Amid mounting legal distractions and less-than-savory market conditions, Real Brokerage boasted a second-quarter performance worth remembering.
The fast-growing digital brokerage posted strong second-quarter results on Thursday. Company executives touted that the company had finally recorded a positive net income in Q2.
“I am particularly proud of our performance this quarter, which should stand as powerful proof that our model works,” said Real CEO Tamir Poleg during a Thursday morning earnings call. “It’s generating substantial cash flow and now profitability, even in the most challenging market environment seen in decades.”
Real reported a 59% increase in revenue, raking in $540 million in revenue for the quarter, with $20.1 billion closed transactions, up a similar 60% from a year ago. The company also posted a net income of $1.5 million, compared to a net loss of $1.1 million in Q2 of 2024.
Adjusted EBITDA improved by 40% in the quarter, climbing to $20 million from $14 million during the same period last year.
Gross profit reached $47.9 million in the second quarter, up 50% from $31.9 million in the second quarter of 2024.
Operating expenses totaled $46.2 million compared to $32.5 million in the same period last year.
“We believe this should provide confidence in our future, knowing that we are still in the early innings of transforming this industry,” Poleg added.
That confidence seemed unwavering, even as the company is in the crosshairs of two major legal battles: a copycat buy-side commission lawsuit and a gender and pregnancy discrimination suit filed by the former chief financial officer, Michelle Ressler.
Ressler’s lawsuit alleges that Poleg and others at the company “executed a steady campaign to sideline and ultimately oust” her, leading up to, during, and after her pregnancy.
In the suit, she also hinted that her firing could have been linked to her calling attention to broader operational issues within the company and challenging Real’s “questionable and potentially unlawful conduct,” specifically claiming other executives played fast and loose with personal expenses and launched unstable, unfinished products.
Real claimed that Ressler was fired “based on the company’s opinion that she engaged in actions that violated company policies.” In her lawsuit, Ressler said that she was told the firing was due to $17,000 in expenses charged to a company credit card that were mostly for business purposes.
The tech-focused brokerage is also faced with a copycat buyer-side commission lawsuit alleging that Real and several other brokerages “adopted and implemented anticompetitive practices that harmed consumers and homebuyers” and inflated home prices.
According to Ressler’s successor, Chief Financial Officer Ravi Jani, the company’s remarkable topline growth was primarily driven by a brokerage segment, which saw a 62% increase in the number of transactions closed, hitting 49,282 this quarter compared to 30,367 at the same time last year.
Revenue from its ancillary businesses totaled $3.3 million during the second quarter and increased 50% year over year, led by One Real Mortgage and supplemented by One Real Title and Real Wallet, the company stated.
Executives said its Real Wallet financial tech platform generated approximately $250,000 in the second quarter. Real Wallet functions primarily as “a debit account that’s seamlessly tied to (agent’s) commission income and revenue share,” with the ability to receive pending commission payments sooner than a traditional bank.
Real touted recent updates to the platform as many of its agents have adopted the fintech tool. The company announced that more than 3,600 agents use Real Wallet checking accounts, while 850 use its Tax Planning business checking accounts.
Ressler, in her lawsuit, claimed that at launch, Real Wallet “did not comply with the underlying legal agreements,” without offering specifics, adding that these and other issues “exposed (Real) to operational and regulatory risk.”
“Real Wallet continues to demonstrate strong progress across both product development and adoption,” Poleg said.
The market picture
At a time when market conditions may be driving agents to step back from the market, Real executives touted the success of the company’s recruitment pipeline, which added roughly another 1,200 agents to its platform in the second quarter.
This, according to Poleg, came despite Real off-boarding more than 1,500 agents who had either not renewed their licenses or not paid mandatory association dues.
“The outcome of this is clear in our performance metrics, where we saw transactions per average agent increased by 7% year over year,” Poleg touted.
The number of agents surged by 43% year over year. Real tallied 28,054 agents at the end of the quarter—up 43% year over year—but also noted that the company had 29,200 agents on the platform as of August 5.
“This sustained growth underscores the compelling strength of our value proposition,” Poleg said. “Our revenue churn, which remains a key indicator of our ability to retain our most productive agents, held firm at what we believe represents the best in class, 2% in the quarter.”
Real’s Chief Operating Officer, Jenna Rozenblat, attributed the continued growth of agent count to the company’s investment in streamlining and enhancing agent-facing Leo Co-pilot AI assistant, which has become the first point of contact for agent support.
“This means when agents use the reason asked to call our support line, Leo steps in first, providing immediate answers to their questions,” she said. “Because of this, Leo reduced the number of calls received by our human support team by 28% during the second quarter.
Notably, Real had Leo sub in for Poleg for part of its last earnings call.
Poleg reaffirmed Real’s focus on simplifying the homebuying process for agents and consumers alike. That has been evident in the company’s investment and enhancement of AI and proptech offerings for both parties.
In the near term, he said that includes rolling out Real’s consumer-facing product to streamline the client experience and enhance the attachment of ancillary services.
“Long term, we envision our platform encompassing a holistic ecosystem of real estate services and financial technology products, providing agents with avenues to build long-term wealth,” Poleg said.
Towards that end, the digital brokerage has stayed busy on the acquisition front, after announcing its purchase of Flyhomes’ AI-powered consumer home search portal and related technology assets in July.
The Flyhomes platform, which features deep MLS integrations, real-time market insights, and a user-friendly interface, will be integrated into Real’s anticipated consumer-facing product, Leo for Clients.
“We believe this is a major step towards delivering an end-to-end AI-driven home buying experience,” Poleg said.
