credit from real, it's 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's 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.

That's helpful. And maybe following up on that, I think just there's been some level of multiple compression and a lot of software names across the space that have been driven by concerns around a genic AI disruption. And I'm curious if you're able to just reiterate how you think about the tech stack relative to peers but even more broadly, just 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 kind of agentic AI developments as just a net opportunity for Real's 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 don't think that agents can figure all of that on their own. I think that it's important to have an integrated platform where all of the information is in one place. and AI has actually 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're trying to build. I think that agents on their own will never have the ability to build something as powerful as what we're building for them. So for us, we'll continue to invest, and we just want to create an unfair advantage for agents and it's starting to happen these days.

All right. Well, thanks for the question, Nick. Now that we've concluded -- actually, Matthew, are there any more questions in the queue?

Certainly, there are no further questions in the queue.

Great. Well, now that we've concluded the analyst portion of the call, we wanted to address some of the questions we received from shareholders on the say 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 real to turn a profit? And is there anything shareholders can do to help real become profitable?

Thank you for the question. It's 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 as you've seen, despite having significantly larger agent basis. 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're buying or selling a home work with the reagent, utilize the One Real mortgage loan officer and choose One Real 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 time line to consolidated profitability.

Thanks, Samir. So the next question I'll take, do you anticipate stock-based compensation to continue to scale at around the same pace as cash flow or well level out or decrease at some point. So I appreciate the opportunity to clarify our approach to equity. First, it's important to note that nearly all of our agent equity awards are tied directly to production.

And so we don't large upfront checks or offer guaranteed signing bonuses. Equity is primarily earned only when a transaction closes or an reaches a production-based milestone such as hitting their annual cap or achieving elite status. And we're already seeing some natural leverage in the model as we scale in the fourth quarter specifically, stock-based compensation as a percentage of revenue declined by 80 basis points year-over-year, and 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've seen that over the past few years. And so with all that said, we remain highly mindful dilution, which is why we have a buyback program in place to offset it.

And given where our stock is currently trading, we're pleased to be in a position where we have that excess cash available to repurchase shares.

And the last question for Tamir. Can you talk about the growth in real wallet and revenue growth, specifically? How has it trended since the product launched?

Sure. Real Wallet has been a standout story -- success story for us. The business generated around $900,000 in 2025 and is currently generating annual 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 the wallet, as I mentioned with our total deposit balance growing to over $23 million. On the lending front, we've 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, the 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 conference will be available for replay. The replay phone numbers are (877) 481-4010 or (919) 882-2331. The replay code is 364. And once again, the replay phone numbers are (877) 481-4010 or (919) 882-2331 and 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.

Good morning, ladies and gentlemen, and welcome to the Real Brokerage Third Quarter Earnings Call. I will now turn the call over to Ms. Alix Lumpkin, Chief Legal Officer at the Real Brokerage. Alix, the floor is yours.

Thanks, and good morning. Thank you for standing by, and welcome to the Real Brokerage Conference Call and Webcast for the third quarter ended September 30, 2025. 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 third quarter ended September 30, 2025. The press release, along with the unaudited 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.

With that, I'd like to turn the call over to Chairman and Chief Executive Officer, Tamir Poleg. Tamir, please proceed.

Thank you, Alix, and good morning, everyone. Real is a real estate technology company that is differentiated in our industry. Unlike traditional real estate brokerage firms, we provide real estate agents with a compelling combination of financial incentives, a proprietary software-based platform that eliminates the need for an agent's physical office space and a collaborative culture that we believe is unique in our industry.

Our vision is to simplify life's most complex transaction, the purchase or sale of a home by providing agents with the tools, technology and resources they need to grow both their businesses and themselves while delivering a seamless experience for clients. In the short term, this vision includes the rollout of a consumer-facing product designed to streamline the client experience and enhance attachment of our higher-margin ancillary services.

Over the long term, we see Real evolving into a holistic financial ecosystem for agents, providing them with an avenue to build long-term wealth within a single platform. Our goal is to redefine the role of a real estate brokerage in the lives of our agents and in the broader housing industry. That's why we will remain relentless in our focus on delivering long-term value for our agents, for their clients and for our shareholders.

Turning to our results. Q3 was another quarter of exceptional organic growth for Real. We continue to materially outperform the broader housing market, gaining share, expanding our agent base and scaling our platform in a disciplined way. While industry transaction volumes grew modestly, Real's closed transactions increased nearly 50% year-over-year, and we surpassed 30,000 agents on our platform for the first time.

A few financial highlights. Revenue in the third quarter grew 53% to $569 million. Gross profit increased 40% to $45 million and outpaced a 31% increase in operating expenses, which also totaled $45 million. Net loss was approximately breakeven at negative $0.3 million. Meanwhile, adjusted EBITDA was positive $20.4 million, a 54% improvement from last year and contributed to operating cash flow from operations of approximately $9 million.

Let me spend a moment on how each of our businesses performed. Brokerage revenue grew 53% to $565 million, driven by both agent growth and higher productivity. We ended the quarter with over 30,100 agents, up 39% from a year ago, and as of today, our agent count stands at approximately 30,700. Real agents closed more than 53,500 transactions totaling over $21 billion, up 49%. That performance speaks to the strength of our attraction flywheel and the quality of the agents who continue to choose Real.

Our brokerage business was once again profitable on a net income basis, and we continue to reinvest these earnings back into our ancillary businesses, which typically generate gross margins that are 5x to 8x higher than brokerage. In One Real Title, revenue was $1.3 million as we continued transitioning from team-based to state-based joint ventures, a shift designed to enhance scalability and long-term profitability. Under our new title leadership, we expect this structure to begin contributing more meaningfully in the quarters ahead, and we are encouraged that attach rates among our JV partners exceeded 35% in the quarter.

One Real Mortgage delivered another strong quarter with revenue up 47% year-over-year to $1.8 million. Growth was driven by the addition of productive loan officers and the launch of our inside sales team earlier this year. As of now, the business included approximately 100 loan officers, more than 60 of whom are participating in our Real originate program.

Lastly, Real Wallet, our financial technology platform continues to scale quickly and is deepening engagement with our agents. Quarterly revenue reflects the launch of our Real Wallet Rewards program, a new benefit that we believe will further accelerate adoption. As of today, more than 4,600 agents now use Real Wallet business checking accounts with total deposits exceeding $20 million, up from approximately $40 million at the time of our last earnings call.

Earlier this month, we launched Real Wallet Capital across 28 U.S. states, providing agents with fast access to liquidity, allowing them to invest in their business and help manage cash flow between transactions. For agents, income can often be highly variable. In some cases, months can pass between closings and traditional lenders simply aren't equipped to underwrite that type of earnings profile. With Real Wallet Capital, we can extend credit based on an agent's production history and projected income with Real, offering financing that many banks could not. We believe Real is the only major brokerage offering agents this kind of embedded access to capital and doing so often same day.

Beyond the financial opportunity, we view Real Wallet Capital as both a differentiated attraction and retention mechanism, a solution that helps agents remain engaged on our platform. While we're still in the early innings, we see this as a meaningful differentiator for agents choosing where to build their business. Today, Real Wallet is currently operating at an annualized revenue run rate of over $1.2 million, and we remain encouraged by the momentum.

Now for more detail on our operational performance, I'll turn it over to our COO, Jenna Rozenblat.

Thanks, Tamir, and good morning. During the third quarter, our operations organization made meaningful progress in leveraging AI and automation to streamline workflows, enhance service metrics and improve our ability and overall cost to serve.

I'll give a few examples. In September, we launched Real's dedicated AI automation team focused on using AI and workflow automation to reduce manual or low-value processes across the organization. In just the first few weeks, the team delivered more than a dozen live automations, collectively saving the business more than 10,000 hours annually, equivalent to multiple full-time roles.

Those hours represent capacity we've been able to reallocate toward higher-value activities, improving agent support, quality assurance and product development without adding additional headcount. For example, an automation of our pro team migration process allowed us to complete the migration of all of our existing teams into our pro team infrastructure months ahead of schedule.

At the same time, we're continuing to scale our agent-facing AI tools through Leo CoPilot, our proprietary intelligent assistant integrated within the reZEN app. As a reminder, in Q2, we rolled out Leo as the first line of agent support for phone calls in reZEN, answering questions instantly, routing requests and resolving issues before they reach our human support team.

In Q3, we expanded Leo's reach to also be the first line of support for agent e-mails. In the second quarter, Leo handled about 28% of all calls initiated through reZEN. By the end of the third quarter, that figure had grown to approximately 47%, handling more than 10,000 agent phone and e-mail interactions autonomously. Overall, even as our agent base grew nearly 40% year-over-year, response and resolution times declined and agent satisfaction remained above 90%.

Importantly, these improvements are translating into stronger agent retention, evidenced by our revenue churn, which declined to 1.4% in the third quarter, the lowest level in more than 2 years. Each of these initiatives, while small individually, compound to create significant productivity gains over time. They enable us to handle higher transaction volume and agent growth with limited incremental cost, directly contributing to Real's improving operating expense per transaction and overall operating leverage.

Now before I hand it over to Ravi, I want to highlight 2 additional developments impacting our agent community. First, next week, we'll host our annual RISE Agent Conference in Orlando, where 2,000 agents and industry partners will gather to share best practices, collaborate in person and celebrate the culture that makes Real so unique. We'll also showcase several new initiatives designed to further power our agents' businesses and enhance their ability to win in today's market, so stay tuned.

Second, this month, we officially expanded our operations into Saskatchewan, our fifth Canadian province. Canada continues to be a meaningful growth opportunity for Real, and we expect this expansion to unlock additional agent and transaction growth as we strengthen our presence across the country. In short, we're executing on the operational foundation that enables Real to grow faster than the market, while continuously improving efficiency, scalability and engagement.

Now I'll turn it over to Ravi to walk through the financial impact in more detail.

Thank you, Jenna, and good morning, everyone. Our third quarter results demonstrate the continued strength of Real's model, high organic growth, disciplined expense management and improving operating margin. Total revenue for the third quarter rose 53% to $568.5 million compared to $372.5 million in the same period last year. Growth was driven primarily by our North American Brokerage segment, which saw a 49% increase in closed transactions to more than 53,000 in the quarter.

Our ancillary businesses generated $3.2 million in revenue, up 25% year-over-year, led by One Real Mortgage and Real Wallet, while One Real Title was impacted by the shift from team-based to state-based joint ventures. Gross profit increased 40% to $44.9 million compared to $32.1 million a year ago, with gross margin of 7.9% versus 8.6% in the prior year period. The year-over-year change primarily reflects a higher proportion of transactions completed by agents who have reached their annual cap.

For reference, the percentage of total transactions closed that were post cap increased by approximately 500 basis points relative to last year. As a reminder, once an agent caps, they stop paying Real the standard 15% split and instead pay a $285 per transaction fee, which results in lower gross margin on those post-cap transactions. While this mix shift creates near-term pressure, it also reflects the maturity and productivity of our agent base.

We do expect this to normalize as market activity improves and transaction growth becomes more evenly distributed between cap and non-cap agents. Of course, over time, continued growth in our ancillary businesses should support overall gross margin expansion.

Operating expenses, including G&A, marketing and R&D, totaled $45.3 million, up 31% from $34.6 million last year. The largest driver was revenue share expense, which rose 35% to $15.6 million, up from $11.7 million in the prior year, consistent with our strong agent production. The remainder reflects investments to support growth, including expanding our operations and R&D teams and further enhancing our technology platform.

Operating expenses represented 8% of revenue in the third quarter, an improvement of 130 basis points from 9.3% a year ago, reflecting strong cost discipline. Adjusted operating expense, what we view as our fixed cash cost was $21.7 million or 3.8% of revenue, down from 4.5% in the third quarter of 2024. On a per transaction basis, adjusted operating expense declined 13% year-over-year to $405 compared to $468 in the third quarter of 2024.

For the third quarter, we reported an operating loss of negative $0.5 million compared with a $2.5 million loss in the third quarter of 2024. Operating margin improved to negative 0.1% from negative 0.7% in the prior year period. Our core brokerage segment remained profitable, generating $0.8 million of operating income, while we continue to reinvest in One Real Mortgage, One Real Title and Real Wallet, which collectively generated an operating loss of $1.3 million as they scale. On a non-GAAP basis, adjusted EBITDA rose 54% to $20.4 million, up from $13.3 million last year, reflecting growth in gross profit outpacing growth in operating expenses.

Total stock-based compensation was $19.9 million, with $12.6 million related to the agent stock purchase program recorded in cost of sales, $3.9 million in agent equity awards recorded in marketing and $3.4 million in employee-related stock compensation. We generated cash flow from operating activities of $8.8 million in the quarter and returned capital to shareholders by repurchasing 3.2 million shares for $15.5 million under our existing buyback authorization.

We ended the quarter with nearly $56 million in unrestricted cash and short-term investments, an all-time high and continue to carry no debt, giving us ample flexibility to fund growth and future share repurchases.

To close, a few key operating metrics. Our median sale price was $390,000, a 2% year-over-year increase and our headcount efficiency ratio, which reflects the number of full-time employees, excluding Title and Mortgage employees divided by the number of agents on our platform was 1:89, compared to 1: 87 last quarter, still among the most efficient in the industry.

While we don't provide formal guidance, consistent with typical industry seasonality, we expect fourth quarter revenue to decline compared to the third quarter and for lower gross margin year-over-year, in line with trends we've seen throughout 2025. From an OpEx standpoint, we expect an increase in our non-variable OpEx in the fourth quarter. This reflects both planned headcount additions to support future growth as we prepare for an even stronger 2026 as well as costs associated with our annual RISE Agent Conference, which takes place in the fourth quarter each year. 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. In closing, our continued outperformance is not the result of any one initiative, but of a system working together at scale. A differentiated business model, a powerful technology platform and a culture that attracts productive agents who want to build their businesses at Real, not just hang their license.

From my perspective, 3 key themes defined our performance this quarter. First, our model continues to win in any market environment. Our growth has been broad-based and entirely organic, driven by word-of-mouth, productive agent networks and the strength of our value proposition. Agents come to Real because our economics are aligned with theirs, our platform simplifies their workflows and our culture enables collaboration over competition.

Second, we are scaling with discipline. Once again, we grew revenue and gross profit faster than our operating expense base. That operational discipline paired with automation, AI adoption and a culture that thrives on doing more with less, continues to strengthen our path towards sustained profitability and margin expansion.

Third, we are transforming what a modern real estate platform can be. Our vision extends beyond brokerage. Instead, we're building an integrated ecosystem that simplifies the transaction, better serves consumers and increases agent productivity while expanding new higher-margin revenue streams. Mortgage, Title and financial products like Real Wallet are still early, but advancing meaningfully and strategically every quarter. We remain deeply confident in our strategy, our people and our opportunity, and we're just getting started. We look forward to updating you on our continued progress in the quarters ahead.

Now let's move to the Q&A session.

[Operator Instructions]. The first question today is coming from Stephen Sheldon from William Blair.

Nice results here. First, I wanted to start on the reduction in agent churn. Great to see that kind of pull back sequentially. Can you just talk about some of the factors that drove that so much lower 2Q to 3Q? Then I know it can be a little volatile quarter-to-quarter, but how should investors be thinking about that kind of metric trending as we look forward? Should we expect some stabilization there and/or potentially that continuing to trend a little bit lower? I guess, just generally, how are you thinking about agent churn trends?

Yes, as you said, there's volatility in agent churn. Having said that, I do think that the platform delivers more-and-more value as we continue to progress. I think that the lower numbers reflect the value and the fact that the platform just becomes more-and-more sticky. I also think that if agents think about some alternatives out there, I don't think that there's any better alternative in terms of a brokerage. That's probably what those numbers signal.

I think that we will continue to work hard on improving the service. I think that everything that Jenna mentioned on the AI front and the fact that we're putting AI to work provides a better level of service to our agents and everything that we're doing with the wallet just makes the platform itself more sticky. I think that as long as we continue to be under 2% revenue churn per quarter as we have been for quite a long time. We'll continue to see those numbers. We're happy with what we're seeing. It's just about execution, delivering great service, great products, great features and just continuing to lead the market and the numbers speak for themselves.

Then on Title, I guess, what have been some of the early takeaways as you've shifted to state-based JVs? Takeaways, I guess, both in terms of the attach rates you're getting and the eventual profitability. I think you mentioned, 35% attach rates for JV partners this quarter. I guess, just generally, how has that been trending throughout the quarter? How long do you think it could take for Title to really start to ramp monetization and gross profit overall?

It's a great question because we're putting a lot of emphasis and focus on ancillary services and title primarily, I would say. I actually looked at the data a couple of hours ago, and at the beginning of the year, our attach rates were in the range of 2.4% to 3% overall. Then we transitioned from the team-based JVs to state-based JVs, and that transition created headwinds of about minus 50% for us as a business. September, we had -- in September, we had attach rates of 3.7%. I think that we're doing -- we're making some progress in terms of attach rates.

As Ravi mentioned, the attach rates on the new JVs are at around 35%. I think that we can get much higher, but we're seeing great momentum in some states and just to remind everybody, this is still early on in this new strategy of state-based JVs. I think that just in order to put things in perspective overall, on the brokerage side, we started the company back in 2014. During the first 6 years of the company, we added about 800 agents.

Between 2014 and 2020, we ended -- we had about 800 agents in 2020. The following 5 years, we added 30,000 agents. I think that we were able to do that through a lot of trial and error and tech innovation and listening to our agents. I think that the same will happen with Title. I think that we are approaching a point where we have a critical mass of features and incentives and alignment with our agents in order to drive massive adoption to our ancillary services.

One more thing. Next week, we have our annual RISE Conference, where we will be announcing what I believe is the biggest tech innovation that we have announced since starting the company, and that innovation will have massive impact on our ability to attach Title, Mortgage, Wallet and Insurance later on. I think that we're very close to seeing a meaningful change in the adoption of our ancillary services.

Good to hear. I look forward to hearing more about that next week. Maybe just one last one. There have been some large M&A announced that will drive some brokerage consolidation. Just generally, when something like that happens, does it usually drive opportunities to pick up churn from agents that aren't happy at those firms that aren't happy about the change? Have you started to see any of that following recent announcements?

If we look at our numbers over the past few years, we're seeing that we are taking market share from everybody else. I'm not sure that those recent announcement about M&A intentions are really making a big impact on the market as we speak. I think that once that transaction closes, we will likely see a little bit more interest from people who are kind of searching for a new path, but we're not counting on that. We're counting on our organic growth and our ability to attract agents based on our value proposition, and we're not capitalizing on anybody else's troubles or discomfort in order to fuel our growth. For us, it will be just a cherry on top of the cake, but we continue to grow regardless.

The next question will be from Naved Khan from B. Riley Securities.

Maybe just to touch on this Leo CoPilot. It looks like usage is up, but just talk about adoption in terms of the percentage of agents that have -- that are using it more versus those who might not have or might be early on in that? Where are you in terms of training and onboarding people to just kind of be more effective with the use of CoPilot? Then I have a follow-up.

Actually, when we think about the usage of Leo, it's 100% usage because all of our support goes through those channels. Whenever an agent actually reaches out to our support team, that's all done through Leo. Naturally, they are going to be using Leo when they get support. It's something that we go over with them when they come on to the company. We have training sessions to go through how to utilize Leo. From an adoption standpoint, there's 100% adoption from agents needing support.

Then when it comes to Mortgage, I guess you talked about having 100 loan officers, around 60% of those are unreal. What are some of the levers you can pull to kind of drive the attach for Mortgage higher from here? How many states are you in currently? How do you plan to expand that offering?

Yes. We're trying to go deeper into the states we're already operating in, and we operate in about 15 states. I think that the biggest lever that we can pull is on the technology integration side, and it goes back to what I said about this announcement that we're going to make next week. I think that making the entire process easier, both for our agents and for their clients and having everything on the app and everything integrated so that they can receive real-time updates, they have full visibility into the process. The agent is fully aware of what's going on, on the mortgage side. The buyer is fully aware. I think that, that could drive meaningful adoption, and we will talk about it a little bit more on the RISE conference.

If I have to think about -- and this is last question, but if I have to think about capped versus uncapped mix of agents, how does -- how did it compare in the last quarter versus prior periods, prior third quarter periods? Is that going higher? It seems like the mix of transactions through the more people who are uncapped is higher, and that's why your gross margins are lower. How should we think about that stabilizing at certain levels around here? Just give us your thoughts on the mix.

Yes. Naved, thanks for the question. The agent mix, it's typically anywhere between 10% and 12% of agents hit their cap at any moment in time. That's the percentage of agents who are capped. I think the more operative stat, though, is this quarter, approximately 500 basis points of our total revenue mix increase relative to last year that was driven by post-cap transactions. Rough order of magnitude, if 40% of our transactions were post cap last Q3, this year, it was closer to 45%, and so that's really what drove that margin mix shift that we discussed.

[Operator Instructions]. The next question is coming from Matthew Erdner from Jones Trading.

Congrats on another solid quarter. Most of the questions that I had have been taken, but I kind of want to follow-up on what you touched on earlier as it relates to non-variable operating expenses. It looks like there was a pretty good sequential increase in R&D expenses. Should we treat 3Q as kind of a go-forward run rate as it relates to R&D?

Yes. Matt, good question. I would say, if you look at the R&D line over time, it has been increasing, and that's really a function of the investments we're making in technology across the business. This quarter, in particular, though, does reflect the addition of the folks from Flyhomes' and the Flyhomes' assets we acquired at the beginning of the quarter. You will continue to see R&D grow year-over-year. It's the fastest growing portion of our fixed OpEx base, but we do view that as a good and necessary investment.

That's one of the things that will also tick up sequentially, particularly as we launch some of these AI features. As you know, there are costs associated with investing in AI, both on the personnel side as well as just the cost to serve. Yes. I mean, as always, if you look across our fixed cost base, in general, our OpEx base grew 31% versus the 40% increase in gross profit. We will continue to be disciplined and focus on growing overall OpEx at a slower pace than gross profit, but R&D will continue to be a focus area for us to continue to invest for the future.

Then in prior quarters, you guys have kind of talked a little bit on the M&A front. Then you just mentioned Flyhomes' there. Do you guys kind of expect to do anything or still looking in the market? Or at this point, is it just investing in your own businesses, the ancillary services and building from within rather than acquiring a piece and adding it on?

Sure. Tamir, do you want to take that one?

Yes, I'll take it. Matt, we believe we have all of the components and the technology that we need in order to build what we plan to build in the coming years and just accomplish our vision. Having said that, we are looking at several M&A opportunities. I don't think that it will be on the technology front. We also -- as you know, we have grown organically, and we haven't really ever made any brokerage-related acquisition. I think that it could be interesting for us to look at some small acquisitions when it comes to title companies just to create some local presence, strengthen our local presence, and this is something that we're looking at, at the moment, but even if this will not materialize, I think that we have everything we need from an M&A perspective.

The next question is coming from Nick McAndrew from Zelman & Associates.

Congrats on another strong quarter. I think the 2,000-plus agent additions is pretty encouraging to see. Maybe just as we think about the sustainability of agent growth into 2026, anything to call out and just the levers that are driving that continued momentum? Maybe if you could also just expand on what gives you the confidence that this pace of net additions can be maintained as the agent base just grows beyond 30,000?

Nick, so yes, we're currently at a little bit over 30,800 agents, and we have a very strong pipeline, hopefully, to finish the year with. We have some large opportunities, larger than ever before. I feel very confident about our growth in coming months and actually coming years. I think that the confidence is coming out of the understanding that we have built a platform that is extremely compelling for agents.

We have to remember that all of the growth is organic and about 85% of the growth is coming from our agents attracting other agents. We have a very small growth team consisting of 4 people. We're not doing too much of an outbound even though we started now kind of implementing some outbound strategy. I think that just the market potential is there.

As we look into the next 5 to 10 years and everything that is changing within the traditional brokerage world, I think that more-and-more agents, more-and-more teams and more-and-more independent brokerages will be looking for alternatives that are similar to what we offer, and we are very well positioned to capture a meaningful part of that churn that will be happening on the traditional model side.

We feel confident. We have what it takes, and we rely on our efforts and on our agents' efforts in order to attract other agents. As I said, we have a strong pipeline that supports that.

Jenna, apologies if you touched on any of this already, but I think adjusted OpEx per transaction was down 13% year-over-year. I'm just wondering if there's anything to call out and just what's driving that leverage? Because I think last quarter, you mentioned that roughly half of transactions could be processed automatically through reZEN with pretty limited human oversight. I'm just wondering where does that figure stand today? Are there still remaining workflows that you see as kind of the next opportunity for automation?

Yes, absolutely. As I mentioned in my section, we've really been investing in this AI and automation team and really just getting started. Even things that maybe we didn't think possible before, we're diving head first into. There's a lot of great updates that I'll be providing most likely on our next call, recapping Q4, but yes, you're correct. We're working on automating those 50% of the transactions and also a number of other areas for reviewing contracts automatically through our automated broker review. There's a number of different initiatives that we're working on that are just going to continue to push the needle there and make us even more efficient month-over-month.

There were no further questions from analysts in the queue. I will now hand the floor over to CFO, Ravi Jani, for questions from retail investors.

Great. Thank you, Paul. Now that we conclude the analyst portion, we wanted to address some of the questions received from shareholders on the Say Technologies Q&A portal. We received a number of excellent questions. Thank you to all who participated. I think some of them were actually addressed in the analyst portion. I'll just address 2 that haven't been.

First one for Tamir. How has the Real Wallet growth progressed? What revenue numbers can we expect from the Real Wallet?

Sure. First of all, the Real Wallet is a very exciting product, and we're really proud of how quickly the wallet has scaled. In less than a year since launching it, we now have over 4,600 agents using Real Wallet business checking accounts with deposits totaling around $20 million, and those deposits number are growing. As you remember, last call, it was around $14 million. The product is already generating over $1 million in annualized high-margin revenue, and that does not include the incremental opportunity from Real Wallet Capital, which we launched in the U.S. this month. The early adoption and engagement rates are very, very strong. It deepens the relationship we have with our agents and provides meaningful day-to-day value beyond just brokerage economics.

I think that looking at the numbers of Real Wallet Capital, that makes me extremely optimistic as to the opportunity of Real Wallet and how well it was received by our agent community in the U.S. since launch.

Thanks, Tamir. The last question was, how is the company planning to expand profit margins? What are expected margins in 3 to 5 years? I'll take this question.

It's a great question. Obviously, we are focused on margin expansion that will come from both gross margin improvement and OpEx leverage. It's obviously difficult to have a crystal ball and predict 5 years out. I think directionally, we see the path to adding a few hundred basis points of margin expansion over that time through that combination of higher mix shift and better expense leverage.

I think with that, -- if you have any additional questions on today's earnings release, please feel free to contact me directly. Otherwise, Paul, would you please give the conference call replay instructions again?

Certainly. Thank you, everyone. This does conclude today's conference call. Today's conference will be available for replay from 11:00 a.m. today. The replay phone number is (877) 481-4010 and the replay code is 52933. Once again, the replay phone number is (877) 481-4010 and the replay code is 52933. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.