The Real Brokerage Inc. Announces Second Quarter 2021 Financial Results

Rhea-AI Summary

The Real Brokerage achieved a remarkable 790% revenue growth in Q2 2021, reaching $23 million, up from $2.5 million in Q2 2020. The gross profit surged 764% to $2.4 million, while the net operating loss increased to $2.9 million from a loss of $1.2 million year-over-year. The number of agents grew 126% to 2,451, and revenue per agent rose 362% to $1.5 thousand. With a strong cash position of $37.9 million, the company anticipates continued growth fueled by its expanding agent base.

Positive

• 790% year-over-year revenue growth to $23 million.
• 764% increase in gross profit to $2.4 million.
• 126% growth in agent count to 2,451.
• Revenue per agent increased by 362% to $1.5 thousand.
• Strong cash balance of $37.9 million.

Negative

• Net operating loss increased to $2.9 million from $1.2 million.
• Adjusted EBITDA loss reduced but still a loss of $496 thousand.

Achieves 790% year over year revenue growth in Q2 2021 to US $23 million

126% agent growth to 2,451 agents at the end of Q2 2021

NEW YORK and TORONTO, Aug. 11, 2021 /PRNewswire/ -- The Real Brokerage Inc. ("Real" or the "Company") (TSXV: REAX) (Nasdaq: REAX), a national, technology powered real estate brokerage in the United States is pleased to announce that it has filed its financial results for the three and six months ended June 30, 2021.

Additional information concerning Real's consolidated financial statements and related management's discussion and analysis for the three and six months ended June 30, 2021 can be found at www.sedar.com.

Q2 Financial Highlights (unaudited) (US dollars)

• Revenue increased 790% in the second quarter of 2021 to $23 million, compared to $2.5 million in Q2 last year.
• Gross profit grew 764% to $2.4 million in the second quarter of 2021, compared to $281,000 in Q2 2020.
• Net operating loss was $2.9 million in the second quarter of 2021, compared to a net loss of $1.2 million in the second quarter of 2020.
• Adjusted EBITDA loss for the second quarter or 2021 was $496 thousand compared to Adjusted EBITDA loss of $795 thousand in the second quarter of 2020.
• Cash flow from operations increased approximately 214% to $706 thousand compared to Q2 last year.

"During the second quarter, the combination of large increases in number of agents and revenue per agent accounted for revenue growth," said Tamir Poleg, co-founder and CEO of Real. "In terms of outlook, on a monthly basis we added agents that collectively generated $20 million in trailing 12-month revenue recorded prior to joining Real. Based on these figures, we expect strong growth to continue."

Q2 and Recent Operating Highlights (unaudited)

• Surpassed 2,550 agents July 2021, a 135% increase since July 2020.
• The value of completed real estate transactions grew 853% to $906 million in Q2 2021, compared to Q2 2020.
• Revenue per agent grew to $1.5 thousand, which represents an increase of 362% compared to $326 in Q2 2021.
• As of June 30, 2021, Real offered real estate brokerage services in 31 U.S. states and the District of Columbia and had 41 full-time employees.
• As of June 30, 2021, Real's efficiency ratio (Full Time Employees : Agents) was 1:61, with a long term target of 1:75. Real views this as a competitive advantage in terms of how quickly and efficiently it can scale and provide benefit in profit margins. The industry standard is a ratio of approximately 1:25.
• On June 15, 2021, Real commenced trading its common shares on the Nasdaq Capital Market.
• On June 28, 2021, Real received C$32,845,011.20 in proceeds from accelerated warrant exercises.
• Real ended Q2 2021 with a cash balance of $37.9 million and an additional $8.9 million held in investments in securities compared to $1.7 million at the end of Q1 2020.

The Company will discuss the results on a conference call and live webcast today at 11:00 a.m. EDT.

Details of the conference call are listed below:

Date:	August 11, 2021
Time:	11:00 a.m. EST*
Dial-in Number:	North American Toll Free: 844-602-0380
	International: 862-298-0970
	Webcast:  https://www.webcaster4.com/Webcast/Page/2699/42380
Replay Number:	North American Toll Free: 877-481-4010
	International: 919-882-2331
Passcode:	42380
Webcast Replay	https://www.webcaster4.com/Webcast/Page/2699/42380
	*Participants are encouraged to dial in 5 to 10 minutes before the beginning of the conference call. The replay will be available beginning approximately 1 hour after the completion of the live event.

About Real

Real (www.joinreal.com) is a technology-powered real estate brokerage operating in 31 U.S. states and the District of Columbia. Real is building the brokerage of the future, together with agents and their clients. Real creates financial opportunities for agents through better commission splits, best-in-class technology, revenue sharing and equity incentives.

 

The Real Brokerage Inc
Consolidated Statement of Financial Position
(unaudited)
				June 31, 2021	December 31, 2020
Assets
Cash				37,904	21,226
Restricted cash				47	47
Investment securities available for sale at fair value				8,857	-
Trade receivables				209	117
Other receivables				23	221
Prepaid expenses and deposits				175	89
Current assets				47,215	21,700
Intangible assets				1,127	-
Property and equipment				57	14
Right-of-use assets				151	193
Non-current assets				1,335	207
Total assets				48,550	21,907
Liabilities
Accounts payable and accrued liabilities				3,244	815
Other payables				320	64
Lease liabilities				87	85
Current liabilities				3,651	964
Lease liabilities				87	130
Accrued Stock-based Compensation				327	15
Warrants outstanding				276	-
Non-current liabilities				690	145
Total liabilities				4,341	1,109
Equity (Deficit)
Share premium				47,234	21,668
Stock-based compensation reserve				7,376	2,760
Deficit				(25,219)	(18,448)
Equity (Deficit) attributable to owners of the company				29,391	5,980
Non-controlling interests				14,818	14,818
Total liabilities and equity				48,550	21,907

 

The Real Brokerage Inc
Consolidated Statement of Loss and Comprehensive Loss
(unaudited)
			Three months ended June 30,		Six months ended June 30,
			2021	2020	2021	2020
Revenue			23,095	2,594	32,404	5,530
Cost of sales			20,667	2,313	28,739	4,865
Gross profit			2,428	281	3,665	665
General & Administrative expenses			3,801	482	7,881	1,266
Marketing expenses			942	209	1,385	361
Research and development expenses			475	49	902	72
Other income			-	(1)	-	(1)
Operating loss			(2,790)	(458)	(6,503)	(1,033)
Finance costs			158	15	268	17
Loss before tax			(2,948)	(1,276)	(6,771)	(1,853)
Net Loss			(2,948)	(1,276)	(6,771)	(1,853)
Total loss and comprehensive loss			(2,948)	(1,276)	(6,771)	(1,853)
Earnings per share
Basic and diluted loss per share			(0.053)	(0.032)	(0.122)	(0.056)

 

The Real Brokerage Inc
Non-GAAP Net Income (loss) to Adjusted EBITDA Reconciliation
(In thousands)
			Three months ended June 30,		Six months ended June 30,
			2021	2020	2021	2020
Net Income (loss)			(2,948)	(1,276)	(6,771)	(1,853)
Non operating expenses
Interest			158	15	268	17
Depreciation			44	22	86	49
Restructuring expense			60	-	60	-
Nasdaq listing expenses			145	-	145	-
Stock-based compensation			2,045	(15)	4,793	197
Adjusted EBITDA			(496)	(1,254)	(1,419)	(1,590)

 

The Real Brokerage Inc
Consolidated Statement of Cash Flows
(unaudited)
				Three months ended June 30		Six months ended June 30
				2021	2020	2021	2020
Cash flows from operating activities
Loss for the period				(2,948)	(1,276)	(6,771)	(1,853)
Adjustments for:
– Depreciation				44	22	86	49
– Equity-settled share-based payment transactions				1,868	(15)	4,616	197
– Listing expenses				-	459	-	459
– Finance costs (income), net				158	1	268	(4)
				(878)	(809)	(1,801)	(1,152)
Changes in:
– Trade receivables				518	131	(92)	(26)
– Other receivables				1	(21)	198	(21)
– Prepaid expenses and deposits				(12)	1	(86)	-
– Accounts payable and accrued liabilities				622	73	2,429	595
– Stock Compensation Payable (RSU)				205	-	312	-
– Other payables				250	8	256	(2)
Net cash provided by (used in) operating activities				706	(617)	1,216	(606)
Cash flows from investing activity
Change in restricted cash				-	1	-	-
Purchase of property and equipment				(29)	-	(43)	-
Acquisition of subsidiaries consolidated for the first time (a)*				-	-	(1,100)	-
Net cash  provided by (used in) investing activity				(29)	1	(1,143)	-
Cash flows from financing activities
Investments in securities				(8,857)	-	(8,857)	-
Proceeds from private placement				-	1,588	-	1,588
Additional proceeds from Qualifying Transaction				-	321	-	321
Proceeds from exercise of Warrants				26,475	-	26,475	-
Proceeds from issuance of convertible debt				-	250	-	250
Proceeds from loans and borrowings				-	172	-	172
Purchases of Common Shares for Restricted Share Unit (RSU) Plan				(919)	-	(919)	-
Proceeds from exercise of stock options				10	-	10	-
Payment of lease liabilities				(21)	(18)	(41)	(33)
Net cash provided by financing activities				16,688	2,313	16,668	2,298
Net change in cash and cash equivalents				17,365	1,697	16,741	1,692
Cash, beginning of period				20,527	53	21,226	53
Fluctuations in foreign currency				59	(1)	(16)	3
Cash, end of period				37,951	1,749	37,951	1,748

 

Contact Information

For additional information, please contact: 

James Carbonara
Hayden IR
646-755-7412
james@haydenir.com

Press, for more information, please contact:
The Real Brokerage Inc.
Caroline Glennon
caroline@thunder11.com 
201-564-4221

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 measure 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.

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, statements regarding the addition of agents to Real's business, 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.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release, and the NASDAQ has neither approved nor disapproved the contents of this press release.

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SOURCE The Real Brokerage Inc.

FAQ

What are the financial results for The Real Brokerage for Q2 2021?

The Real Brokerage reported a revenue of $23 million in Q2 2021, marking a 790% growth year-over-year.

How many agents does The Real Brokerage have as of Q2 2021?

The Real Brokerage has 2,451 agents as of the end of Q2 2021, representing a 126% increase.

What is the net operating loss for The Real Brokerage in Q2 2021?

The net operating loss for Q2 2021 was $2.9 million, up from $1.2 million in Q2 2020.

What is the revenue per agent for The Real Brokerage in Q2 2021?

Revenue per agent increased to $1.5 thousand in Q2 2021, a 362% rise compared to Q2 2020.

How much cash does The Real Brokerage have as of Q2 2021?

The Real Brokerage ended Q2 2021 with a cash balance of $37.9 million.