Real Brokerage posts 30% revenue growth as Remax vote nears

The Real Brokerage Inc. reported strong second-quarter results Thursday morning, with leadership framing the numbers as a step toward closing its pending acquisition of Re/Max Holdings Inc.

Revenue rose 30 per cent to US$700.6 million in the second quarter, up from $540.7 million a year earlier. Adjusted EBITDA grew 38 per cent to $27.6 million, while the company posted a net loss of $8 million, compared with net income of $1.6 million in the same period last year. The loss included $11.6 million in acquisition costs tied to the Remax deal, the company says.

“Real delivered another quarter of significant double-digit organic revenue growth and Adjusted EBITDA margin expansion, despite an overall housing market that remains near trough levels,” said Tamir Poleg, Real’s chairman and CEO. Poleg said the company continues to make “meaningful progress” toward closing the Remax acquisition.

Integration planning is already underway, according to chief operating and integration officer Jenna Rozenblat, who added, “…we have high confidence in our ability to achieve $30 million of cost synergies within three years post-closing,” she said.

The company ended the quarter with $86.6 million in cash and no debt, according to CFO Ravi Jani. 

Agent count and transactions

Real’s North American Brokerage revenue rose 30 per cent to US$696.4 million. Agent count grew 26 per cent year over year to 35,348, and as of Aug. 5, more than 36,000 agents were on the platform. The company closed 62,380 transactions in the quarter, up 27 per cent from 49,282 a year earlier, with total transaction value reaching $26.3 billion, a 31 per cent increase.

Deal background

The $880-million acquisition, announced in April, would combine Real’s technology-driven brokerage platform with Remax’s global franchise network under a newly created holding company, Real Remax Group Inc. Real’s existing shares would be consolidated 10-for-1 and exchanged for shares in the new entity, while Remax shareholders could elect either $13.80 in cash or shares per eligible share, subject to proration, with total cash payouts capped between $60 million and $80 million.

The deal cleared a major regulatory hurdle last month when the U.S. Department of Justice granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, according to a July 14 SEC filing. 

Both companies’ boards have recommended shareholders approve the transaction, which goes to separate special meetings on Aug. 14.

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