The Real Brokerage Inc. Announces Third Quarter 2021 Financial Results

Rhea-AI Summary

The Real Brokerage Inc. (REAX) reported remarkable 885% year-over-year revenue growth in Q3 2021, reaching $39 million, up from $3.9 million in Q3 2020. Gross profit surged 348% to $3.32 million. However, the net operating loss was $1.06 million, compared to $422 thousand a year earlier. Cash flow from operations increased by 581% to $1.03 million. The company also experienced a 132% growth in agents, totaling 2,975 by the end of Q3 2021. Real aims to compete more broadly by expanding its technology offerings.

Positive

• 885% year-over-year revenue growth to $39 million
• 348% increase in gross profit to $3.32 million
• 581% increase in cash flow from operations to $1.03 million
• 132% growth in agents to 2,975
• Revenue per agent increased by 325% to $13,000

Negative

• Net operating loss of $1.06 million, up from $422 thousand
• Adjusted EBITDA loss of $744 thousand, compared to $261 thousand loss previously

Achieves 885% year over year revenue growth in Q3 2021 to US $39 million

132% agent growth to 2,975 agents at the end of Q3 2021

TORONTO and NEW YORK, Nov. 16, 2021 /PRNewswire/ -- The Real Brokerage Inc. ("Real" or the "Company") (TSXV: REAX) (NASDAQ: REAX), an international, technology-powered real estate brokerage, is pleased to announce that it has filed its financial results for the three and nine months ended September 30, 2021.

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

Q3 Financial Highlights (unaudited) (US dollars)

• Revenue increased 885% in the third quarter of 2021 to $38.79 million, compared to $3.9 million in the third quarter of 2020.
• Gross profit grew 348% to $3.32 million in the third quarter of 2021, compared to $741 thousand in the third quarter of 2020.
• Net operating loss was $1.06 million in the third quarter of 2021, compared to a net loss of $422 thousand in the third quarter of 2020.
• Adjusted EBITDA loss for the third quarter or 2021 was $744 thousand compared to Adjusted EBITDA loss of $261 thousand in the third quarter of 2020.
• Cash flow from operations increased approximately 581% to $1.03 million compared to the third quarter of 2020.

"Our third-quarter run-rate is more than $150 million, as we continue to experience growth through the combination of increases in number of agents and revenue per agent," said Tamir Poleg, co-founder and CEO of Real. "As we build out technology not only for our agents, but for a consumer experience, we expect to be competing in the future not just with traditional and tech brokerages but to expand our total addressable market by competing with online real estate companies."

Q3 and Recent Operating Highlights (unaudited)

• Surpassed 3,000 agents October 2021, a 134% increase since October 2020.
• The value of completed real estate transactions grew 879% to $1.44 billion in Q3 2021, compared to 1.47 million in the third quarter of 2020.
• Revenue per agent grew to $13 thousand, which represents an increase of 325% compared to $3 thousand in to the third quarter of 2020.
• Transactions per agent grew to 0.9 which represents an increase of 86% compared to 0.5 in the third quarter of 2020.
• Bolstered its management team with the additions of Katharine Mobley as Chief Marketing Officer and Raj Naik as Chief Operating Officer
• As of September 30, 2021, Real offered real estate brokerage services in 35 U.S. states the District of Columbia in the US and Alberta, Canada and had 50 full-time employees.
• As of September 30, 2021, Real's efficiency ratio (Full Time Employees : Agents) was 1:60, with a long term target of 1:75 . Real views this as a competitive advantage as the industry standard is a ratio of approximately 1:25.
• Real ended Q3 2021 with $45 million in cash and investments compared to total cash on hand of $1.9 million at the end of Q3 2020.

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

Date:	November 16, 2021
Time:	11:00 a.m. EST*
Dial-in Number:	North American Toll Free: 888-506-0062
	International: 973-528-0011
	https://www.webcaster4.com/Webcast/Page/2699/43422
Replay Number:	North American Toll Free: 877-481-4010
	International: 919-882-2331
Passcode:	42380
Webcast Replay	https://www.webcaster4.com/Webcast/Page/2699/43422
	*Participants are encouraged to dial in 5 to 10 minutes before the beginning of the conference call.

About Real

Real (www.joinreal.com) is a technology-powered real estate brokerage operating in 37 U.S. states, the District of Columbia and Canada. Real is building the future, together with more than 3,000 agents and their clients. Real creates financial opportunities for agents through better commission splits, best-in-class technology, revenue sharing and equity incentives.

Contact Information

For additional information, please contact:

The Real Brokerage Inc.
Caroline Glennon
caroline@thunder11.com  
1-201-564-4221

Investors, for more information, please contact:
Hayden IR
James Carbonara
james@haydenir.com 
646-755-7412

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.

 

The Real Brokerage Inc
Consolidated Statement of Financial Position
(unaudited)
				September 30, 2021	December 31, 2020
Assets
Cash				36,077	21,226
Restricted cash				47	47
Investment securities available for sale at fair value				8,893	-
Trade receivables				275	117
Other receivables				23	221
Prepaid expenses and deposits				560	89
Current assets				45,875	21,700
Intangible assets				1,107	-
Property and equipment				71	14
Right-of-use assets				130	193
Non-current assets				1,308	207
Total assets				47,183	21,907
Liabilities
Accounts payable and accrued liabilities				5,955	815
Other payables				1,048	64
Lease liabilities				82	85
Current liabilities				7,085	964
Lease liabilities				71	130
Accrued Stock-based Compensation				1,084	15
Warrants outstanding				310	-
Non-current liabilities				1,465	145
Total liabilities				8,550	1,109
Equity (Deficit)
Share premium				59,236	21,668
Stock-based compensation reserve				5,680	2,760
Deficit				(26,283)	(18,448)
Equity (Deficit) attributable to owners of the company				38,633	5,980
Non-controlling interests				-	14,818
Total liabilities and equity				47,183	21,907

 

 

The Real Brokerage Inc
Consolidated Statement of Loss and Comprehensive Loss
(unaudited)
	Three months ended September 30,		Nine months ended September 30,
	2021	2020	2021	2020
Revenue	38,798	3,939	71,202	9,469
Cost of sales	35,477	3,198	64,216	8,063
Gross profit	3,321	741	6,986	1,406
General & Administrative expenses	2,170	988	10,051	2,254
Marketing expenses	1,675	88	3,060	449
Research and development expenses	497	75	1,399	147
Other income	-	-	-	(1)
Operating loss	(1,021)	(410)	(7,524)	(1,443)
Listing expenses	-	-	-	803
Finance costs	43	12	311	29
Loss before tax	(1,064)	(422)	(7,835)	(2,275)
Net Loss	(1,064)	(422)	(7,835)	(2,275)
Total loss and comprehensive loss	(1,064)	(422)	(7,835)	(2,275)
Earnings per share
Basic and diluted loss per share	(0.006)	(0.013)	(0.05)	(0.026)

 

 

The Real Brokerage Inc
Non-GAAP Net Income (loss) to Adjusted EBITDA Reconciliation
(In thousands)
	Three months ended September 30,		Six months ended September 30,
	2021	2020	2021	2020
Net Income (loss)	(1,064)	(422)	(7,835)	(2,275)
Non operating expenses
Interest	43	12	311	29
Depreciation	44	10	130	59
Restructuring expense	3	-	63	-
Listing Expenses	-	-	-	459
Nasdaq listing expenses	310	-	455	-
Stock-based compensation	(80)	139	4,713	336
Adjusted EBITDA	(744)	(261)	(2,163)	(1,392)

 

 

			Three months ended September 30		Nine months ended September 30
			2021	2020	2021	2020
Cash flows from operating activities
Loss for the period			(1,064)	(422)	(7,835)	(2,275)
Adjustments for:
– Depreciation			42	17	129	66
– Equity-settled share-based payment transactions			(1,696)	139	2,920	336
– Listing expenses			(36)	-	(3)	459
– Finance costs (income), net			43	32	311	28
			(2,711)	(234)	(4,478)	(1,386)
Changes in:
--Restricted cash			-	-	-	-
– Trade receivables			(66)	(88)	(158)	(114)
– Other receivables			-	9	198	(12)
– Related parties			-	-	-	-
– Prepaid expenses and deposits			(385)	(27)	(471)	(27)
– Accounts payable and accrued liabilities			2,711	105	5,140	705
– Stock Compensation Payable (RSU)			757	-	1,069	-
– Other payables			728	20	984	18
Net cash provided by (used in) operating activities			1,034	(215)	2,284	(818)
Cash flows from investing activity
Investments in securities			-	-	(8,890)	-
Change in restricted cash			-	-	-	-
Purchase of property and equipment			(22)	(7)	(65)	(7)
Acquisition of subsidiaries consolidated for the first time (a)*			-	-	(1,100)	-
Net cash  provided by (used in) investing activity			(14)	(7)	(10,047)	(7)
Cash flows from financing activities
Proceeds from private placement			-	443	-	2,031
Additional proceeds from Qualifying Transaction			-	-	-	321
Proceeds from exercise of Warrants			-	-	26,475	-
Proceeds from issuance of convertible debt			-	-	-	250
Proceeds from loans and borrowings			-	-	-	172
Purchases of Common Shares for Restricted Share Unit (RSU) Plan			(2,853)	-	(3,772)	-
Proceeds from exercise of stock options			37	-	47	-
Payment of lease liabilities			(21)	(31)	(62)	(64)
Net cash provided by financing activities			(2,837)	412	22,688	2,710
Net change in cash and cash equivalents			(1,817)	190	14,925	1,885
Cash, beginning of period			37,951	1,748	21,226	53
Fluctuations in foreign currency			(49)	(2)	(66)	(2)
Cash, end of period			36,077	1,936	36,077	1,936

 

 

 

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SOURCE The Real Brokerage Inc.

FAQ

What were the Q3 2021 revenue figures for Real Brokerage (REAX)?

Real Brokerage reported Q3 2021 revenue of $39 million, representing an 885% increase year-over-year.

How many agents did Real Brokerage have by the end of Q3 2021?

As of the end of Q3 2021, Real Brokerage had 2,975 agents, a growth of 132%.

What was the net operating loss for Real Brokerage in Q3 2021?

The net operating loss for Q3 2021 was $1.06 million.

What is the cash flow from operations for Real Brokerage in Q3 2021?

The cash flow from operations increased to $1.03 million in Q3 2021, up by approximately 581%.

What are the revenue per agent statistics for Real Brokerage in Q3 2021?

Revenue per agent increased to $13,000 in Q3 2021, a 325% rise compared to the same quarter last year.