The Real Brokerage (REAX) investor relations material

Business performance and growth

• Achieved rapid agent and revenue growth despite a challenging housing market, with agent count rising from 10,000 to over 34,000 and revenue increasing from $400 million to $2 billion in the last year.

• Adjusted EBITDA improved from negative $1 million in 2023 to $70 million, reflecting operational efficiency and focus on productive agents.

• Proprietary technology platform and attractive commission splits (85/15 with a $12,000 cap) drive agent recruitment and retention.

• AI assistant Leo answers 100,000 agent questions quarterly, significantly reducing support costs and boosting efficiency.

• Gross margins on brokerage are 8-9%, with higher margins in ancillary services like title (80%) and mortgage (50%).

Acquisition of RE/MAX and strategic rationale

• Announced acquisition of RE/MAX for $880 million, aiming to combine Real's technology and growth with RE/MAX's global brand and scale.

• RE/MAX has 145,000 agents in 120 countries, but has faced agent attrition due to a technology gap and diminishing value proposition.

• Integration will bring Real's tech stack to RE/MAX, targeting operational synergies and revitalized agent growth.

• Combined company projected to have $2.3 billion in revenue, $157 million in adjusted EBITDA, and over 180,000 agents globally.

• Real and RE/MAX will operate as separate brands but share technology and services, offering agents flexibility in choosing their preferred model.

Monetization and synergy opportunities

• Significant upside in increasing attach rates for mortgage (currently 1%) and title (currently 3.5%) services, with each 1% attach rate on RE/MAX transactions translating to $25 million (mortgage) and $10 million (title) in high-margin revenue.

• RE/MAX websites generate 1 million buyer leads annually; each 1% conversion could yield $30 million in nearly 100% margin revenue.

• Initial cost synergies estimated at $30 million, with potential for more as integration progresses.

• Real Wallet fintech platform to be offered to RE/MAX agents, expanding banking and payment services.

• Combined revenue mix will be healthier, blending Real's commission-driven income with RE/MAX's recurring franchise revenue.