CORRECTING and REPLACING The Real Brokerage Inc. Announces Third Quarter 2022 Financial Results
The updated release reads:
Additional information concerning Real’s unaudited consolidated financial statements and related management’s discussion and analysis for the nine months ended
Third Quarter Financial Highlights
-
Revenue increased
188% year-over-year to$111.6 million -
Gross profit grew
158% year-over-year to$8.6 million -
Net operating loss of
$4.3 million $1.0 million -
Operating expense as percentage of revenue of
11.5% , compared to11.2% in Q3 2021. -
Net loss attributable to owners of the Company of
$5.2 million $1.1 million -
Loss per share of
$0.03 $0.01 -
Adjusted EBITDA loss of
$1.9 million $0.7 million -
As of
September 30, 2022 , the Company held$21.9 million $9.8 million -
The Company repurchased
$1.1 million
Operational Highlights
-
Surpassed 6,700 agents at the end of Q3 2022, a
126% year-over-year increase. - Subsequent to the end of the quarter, Real surpassed the 7,000 agent milestone in October.
-
The number of transactions executed over the platform grew
197% year-over-year to 11,233 in Q3 2022. -
The value of completed real estate transactions grew
193% year-over-year to$4.2 billion -
For agents that closed a deal during Q3, commission revenue per agent was slightly over
$35,000 -
Operating expenses per transaction, excluding revenue share, declined
43% year-over-year to$802 $1,419 -
Subsequent to the end of the quarter, Real expanded its existing relationship with
Redline Real Estate Group to serve as the foundation for expansion intoBritish Columbia , bringing Real’s brokerage footprint to 44 U.S. states and theDistrict of Columbia in theU.S. andAlberta ,Ontario andBritish Columbia inCanada . -
As of
September 30, 2022 , Real’s efficiency ratio, which is calculated as full-time employees (excluding Real Title) divided by the number of agents, increased to 1:77 from 1:62 at the end of Q2 2022.
“Despite a challenging quarter for the housing market, Real continued to gain market share with strong growth in the number of agents joining our platform and the number of transactions executed, which offset effects of the broader market weakness,” said
The Company will discuss the results on a conference call and live webcast today at
Conference Call Details:
Date: |
|
|
Time: |
|
|
|
|
|
Dial-in Number: |
|
North American Toll Free: 888-506-0062 |
|
|
International: 973-528-0011 |
Access Code: |
|
375759 |
Webcast: |
|
|
|
|
|
Replay Number: |
|
North American Toll Free: 877-481-4010 |
|
|
International: 919-882-2331 |
Passcode: |
|
46760 |
Webcast Replay: |
|
Participants are encouraged to dial in 5 to 10 minutes before the beginning of the conference call.
Non-IFRS Measures
This news release includes reference to “Adjusted EBITDA”, which is a non-International Financial Reporting Standards (“IFRS”) financial measure. Non-IFRS measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Adjusted EBITDA is used as an alternative to net income by removing major non-cash items such as amortization, interest, stock-based compensation, current and deferred income tax expenses and other items management considers non-operating in nature. Adjusted EBITDA has no direct comparable IFRS financial measures. The Company has used or included this non-IFRS measures solely to provide investors with added insight into Real’s financial performance. Readers are cautioned that such non-IFRS measures may not be appropriate for any other purpose. Non-IFRS measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
The following table reconciles the non-IFRS measure to the most comparable IFRS measure for the three and nine months ended
| Consolidated Statement of Financial Position | ||||||
| (In thousands) | ||||||
| UNAUDITED | ||||||
|
|
|||||
| Assets | ||||||
| Cash and cash equivalents | 21,943 |
|
29,082 |
|
||
| Restricted cash | - |
|
47 |
|
||
| Investment securities available for sale at fair value | 9,786 |
|
8,811 |
|
||
| Trade receivables | 783 |
|
254 |
|
||
| Other receivables | 74 |
|
23 |
|
||
| Prepaid expenses and deposits | 782 |
|
448 |
|
||
| Current assets | 33,368 |
|
38,665 |
|
||
| Intangible assets | 366 |
|
451 |
|
||
12,527 |
|
602 |
|
|||
| Property and equipment | 1,019 |
|
170 |
|
||
| Right-of-use assets | 46 |
|
109 |
|
||
| Non-current assets | 13,958 |
|
1,332 |
|
||
| Total assets | 47,326 |
|
39,997 |
|
||
| Liabilities | ||||||
| Accounts payable and accrued liabilities | 14,090 |
|
6,604 |
|
||
| Other payables | 11,610 |
|
3,351 |
|
||
| Lease liabilities | 63 |
|
91 |
|
||
| Current liabilities | 25,763 |
|
10,046 |
|
||
| Lease liabilities | - |
|
40 |
|
||
| Accrued stock-based compensation | 7,922 |
|
2,268 |
|
||
| Warrants outstanding | 240 |
|
639 |
|
||
| Non-current liabilities | 8,162 |
|
2,947 |
|
||
| Total liabilities | 33,925 |
|
12,993 |
|
||
| Equity (Deficit) | ||||||
| Share premium | 63,738 |
|
63,397 |
|
||
| Stock-based compensation reserve | 10,274 |
|
6,725 |
|
||
| Deficit | (43,895 |
) |
(30,127 |
) |
||
| Other Reserves | (539 |
) |
(347 |
) |
||
| Treasury Stock, at cost | (16,390 |
) |
(12,644 |
) |
||
| Equity (Deficit) attributable to Owners | 13,188 |
|
27,004 |
|
||
| Non-controlling interests | 213 |
|
- |
|
||
| Total liabilities and equity | 47,326 |
|
39,997 |
|
||
| Consolidated Statement of Loss and Comprehensive Loss | ||||||||||||
| (In thousands) | ||||||||||||
| UNAUDITED | ||||||||||||
| Three months ended |
Nine months ended |
|||||||||||
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|||||
| Revenue | 111,633 |
|
38,798 |
|
285,638 |
|
71,202 |
|
||||
| Cost of sales | 103,057 |
|
35,477 |
|
261,908 |
|
64,216 |
|
||||
| Gross profit | 8,576 |
|
3,321 |
|
23,730 |
|
6,986 |
|
||||
| General & Administrative expenses | 5,544 |
|
2,043 |
|
17,034 |
|
7,195 |
|
||||
| Marketing expenses | 6,197 |
|
2,154 |
|
15,613 |
|
4,018 |
|
||||
| Research and development expenses | 1,146 |
|
145 |
|
3,865 |
|
3,297 |
|
||||
| Operating loss | (4,311 |
) |
(1,021 |
) |
(12,782 |
) |
(7,524 |
) |
||||
| Other income | (231 |
) |
- |
|
(667 |
) |
- |
|
||||
| Listing expenses | 135 |
|
- |
|
135 |
|
- |
|
||||
| Finance expenses, net | 954 |
|
43 |
|
1,326 |
|
311 |
|
||||
| Net Loss | (5,169 |
) |
(1,064 |
) |
(13,576 |
) |
(7,835 |
) |
||||
| Non-controlling interest | 78 |
|
- |
|
192 |
|
- |
|
||||
| Net Loss Attributable to Owners of the Parent | (5,247 |
) |
(1,064 |
) |
(13,768 |
) |
(7,835 |
) |
||||
| Other comprehensive income/(loss): | ||||||||||||
| Unrealized losses on available for sale investment portfolio | (142 |
) |
- |
|
(535 |
) |
- |
|
||||
| Foreign currency translation adjustment | (51 |
) |
- |
|
343 |
|
- |
|
||||
| Comprehensive Loss Attributable to Owners of the Company | (5,440 |
) |
(1,064 |
) |
(13,960 |
) |
(7,835 |
) |
||||
| Comprehensive Income Attributable to NCI | 78 |
|
- |
|
192 |
|
- |
|
||||
| Comprehensive Loss | (5,362 |
) |
(1,064 |
) |
(13,768 |
) |
(7,835 |
) |
||||
| Loss per Share | ||||||||||||
| Basic and diluted loss per share | (0.03 |
) |
(0.01 |
) |
(0.08 |
) |
(0.05 |
) |
||||
| Weighted-average shares, basic and diluted | 179,466 |
|
165,700 |
|
179,320 |
|
165,700 |
|
||||
| Non-GAAP Net Income (loss) to Adjusted EBITDA Reconciliation | ||||||||||||
| (In thousands) | ||||||||||||
| UNAUDITED | ||||||||||||
| Three months ended |
Nine months ended |
|||||||||||
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|||||
| Net Income (loss) | (5,440 |
) |
(1,064 |
) |
(13,960 |
) |
(7,835 |
) |
||||
| Non operating expenses | ||||||||||||
| Finance expenses, net | 1,174 |
|
43 |
|
2,053 |
|
311 |
|
||||
| Depreciation | 87 |
|
44 |
|
225 |
|
130 |
|
||||
| Stock-based compensation | 2,057 |
|
(80 |
) |
5,288 |
|
4,713 |
|
||||
| Listing expenses | 135 |
|
310 |
|
135 |
|
455 |
|
||||
| Restructuring expenses | 62 |
|
3 |
|
62 |
|
63 |
|
||||
| Extraordinary expenses | 25 |
|
- |
|
306 |
|
- |
|
||||
| Adjusted EBITDA | (1,900 |
) |
(744 |
) |
(5,891 |
) |
(2,163 |
) |
||||
| Consolidated Statement of Cash Flows | ||||||||||||
| (In thousands) | ||||||||||||
| UNAUDITED | ||||||||||||
| Three months ended |
Nine months ended |
|||||||||||
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|||||
| Cash flows from operating activities | ||||||||||||
| Loss for the period | (5,169 |
) |
(1,064 |
) |
(13,576 |
) |
(7,835 |
) |
||||
| Adjustments for: | ||||||||||||
| – Depreciation | 87 |
|
42 |
|
225 |
|
129 |
|
||||
| – Equity-settled share-based payment transactions | 1,113 |
|
(1,696 |
) |
2,324 |
|
2,920 |
|
||||
| – Listing expenses | - |
|
(36 |
) |
- |
|
(3 |
) |
||||
| – Gain on short term investments | 10 |
|
- |
|
(125 |
) |
- |
|
||||
| – Finance costs (income), net | 28 |
|
43 |
|
237 |
|
311 |
|
||||
(3,931 |
) |
(2,711 |
) |
(10,915 |
) |
(4,478 |
) |
|||||
| Changes in: | ||||||||||||
| – Restricted Cash | - |
|
- |
|
47 |
|
- |
|
||||
| – Trade receivables | (543 |
) |
(66 |
) |
(529 |
) |
(158 |
) |
||||
| – Other receivables | (8 |
) |
- |
|
(51 |
) |
198 |
|
||||
| – Prepaid expenses and deposits | 517 |
|
(385 |
) |
(334 |
) |
(471 |
) |
||||
| – Accounts payable and accrued liabilities | 1,966 |
|
2,711 |
|
7,486 |
|
5,140 |
|
||||
| – Stock Compensation Payable (RSU) | 1,603 |
|
757 |
|
5,654 |
|
1,069 |
|
||||
| – Other payables | (3,493 |
) |
728 |
|
8,259 |
|
984 |
|
||||
| Net cash provided by (used in) operating activities | (3,888 |
) |
1,034 |
|
9,618 |
|
2,284 |
|
||||
| Cash flows from investing activity | ||||||||||||
| Purchase of property and equipment | (302 |
) |
(22 |
) |
(927 |
) |
(65 |
) |
||||
| Acquisition of subsidiary | - |
|
- |
|
(7,445 |
) |
(1,100 |
) |
||||
| Net cash provided by (used in) investing activity | (302 |
) |
(22 |
) |
(8,372 |
) |
(1,165 |
) |
||||
| Cash flows from financing activities | ||||||||||||
| Investment in securities | (5,422 |
) |
- |
|
(1,432 |
) |
(8,890 |
) |
||||
| Proceeds from exercise of Warrants | - |
|
- |
|
- |
|
26,475 |
|
||||
| Purchases of Common Shares for Restricted Share Unit (RSU) Plan | (1,219 |
) |
(2,853 |
) |
(6,911 |
) |
(3,772 |
) |
||||
| Proceeds from exercise of stock options | 26 |
|
37 |
|
73 |
|
47 |
|
||||
| Payment of lease liabilities | (23 |
) |
(21 |
) |
(68 |
) |
(62 |
) |
||||
| Cash distribution for non-controlling interest | (24 |
) |
- |
|
(67 |
) |
- |
|
||||
| Net cash provided by financing activities | (6,662 |
) |
(2,837 |
) |
(8,405 |
) |
13,798 |
|
||||
| Net change in cash and cash equivalents | (10,852 |
) |
(1,825 |
) |
(7,157 |
) |
14,917 |
|
||||
| Cash, beginning of period | 32,520 |
|
37,951 |
|
29,082 |
|
21,226 |
|
||||
| Fluctuations in foreign currency | 275 |
|
(49 |
) |
20 |
|
(66 |
) |
||||
| Cash, end of period | 21,943 |
|
36,077 |
|
21,943 |
|
36,077 |
|
||||
| Supplemental disclosure of non-cash activities | ||||||||||||
| Cash grants payable as part of Expetitle acquisition | - |
|
- |
|
75 |
|
- |
|
||||
| Share-based compensation as part of Expetitle acquisition | - |
|
- |
|
4,325 |
|
- |
|
||||
| Release of vested common shares from benefits trust | 2,107 |
|
- |
|
3,433 |
|
- |
|
||||
Forward-Looking Information
This press release contains forward-looking information within the meaning of applicable Canadian securities laws. Forward-looking information is often, but not always, identified by the use of words such as “seek”, “anticipate”, “believe”, “plan”, “estimate”, “expect”, “likely” and “intend” and statements that an event or result “may”, “will”, “should”, “could” or “might” occur or be achieved and other similar expressions. These statements reflect management’s current beliefs and are based on information currently available to management as at the date hereof. Forward-looking information in this press release includes, without limiting the foregoing, expectations regarding Real’s growth and the business and strategic plans of the Company.
Forward-looking information is based on assumptions that may prove to be incorrect, including but not limited to Real’s business objectives, expected growth, results of operations, performance, business projects and opportunities and financial results. Real considers these assumptions to be reasonable in the circumstances. However, forward-looking information is subject to known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those expressed or implied in the forward-looking information. These factors should be carefully considered and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, Real cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this press release, and Real assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.
About Real
View source version on businesswire.com: https://www.businesswire.com/news/home/20221110005037/en/
For additional information, please contact:
Vice President, Capital Markets & Investor Relations
investors@therealbrokerage.com
908.280.2515
For media inquiries, please contact:
Director, Communications
elisabeth@therealbrokerage.com
201.564.4221
Source:
