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The Real Brokerage Inc. Announces Third Quarter 2021 Financial Results

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  • REAX

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

Cision
Cision

View original content:https://www.prnewswire.com/news-releases/the-real-brokerage-inc-announces-third-quarter-2021-financial-results-301424846.html

SOURCE The Real Brokerage Inc.