reAlpha Tech (AIRE 11.50%), a real estate technology company focused on AI-driven mortgage and property services, posted its fiscal second quarter 2025 earnings on August 14, 2025. Driven by rapid scaling of its real estate and mortgage services, however, the company’s net loss deepened to $4.1 million, or $(0.08) per share (GAAP), which missed the anticipated $(0.05) GAAP loss. While top-line growth was exceptionally strong, gross margin declined from 71% to 50% year-over-year (GAAP), and cash reserves (GAAP) were $0.6 million, raising questions about sustainability. The quarter was marked by expansion into new markets, new product launches in artificial intelligence, and changes in leadership. Overall, it was a pivotal period for reAlpha, with rapid growth but mounting financial pressures.
| Metric | Q2 2025 | Q2 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $(0.08) | $(0.05) | $(0.03) | (166.7%) |
| Revenue (GAAP) | $1.25 million | $1.20 million | $0.06 million | 1,909% |
| Gross Profit | $0.62 million | $0.04 million | 1,310% | |
| Adjusted EBITDA | $(3.47 million) | $(1.15 million) | (202.9%) | |
| Cash (end of period) | $0.59 million | $3.70 million | (84.1%) |
Source: Analyst estimates for the quarter provided by FactSet.
Inside reAlpha Tech: Business Overview and Key Focus Areas
reAlpha Tech operates at the intersection of real estate and technology, using artificial intelligence to support mortgage brokerage, property acquisition, and rental investment. Its main business segments are platform services, which include AI-based products, and the rental business, which focuses on acquiring and syndicating properties. The company aims to reshape how real estate transactions are sourced, managed, and financed through automation and digital tools.
Recently, reAlpha has concentrated on developing AI-driven workflow automation. Notably, it launched products like its AI Loan Officer Assistant, designed to improve internal efficiency in processing mortgage applications. Other core areas include expanding the customer base across new geographic markets and managing strong brand identity to stand out in a crowded proptech field.
Quarter in Review: Highlights and Notable Developments
The standout development was reAlpha’s dramatic year-over-year revenue surge, with GAAP revenue increasing 1,909% to $1,252,381 in Q2 2025 from $62,353 in Q2 2024. Platform and mortgage services scaled quickly, pushing GAAP revenue above $1.2 million, a leap from $62,353 in revenue (GAAP) in Q2 2024. This beat the analyst forecast for GAAP revenue. The growth was achieved as reAlpha expanded its market presence, launching operations in Texas and Utah. Additionally, the company integrated its Naamche subsidiary, which was intended to improve efficiency and coordination across teams. These steps advanced reAlpha’s goal of evolving into a national player in AI-powered real estate services.
At the same time, profitability trends moved in the opposite direction. Operating expenses (GAAP) ballooned to $4.7 million, up nearly fourfold from the prior year, with particularly sharp rises in marketing and advertising (GAAP; $1.48 million, up from $0.13 million in Q2 2024), as well as legal and professional fees and wages. Gross margin shrank to 50% from 71% (GAAP), compared to Q2 2024. According to management, this margin compression reflected higher costs associated with delivering loan brokerage and technology solutions. Net loss (GAAP) increased significantly year over year, with adjusted EBITDA (non-GAAP) also deteriorating, with a loss of $3.47 million.
Product development played a key role this quarter. The newly introduced AI Loan Officer Assistant, which is a workflow automation and process management tool for mortgage origination, produced early results. Internal data showed an approximately 60% reduction in manual document preparation time based on early internal performance metrics and a 20% decrease in processing time per loan, based on early internal performance metrics. While these metrics were not externally validated, they suggest potential for substantial efficiency gains. The company also launched its “Claire” AI platform, although product adoption outside of the company was not quantified in the release. A fully integrated customer relationship management (CRM) system was also implemented to automate lead management and increase productivity across the mortgage and real estate businesses.
The company made several leadership changes aimed at supporting its aggressive expansion. A new Chief Executive Officer and Chief Marketing Officer were appointed, with added emphasis on mortgage business leadership. The company continued the rollout of its reAlpha Mortgage brand, following a rebranding effort and website redesign, but the early repayment of a $5.45 million secured note—which carried a 9% penalty—simplified the capital structure.
Financial Health and Outlook
Liquidity became a focal point with cash (GAAP) ending the quarter at just under $0.6 million, down from $3.7 million in Q2 2024 and $3.1 million at December 2024. Operating cash burn also increased, with net cash used in operations (GAAP) for the first six months of 2025 totaling $4.60 million, compared to $2.55 million in the same period of 2024, leading to a stockholders’ deficit of $1.1 million at quarter-end.
In its statement, management did not provide numeric guidance for upcoming quarters or the rest of fiscal 2025. Leadership instead noted a continued focus on balancing growth with spending, and on executing their plan to commercialize AI-driven infrastructure for the business’s next stage. With the acceleration of investment and expansion, investors will be watching closely for updates on the actual monetization of new AI products, margin performance, and plans to strengthen liquidity.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
