Logo of jester cap with thought bubble.

Image source: The Motley Fool.

DATE

Thursday, Aug. 6, 2026 at 8:00 a.m. ET

CALL PARTICIPANTS

  • Chairman and Chief Executive Officer - Tamir Poleg
  • Chief Operating Officer - Jenna Rozenblat
  • Chief Financial Officer - Ravi Jani
  • Chief Legal Officer - Alexandra Lumpkin

TAKEAWAYS

  • Revenue -- $700.6 million, increasing 30% year over year driven by higher transaction volumes.
  • Non-GAAP Adjusted EBITDA -- $27.6 million, growing 38% compared to the previous year reflecting improved core profitability.
  • Net Loss -- $8 million, including $11.6 million in acquisition-related costs associated with the pending RE/MAX transaction.
  • Agent Count -- 35,348 at quarter end, representing 26% growth year over year, with the total exceeding 36,000 as of August 2026.
  • Closed Transactions -- 62,380 sides, a 27% increase over the prior year that outpaced broader market performance.
  • Gross Profit -- $58.3 million, rising 22% from last year despite margin pressure.
  • Gross Margin -- 8.3%, declining from 8.9% in the prior year due to a higher concentration of transactions from capped agents.
  • Ancillary Segment Revenue -- $4.2 million, increasing 28% year over year across wallet, title, and mortgage services.
  • Real Wallet Revenue -- $592,000, representing 140% growth driven by expanded agent adoption of financial tools.
  • One Real Title Revenue -- $1.7 million, rising 29% from the previous year.
  • One Real Mortgage Revenue -- $1.9 million, a 10% increase year over year.
  • Capped Agent Transaction Mix -- 42% of closed sides, increasing 300 basis points from the prior year.
  • Unrestricted Cash and Investments -- $86.6 million at quarter end, up from $49.9 million at the start of the year.
  • Integration Cost Synergies -- $30 million, targeted for achievement within three years of closing the RE/MAX merger.
  • Canadian Agent Productivity -- -9%, reflecting challenging market conditions and difficult year-over-year comparisons in operating provinces.
  • US Agent Productivity -- +3%, consistent with broader residential market trends.
  • Real Wallet Deposits -- $38.4 million, held in business checking accounts by more than 10,200 agents as of August 2026.
  • Adjusted Operating Expense per Transaction -- $371, representing a 19% improvement from $459 in the prior year.
  • Title Joint Venture Attach Rate -- 45% overall, with high-performing regions reporting rates between 67% and 80%.
  • Real Wallet Credit Outstanding -- $10.8 million, including business loans and lines of credit.
  • Total Completed Transaction Value -- $26.3 billion, an increase of 31% from $20.1 billion in the prior year.
  • Mortgage Loan Officers -- 169, with 137 affiliated with the Real Originate program as of August 2026.
  • Guidance -- Management expects third quarter revenue and Adjusted EBITDA to decline sequentially from the second quarter due to normal seasonal patterns.

Need a quote from a Motley Fool analyst? Email [email protected]

RISKS

  • Jani noted that the Canadian market environment "is continuing to be a headwind," with per-agent transaction volume declining 9% during the quarter.
  • Jani stated that gross margin was lower year over year because "approximately 42% of our closed transaction sides came from capped agents," which carry lower brokerage margins for the company.

SUMMARY

Management reported that the pending RE/MAX merger represents a strategic expansion intended to combine global brand recognition with a proprietary technology stack. The company stated that organic growth continued despite the housing market remaining at trough levels, with agent recruitment accelerating following the merger announcement. The Real Brokerage Inc. (REAX +1.30%) indicated a focus on scaling ancillary services, including mortgage and title products, to drive higher-margin revenue streams and improve agent productivity through AI-enabled tools.

  • Rozenblat stated that the company "decided to invest just as aggressively in using AI to transform our own operations as we did in building AI for the agents," utilizing an in-house team to automate hundreds of internal workflows.
  • Poleg reported that the beta version of Leo 2.0, which integrates with external CRM systems, "was able to create opportunities for them with dormant leads that were lying in their CRMs for years."
  • Rozenblat indicated that success in the integration process is evaluated based on the effectiveness of platform strengthening and cultural preservation rather than implementation speed.
  • Poleg noted that the RE/MAX transaction announcement "gave us some tailwinds in terms of agents reaching out and contemplating joining Real," contributing to a record pipeline.
  • Poleg indicated momentum in the Real Originate program, stating that "some of our best agents" are opting into the mortgage platform to increase ancillary attach rates.
  • Jani reported that September fee model changes are expected to support gross profit margins as they carry through into the fourth quarter of the year.

INDUSTRY GLOSSARY

  • Capped Agent: An agent who has met a specific annual commission threshold, after which they retain a higher percentage of their commission, resulting in lower margins for the brokerage.
  • CRM: Customer Relationship Management software used by real estate professionals to manage client leads and interactions.
  • MLS: Multiple Listing Service, a database used by real estate professionals to share property listing information and cooperate on transactions.
  • reZEN: The proprietary technology platform used by Real agents to manage transactions, compliance, and accounting.
  • Real Wallet: A financial technology platform providing agents with business checking accounts, debit cards, and lending products.
  • Real Originate: A mortgage program allowing agents to participate in the mortgage process through affiliated services.

Full Conference Call Transcript

Operator: Good morning, ladies and gentlemen, and welcome to The Real Brokerage Earnings Call for the Second Quarter ended June 30, 2026. [Operator Instructions] I will now turn the call over to Alix Lumpkin, Chief Legal Officer at The Real Brokerage. Ma'am, the floor is yours.

Alexandra Lumpkin: Thanks, and good morning. Thank you for standing by, and welcome to The Real Brokerage conference call and webcast for the second quarter ended June 30, 2026. We appreciate everyone for joining us today. With me on the call today are Tamir Poleg, our Chairman and Chief Executive Officer; Jenna Rozenblat, our Chief Operating Officer; and Ravi Jani, our Chief Financial Officer. This morning, Real published an earnings press release, including results for the second quarter ended June 30, 2026. The press release, along with the consolidated financial statements and related management's discussion and analysis for the quarter have been filed with the U.S. Securities and Exchange Commission on EDGAR and with Canadian securities regulators on SEDAR+.

Before we get started, I'd like to remind everyone that statements made on this conference call that are not historical facts, including statements about future time periods, may be deemed to constitute forward-looking statements. Our actual results may differ materially from these forward-looking statements and the risk factors that could cause these differences are detailed in our Canadian continuous disclosure documents, including our management discussion and analysis for the period ended June 30, 2026, our annual information form for the fiscal year ended December 31, 2025, and our management information circular dated July 9, 2026, as well as our SEC reports and the S-4 registration statement filed in connection with the RE/MAX transaction.

Real disclaims any intent or obligation to update these forward-looking statements, except as expressly required by law. With that, I'd like to turn the call over to Chairman and Chief Executive Officer, Tamir Poleg. Tamir, please proceed.

Tamir Poleg: Thank you, Alix, and good morning, everyone. Real is a real estate technology company built to improve how real estate works for the professionals at the center of a transaction and ultimately, for the buyers and sellers they serve. We attract productive real estate professionals with a differentiated value proposition, help them build stronger businesses through superior technology and support and expand the products and services available to them and their clients over time. When we do these things well and operate with financial discipline, we create durable value for agents, consumers and shareholders alike.

I want to frame today's call a little differently than usual as this could be the last time we report to you as a stand-alone Real. Our security holder vote on the RE/MAX transaction is scheduled for August 14. Assuming approval by both Real security holders and RE/MAX's shareholders and satisfaction of the remaining closing conditions, we expect to complete the transaction thereafter in the second half of 2026. The headline for the quarter is straightforward. Despite one of the most challenging housing markets in years, we again delivered significant growth, improved core profitability and further strengthened our balance sheet. Revenue increased 30% to more than $700 million. Adjusted EBITDA increased 38% to $27.6 million.

We ended the quarter with record cash and short-term investments of $86.6 million. Those results reinforce something we've believed for a long time. When we consistently help great real estate professionals build better businesses, we can deliver differentiated growth, improve profitability and create long-term value. That's why we believe the RE/MAX transaction is such an important step in our evolution. RE/MAX brings an iconic global brand, highly productive agents and franchise owners with deep local market expertise. Real brings a modern AI-enabled technology platform, a differentiated economic model and a track record of innovation and disciplined execution.

Together, we believe we can better support real estate professionals, improve the experience for buyers and sellers and build a stronger, more profitable company for the long term. Jenna will discuss the momentum in our operating results and integration progress. Ravi will then discuss our financials in more detail before I return with a few closing remarks. With that, I'll hand it over to Jenna.

Jenna Rozenblat: Thanks, Tamir, and good morning. We ended the second quarter with approximately 35,350 agents, up 26% year-over-year and entered the second half with a strong pipeline. In fact, as of today, our agent count has already exceeded 36,000. Even in a difficult market environment, we continue to experience organic growth from entrepreneurial agents, teams and independent brokerages looking for better technology, better economics and a platform that helps them run their businesses more efficiently and more profitably. We also continue to make progress rolling out new technology that can meaningfully change how agents operate and how they serve their clients.

As an example, HeyLeo, our AI relationship management platform for agents, continues to evolve to enhance both the agent and client experience. This includes several new features that Leo 2.0 has beta-launched in recent weeks, including direct integrations with some of the largest real estate CRMs in the industry. As a result, with the help of Leo, our agents can now seamlessly leverage agentic AI to help activate, engage and nurture their leads. This matters because most agents already have significant opportunities sitting inside their client database, but simply don't have the time or tools to consistently follow up with their clients.

By helping agents respond faster, maintain more consistent engagement and identify when their clients are ready to act, we believe HeyLeo can improve agent productivity while creating a better experience for buyers and sellers. We're very pleased with the early results and feedback from our agents and look forward to making this technology available to all of our agents once fully rolled out. Turning to RE/MAX, as Chief Integration Officer for the transaction, my primary focus is straightforward: be ready to execute on day 1 while preserving the strengths that have made both organizations successful.

Since our last call, we have established an integration management office, identified leaders across every major division and work stream and have engaged experienced third-party advisers to assist us with our integration plans and support day 1 readiness. Based on the work completed to-date, we remain confident in our ability to achieve approximately $30 million of cost synergies within 3 years of closing. As we gain better visibility after closing, we'll continue evaluating additional opportunities, and we'll communicate our progress transparently. Throughout the process, our priority is to bring together the best of both organizations while making the transition as seamless as possible for employees, agents, franchise owners and consumers. Success won't be measured by how quickly we change things.

It will be measured by how effectively we strengthen the combined platform while preserving the relationships and culture that have made both successful. With that, I'll turn it to Ravi.

Ravi Jani: Thank you, Jenna, and good morning, everyone. Let me provide a little more context around the financial results. Consolidated revenue for the second quarter was $700.6 million, up 30% year-over-year. Growth was driven by a 27% increase in closed transactions to a record 62,380, substantially outpacing both the U.S. and Canadian home sales markets, together with a 1% improvement in average agent productivity and a 2% increase in average revenue per transaction. Ancillary revenue from Real Wallet, One Real Title and One Real Mortgage grew a combined 28% year-over-year to $4.2 million with wallet revenue growing 140%, title growing 29% and mortgage growing 10%.

The key takeaway is that Real continues to take market share and grow at a significant rate despite a housing market that remains near historically low transaction levels. At the same time, our high-margin ancillary businesses are also delivering improved growth and profitability. Gross profit was $58.3 million, up 22% year-over-year, while gross margin was 8.3% compared to 8.9% in the prior year. The year-over-year decline was primarily a mix effect. In the second quarter, approximately 42% of our closed transaction sides came from capped agents, up 300 basis points year-over-year. Post cap transactions carry a lower brokerage margin by design.

That is the economic trade-off for retaining our highest producing agents and our strong retention rates give us confidence that it remains the right trade-off. Total operating expenses were $65.3 million in the second quarter, including $11.6 million in acquisition-related costs associated with the pending RE/MAX transaction. This resulted in a reported operating loss of $7 million in the second quarter compared with operating income of $1.7 million in the second quarter of 2025. On a normalized basis, excluding acquisition-related costs, operating income would have more than doubled from the prior year. Net loss was $8 million, and on a non-GAAP basis, adjusted EBITDA was $27.6 million, up 38% year-over-year.

Adjusted EBITDA margin expanded to 3.9% from 3.7% in the prior year. We ended the quarter with a record $86.6 million in unrestricted cash and short-term investments, up from $49.9 million at the start of the year. Subject to the satisfaction of remaining closing conditions for the RE/MAX transaction, we expect to prioritize debt repayment and deleveraging following closing. With respect to the stand-alone Real business, we expect the third quarter to follow normal seasonal patterns across the residential real estate industry with revenue and adjusted EBITDA declining sequentially from the second quarter and gross margin lower year-over-year.

Assuming the RE/MAX transaction closes as expected, we intend to use our third quarter call in November to provide a combined company baseline and preliminary 2027 guidance for the combined business. More details on our results and key operating metrics can be found in the earnings press release, financial statements and investor presentation that accompany this call. I will now turn it back to Tamir.

Tamir Poleg: Thank you, Ravi, and thank you, Jenna. 12 years ago, we started Real with a simple goal; make life better for real estate agents. That mission has never wavered. While we can't control mortgage rates or the pace of the housing market, we can control how we innovate, how we execute and how we support the thousands of real estate professionals who trust us with their businesses. This quarter's results reflect that focus. To our agents and employees, thank you for believing in what we're building every day. And to the RE/MAX agents, franchise owners and employees listening today, thank you for the trust you've earned over more than 50 years.

Together, we have the opportunity to write the industry's next great chapter by bringing together the best of both organizations for our agents, our consumers and our shareholders. With that, we can open the line for questions.

Operator: [Operator Instructions] Your first question is coming from Stephen Sheldon from William Blair.

Stephen Sheldon: First, just -- would be great to hear what you're seeing and hearing kind of in the agent and team recruiting pipeline. You continue to go quickly there, which is great. I guess has there been any signs that the pending merger with RE/MAX is impacting that pipeline either positively or negatively? I would just love to hear what you're seeing there.

Tamir Poleg: Thanks, Stephen. Yes, after somewhat a slower start for the year in Q1, Q2 was more robust in terms of agent adds, and we're seeing a stronger pipeline at the moment. I think that the announcement of the RE/MAX deal definitely gave us some tailwinds in terms of agents reaching out or teams reaching out and contemplating joining Real. So I think that all in all, it is a positive. So we are seeing momentum. As Jenna mentioned, we are over 36,000 agents at the moment. So Q3 started very strongly, and we expect that momentum to continue through the rest of the year.

Our focus at the moment is obviously attracting agents from -- that are not with The Real RE/MAX group. So we're trying to attract agents from other brokerages and making sure that we protect the network on the RE/MAX side and making sure that we protect the broker owners businesses as well. So we are focused on attracting agents from the outside and at the same time, also working on integration, but the pipeline is strong, and we are -- we have a few very large opportunities as well in the pipeline. Hopefully, they will materialize before the end of the year.

Stephen Sheldon: Got it. That's helpful. And then as a follow-up on ancillary solutions, title and mortgage continuing to grow quickly, but still remain pretty small, I think, in the grand scheme of things. So I think some investors are wondering when we might see more of a step function change within those high-margin revenue streams. And now with the RE/MAX merger, maybe things might change a little bit. But just as we think about the existing business, any signs that things might pick up as we enter into 2027?

Tamir Poleg: Sure. So on the mortgage side, we see a lot of momentum. [ Kate ] is doing the right things and we're seeing some of our best agents opting into the Real Originate program. I think that revenue will probably kind of show that momentum later this year or at the beginning of 2027. So I think that, on the mortgage side, you should expect some better results moving forward. On the title side, title did grow 30% year-over-year. We are seeing some great attach rates with some of the JVs. I think that we can do a better job at just propelling revenue over there as well. But we're mindful of that.

And again, those 2 companies continue to grow. I think that Leo 2.0, which we just launched for beta, which I'll just maybe spend a minute on. Leo 2.0 is a version of Leo that enables our agents to connect their CRMs into Leo and allow Leo to nurture their leads. We are now integrating the mortgage and title flows into Leo so that Leo can actually offer One Real Mortgage and One Real Title solutions to our agents' clients, and we're seeing some great results before even integrating mortgage and title flows into Leo. Leo is able to nurture leads and just create opportunities for agents.

So the feedback has been amazing, and we expect that to also push the ancillary services revenue moving forward. It's not a short-term effort. It's going to take a while, but we're confident that we're on the right track.

Operator: Your next question is coming from Naved Khan from B. Riley.

Naved Khan: Maybe just one on the -- on Leo. How many [ INSs ] are you connected to now? Are you able to have nationwide coverage with Leo? Or is that still something you are broadening out?

Tamir Poleg: We're still broadening it out. I think that we are now covering close to 90% of the transactions in the U.S. and all of Canada. So it's almost fully built out in terms of MLS coverage.

Naved Khan: Got it. And then maybe just on the attach rate for mortgage and title. Between the 2, which one do you think you're seeing greater momentum than you had expected? And thoughts kind of where should growth rates be maybe exiting the year or early next year in these 2?

Tamir Poleg: So maybe I'll provide some information on the attach rates on the title side. Overall, on the JV attach rates, we're looking at 45% attach rates on the JV side. On a company-wide attach rate, we're looking at -- for eligible deals, we're looking at 3.24%. So kind of no change from last quarter. Our highest rate -- attach rate JVs, we're looking at Texas at 67% and some others north of 80% or between 67% and 80%. So within the JVs, we're looking at very high attach rates, and it's just a matter of getting more high-producing agents to partner with those JVs.

On the mortgage side, and back to your question, I think that in terms of momentum, we're feeling more momentum on the mortgage side, even though it's still not manifested in the revenue, I think that it will start manifesting in the next couple of quarters. But both companies are on the right track. I think that we can do a better job on the title side.

Operator: Your next question is coming from Matthew Erdner from JonesTrading.

Valentin Alvar: This is Valen Alvar here filling in for Matthew Erdner. I just had a quick question here. So as you mentioned, gross margin was 8.3% versus the 8.9% last year. How should we think about the year-over-year trend in the back half of that?

Ravi Jani: Yes, thanks for the question. I mentioned we are seeing an increasing shift in our transaction mix towards post-cap agents. And so, I mentioned as it relates to Q3, we do expect gross margin to be lower year-over-year, albeit I wouldn't expect the same order of magnitude of a decline as we saw in Q2. Part of that is because we announced a couple of fee model changes that go into effect in September, and you'll see that carry through into the fourth quarter of the year as well.

And so that, combined with -- which should be a pickup in some of the ancillary businesses should result in less of a year-over-year moderation in gross profit margin relative to what you saw this quarter. And I'll just clarify, as we look at Q4, we would expect it to be relatively flat year-over-year.

Operator: [Operator Instructions] Your next question is coming from Nick McAndrew from Zelman.

Nick McAndrew: Maybe just one on the headcount side of things to start. I know that the headcount efficiency ratio moved modestly lower this quarter, but operating expenses per transaction continue to improve. So just any insight into where you are currently adding headcount? And I guess, assuming the RE/MAX transaction does close, does that change the strategy around future headcount at all? Or is there an opportunity to kind of improve that again over time as [ reasons ] leveraged across the broader network?

Ravi Jani: Sure, Nick. I'll take the first part, and then I'll let Tamir or Jenna chime in on the go-forward headcount outlook. But this quarter, what drove the employee count higher and therefore, the efficiency ratio moderately lower is something we talked about on the last call, which is that we have a number of contract roles that we've converted to full-time employees. And those are mainly in the brokerage and compliance space. Those were roles that we previously relied on third-party contractors, and we've converted a number of them to FTEs. And so that's why, as we mentioned last quarter, it is P&L neutral, and so you didn't really see an impact on our operating costs or operating leverage.

But yes, from that specific ratio, just converting a contractor to an FTE does have an impact. I would note that we don't expect that to continue at a similar rate into the second half. And if you look at last year, the Q2 was sort of the low watermark for headcount efficiency ratio. And then we did most of our hiring in the first half and then you saw the headcount efficiency ratio improve in the second half of the year. To your second question, yes, the ratio will be a little bit fluid post-acquisition. And so we'll do our best and endeavor to provide you with that level of visibility.

But given certain employees will be spanning both organizations, we'll try and give you the best ratio so you can compare on an apples-to-apples basis. But Tamir, anything you wanted to add on just sort of go-forward resourcing?

Tamir Poleg: Sure. So we plan to bring that type of efficiency that we have implemented on the Real side into RE/MAX as well. So we will continue to update after we close the transaction when it comes to headcount efficiencies and overall cost savings. But we have a solid plan in place. We've been working very closely with RE/MAX management and their team to identify areas of opportunities. And I think that you will be happy with the results that we will post in the coming quarters.

Nick McAndrew: And just one on HeyLeo. I think last quarter, you just discussed the early HeyLeo beta and just that ability to hopefully help agents reengage leads. And any update on just the rollout to the broader agent base and any feedback you've gotten so far and just how agents and maybe consumers are using the products, if at all?

Tamir Poleg: Sure. So we actually rolled out the Leo 2.0 beta version about 2 weeks ago. We have over 200 of our most successful agents and teams that already connected their CRMs to Leo 2.0. And the feedback was immediate and overwhelmingly positive. So Leo was able to create opportunities for them with dormant leads that were lying in their CRMs for years and we're actually out in the market without the agents knowing that. And Leo was able to just engage in conversations with them and show them listings and create appointments for the agents just to go and look at homes with the client. So the feedback was very positive.

And just the bottom line of it is that Leo is generating revenue for the agents. And this is a great starting point for us if we want to monetize Leo in multiple ways. So we'll continue to update, but the immediate or short-term feedback was better than we expected, to be honest.

Operator: Your next question is coming from Naved Khan from B. Riley.

Naved Khan: Just had some follow-ups. Maybe -- so just on the -- between U.S. and Canadian markets, I think last quarter, you called out some weakness in the Canadian market. I just wanted to see how that trended in the second quarter? And then I have a follow-up.

Ravi Jani: Sure. Yes. Thanks, Naved. You're right. The Canadian market does -- has been weaker than the U.S. So in the U.S., our average per agent productivity, transactions per average agent was up around 3%, which is consistent with the market, against quite a tough comp I'd add. But in Canada, our average transactions per agent was actually down 9%, and that's a combination of a challenging market in the provinces where we operate as well as a couple of specific tough comps where a couple of top agents had record first half of last year, like hundreds of transactions. And this year, the numbers are 30 to 50.

So there's a little bit of a comp issue given the Canadian agent base is a fraction of the U.S. base. So this probably exacerbates the percentages, but we are continuing to see declines in Canada on a per agent basis. Now on an aggregate Canada basis, our revenue did grow and our agent count does continue to grow as we've opened up new provinces. But on a per agent basis, the broader market environment is continuing to be a headwind.

Naved Khan: Great. And then maybe just to clarify something you said in answering another question. What were the contract -- what type of were these contract roles have you converted into employees?

Ravi Jani: It was primarily state brokers and compliance specialists. So these were roles that we've previously worked with third-party contractor firms that we've now brought on full-time employees. And Jenna, do you want to discuss the rationale and how it better serves our agents and get the local market expertise, maybe you could give Naved some more context.

Jenna Rozenblat: Sure, absolutely. I would say there's really twofold here. One is, as we've grown, right, there's been more work and more demand for those resources. So having those in-house increases the commitment level of those individuals and allows for better connection between the agent population in those roles. And so what we have found is that there's better delivery from a work standpoint and then also just better interactions from our agent population with those folks. And so a number of reasons why we wanted to do that overall. But at the end of the day, it's to better serve the agents that we have.

Ravi Jani: Yes. And Naved, I might just add because you did ask about mortgage and title previously. Part of the bonus compensation structure for those full-time employee brokers is attached to driving attach rates in the states where they serve. So there is alignment, not just in the brokerage but also across title and mortgage. And so that's one of the other benefits of bringing those roles in-house.

Operator: There are no further questions from analysts in the queue. I'll now hand the floor over to CFO, Ravi Jani, for questions from retail investors.

Ravi Jani: Thanks, Matthew. So now that we've completed the analyst Q&A portion, we'd like to address a few questions that were submitted through our Say Technologies shareholder portal. We've received some great questions this quarter, and so we appreciate everybody who participated. First question for Tamir. As a RE/MAX franchise owner, how will combining 2 companies with different business models create value for existing franchisees? What specific benefits, opportunities or competitive advantages should franchise owners expect as the integration moves forward?

Tamir Poleg: That's a great question. We recognize that franchise owners are the backbone of the RE/MAX network, and our objective is to make their businesses stronger, not to change what has made them successful. RE/MAX franchise owners have spent decades building successful local businesses and around one of the most recognized brands in the real estate space. We believe that the combination gives us the opportunity to strengthen that value proposition by giving franchise owners access to a modern technology platform, AI capabilities and a broader suite of services that can help them attract and retain productive agents while improving agent productivity. Just as importantly, we believe our technology platform can simplify the brokerage technology stack.

Today, many brokerages and franchise owners rely on multiple third-party vendors for CRMs, AI tools, communication platforms, and other agent productivity software. And we believe that we then can replace many of those point solutions, reducing both complexity and cost for franchise owners while delivering a more integrated experience for agents. Beyond technology, we also see opportunities to expand the ways franchise owners participate in the economics of their businesses over time through ancillary services such as mortgage and title as well as Real's revenue share model if they choose to, which has been a powerful driver of agent traction, by the way, and engagement on the Real side.

But throughout the process, we're approaching integration with a great deal of respect. For the RE/MAX franchise model, our focus is on preserving the strengths that have made the network successful while bringing together the best capabilities for -- from both organizations. And we believe that's how we create long-term value for all the stakeholders. Lastly, I will say that I will be on the RE/MAX Broker Owner Conference in Nashville in 10 days, and I'm looking forward to meeting you and sharing more information on our plans moving forward.

Ravi Jani: Great. Thanks, Tamir. Next question for Jenna. What's one decision leadership has made over the past year that shareholders probably didn't notice, but you believe will have one of the biggest long-term impacts on Real?

Jenna Rozenblat: Sure. So I would point to a decision that probably isn't obvious from the outside, which is that we decided to invest just as aggressively in using AI to transform our own operations as we did in building AI for the agents. So most people have heard of Leo, see Leo, but behind the scenes, we've also built an in-house AI automation team, and they're really focused on rethinking how work gets done across every department at Real. Over the past year, that team has automated hundreds of workflows that we've estimated saved thousands of hours of manual work.

And that's really one of the reasons we've been able to maintain one of the leanest operating cost structures in the industry while continuing to scale at a very high rate. It allows our people to spend less time on repetitive administrative work and more time on activities that create value for our agents. What's exciting is that it -- I think we're still in the very early innings. AI just isn't another product for us, right? It's becoming how we build software, how we serve our agents and how we run our company. And so over time, we believe that will continue to improve the customer experience, strengthen our operating leverage and widening our competitive advantage.

Ravi Jani: Thanks, Jenna. I'll take the next question. How much expected profit will this merger bring and positive free cash flow? So as we noted back in April, on a pro forma basis, the 2 companies generated approximately $160 million of combined adjusted EBITDA in 2025. If you layer on the $30 million of run rate synergies that we publicly committed to, that number moves to roughly $190 million. And we see that as a floor, not a ceiling. And so there's a clear path to growing it further through revenue synergies, additional cost synergies and obviously, through organic growth in the businesses.

And so that strong foundation plus the numerous levers for adjusted EBITDA growth is what underpins our confidence in the deal's ability to drive higher profitability and durable free cash flow in the future. So last question for Tamir. How directly tied to the real estate market is the company's -- is the outlook for the company's goals? And is there a plan and path to grow and increase profit? Or is any major takeoff going to be reliant on a real estate boom?

Tamir Poleg: Thanks for the question. The housing market certainly affects transaction volumes, but one of the things we're most proud of is that we've shown consistent growth through both good years and challenging years. And to put that in context, in a typical year, the U.S. sees about 5.2 million existing home sales. We've been running nearly 20% below that, around 4 million for the past 3 years. Despite of that backdrop, we've grown organically primarily by taking market share, attracting productive agents somewhere between $5,000 and $10,000 per year for the past 3 years, while increasing ancillary adoption and expanding margins as we scale. Those are things that we can control regardless of the macro environment.

A healthier housing market would certainly benefit the entire industry, including Real and our agents, but our strategy is not dependent on waiting for the market to improve. Our focus is on continuing to execute and expanding our share of the market that's available today regardless of market conditions.

Ravi Jani: Great. Thank you, Tamir. With that, we can close the call. If you'd be willing to provide the replay instructions, we can then close.

Operator: Absolutely. In order to access the replay, you need to call (877) 481-4010 with a confirmation code of 54149. The replay will be available 2 hours after this call concludes. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.