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The Real Brokerage Inc. Announces Fourth Quarter and Full Year 2021 Financial Results – Yahoo Finance

Achieves 612% year over year revenue growth in Q4 2021 to US $50 million and 635% year over year revenue growth in FY 2021 to US $122 million

TORONTO and NEW YORK, March 18, 2022 /CNW/ — The Real Brokerage Inc. (“Real” or the “Company“) (TSXV: REAX) (NASDAQ: REAX), an international, technology-powered real estate brokerage, is pleased to announce it has filed its financial results for the three and twelve months ended December 31, 2021.

Additional information concerning Real’s audited consolidated financial statements and related management’s discussion and analysis for the three and twelve months ended December 31, 2021 can be found on the Company’s profile at www.sedar.com. Unless otherwise stated, all dollar amounts are in thousands of U.S. dollars.

Financial Highlights

  • Annual revenue increased 635% to $121.7 million in 2021 from $16.60 million in 2020 and increased 612% to 50.4 million in Q4 2021.

  • Gross profit grew 415% to $11 million in 2021 and increased 449% to $4.1 million in the fourth quarter of 2021.

  • Net operating loss was $11.7 million in 2021 compared to $3.6 million in 2020.

  • Net operating loss in Q4 2021 was $3.8 million, compared to a net operating loss of $1.3 million in Q4 2020.

  • Adjusted EBITDA loss was $5.1 million in 2021 compared to $1.8 million in 2020.

  • Adjusted EBITDA loss for Q4 2021 was $2.9 million compared to Adjusted EBITDA loss of $0.4 million in Q4 2020.

  • Losses as a percentage of revenue decreased to 10% in 2021 compared to 22% in 2020.

  • Cash flow from operations increased by 342% to $3.9 million in 2021 compared to $(1.6) million in 2020.

  • Cash flow from operations increased by 303% to $1.6 million in Q4 2021.

  • As at December 31, 2021, Real had $38 million in cash and investments compared to $21 million at December 31, 2020. The Company repurchased $12.6 million of common shares pursuant to its normal course issuer bid in 2021.

“We continue to experience rapid growth through the combination of increases in number of agents and revenue per agent,” said Tamir Poleg, co-founder and CEO of Real. “Looking ahead we are focused on adding ancillary services and building consumer facing technology, that further improves the home buying experience. Doing so will also add more revenue streams and increase our total addressable market as we expand into the online real estate industry. Importantly, we feel we have a sustainable business model with $38 million on our balance sheet and operating at cash flow positive.”

Operational Highlights

  • Surpassed 3,850 agents December 2021, a 161% increase since December 2020.

  • The value of completed real estate transactions grew 648% to $4.4 billion in 2021 compared to $589 million in 2020 and increased 620% to $1.7 billion in Q4 2021.

  • Revenue per agent grew 182% to $31.6 thousand in 2021 compared to $11.2 thousand in 2020 and increased 173% to $13.1 thousand in Q4 2021 compared to Q4 2020.

  • Transactions per agent grew to 6.1 in 2021, an 84% increase compared to 2.99 in 2020.

  • Bolstered its management team with the additions of Katharine Mobley as Chief Marketing Officer and Raj Naik as Chief Operating Officer.

  • As of December 31, 2021, 2021, Real offered real estate brokerage services in 40 U.S. states, the District of Columbia and Alberta, Canada and Ontario, Canada.

  • As of December 31, 2021, Real’s efficiency ratio (Full Time Employees : Agents) was 1:62, 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.

The Company will discuss the results on a conference call and live webcast today at 11:00 a.m. EST.

Details of the conference call are listed below:

About Real

Real (www.joinreal.com) is a technology-powered real estate brokerage operating in 41 U.S. states, the District of Columbia, and Ontario and Alberta, Canada. Real is building the future, together with more than 4,000 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
thunder11@therealbrokerage.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.

The following table reconciles the non-IFRS measure to the most comparable IFRS measure for the three and twelve months ended December 31, 2021. This measure does not have any standardized meaning under IFRS and is not a measure of financial performance under IFRS, and therefore, may not be comparable to similar measures presented by other companies.

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, 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)

December 31,
2021

December 31,
2020

Assets

Cash

29,082

21,226

Restricted cash

47

47

Investment securities available for sale at fair value

8,811

Trade receivables

254

117

Other receivables

23

221

Prepaid expenses and deposits

448

89

Current assets

38,665

21,700

Intangible assets

451

Goodwill

602

Property and equipment

170

14

Right-of-use assets

109

193

Non-current assets

1,332

207

Total assets

39,997

21,907

Liabilities

Accounts payable and accrued liabilities

6,604

815

Other payables

3,351

64

Lease liabilities

91

85

Current liabilities

10,046

964

Lease liabilities

40

130

Accrued stock-based compensation

2,268

15

Warrants outstanding

639

Non-current liabilities

2,947

145

Total liabilities

12,993

1,109

Equity (Deficit)

Share premium

63,397

21,668

Stock-based compensation reserve

6,725

2,760

Deficit

(30,127)

(18,448)

Other Reserves

(347)

Treasury Stock, at cost

(12,644)

Equity (Deficit) attributable to Owners

27,004

5,980

Non-controlling interests

14,818

Total liabilities and equity

39,997

21,907

The Real Brokerage Inc

Consolidated Statement of Loss and Comprehensive Loss

(unaudited)

Three months ended December 31,

Twelve months ended December 31,

2021

2020

2021

2020

Revenue

50,479

7,090

121,681

16,559

Cost of sales

46,371

6,342

110,587

14,405

Gross profit

4,108

748

11,094

2,154

General & Administrative expenses

3,378

1,404

10,573

3,658

Marketing expenses

3,790

456

7,808

905

Research and development expenses

682

258

3,979

405

Other income

(249)

(167)

(249)

(168)

Operating loss

(3,493)

(1,203)

(11,017)

(2,646)

Listing expenses

32

835

Finance costs

352

111

662

140

Net Loss

(3,845)

(1,346)

(11,679)

(3,621)

Unrealized losses on available for sale investment portfolio

(352)

(352)

Foregign currency translation adjustment

4

5

Compreshensive Loss

(4,193)

(1,346)

(12,026)

(3,621)

Loss per Share

Basic and diluted loss per share

(0.02)

(0.01)

(0.07)

(0.04)

The Real Brokerage Inc

Non-GAAP Net Income (loss) to Adjusted EBITDA Reconciliation

(In thousands)

Three months ended December 31,

Twelve months ended December 31,

2021

2020

2021

2020

Net Income (loss)

(4,193)

(1,346)

(12,026)

(3,621)

Non operating expenses

Interest

699

111

1,009

140

Depreciation

83

32

213

91

Stock-based compensation

494

802

5,207

1,138

Listing expenses

459

NASDAQ listing expenses

(99)

356

Restructuring expense

54

117

Adjusted EBITDA

(2,962)

(401)

(5,124)

(1,793)

The Real Brokerage Inc

Non-GAAP Net Income (loss) to Adjusted EBITDA Reconciliation

(In thousands)

Three months ended December 31,

Twelve months ended December 31,

2021

2020

2021

2020

Cash flows from operating activities

Loss for the period

(4,193)

(1,346)

(12,026)

(3,621)

Adjustments for:

– Depreciation

84

25

213

91

– Equity-settled share-based payment transactions

1,110

802

4,030

1,138

– Listing expenses

3

459

– Gain on available for sale investment portfolio

(223)

(223)

– Unrealized loss on available for sale investment portfolio

352

352

– Finance costs (income), net

254

112

565

140

(2,613)

(407)

(7,089)

(1,793)

Changes in:

– Trade receivables

21

53

(137)

(61)

– Other receivables

(199)

198

(211)

– Prepaid expenses and deposits

112

(29)

(359)

(56)

– Accounts payable and accrued liabilities

649

(167)

5,789

479

– Stock Compensation Payable (RSU)

1,184

15

2,253

15

– Other payables

2,303

6

3,287

24

Net cash provided by (used in) operating activities

1,656

(728)

3,942

(1,603)

Cash flows from investing activity

Investments in securities

(50)

(8,940)

Purchase of property and equipment

(107)

(9)

(172)

(16)

Acquisition of subsidiaries consolidated for the first time (a)*

1

(1,099)

Net cash provided by (used in) investing activity

(156)

(9)

(10,211)

(16)

Cash flows from financing activities

Proceeds from private placement

2,088

Additional proceeds from Qualifying Transaction

321

Proceeds from exercise of warrants

26,475

Proceeds from Pipe Transaction

20,401

20,401

Proceeds from issuance of convertible debt

250

Proceeds from loans and borrowings

(170)

Purchases of Common Shares for Restricted Share Unit (RSU) Plan

(8,872)

(12,644)

Proceeds from exercise of stock options

160

207

Payment of lease liabilities

(22)

(63)

(84)

(127)

Net cash provided by financing activities

(8,734)

20,168

13,954

22,933

Net change in cash and cash equivalents

(7,234)

19,431

7,685

21,314

Cash, beginning of period

36,077

1,936

21,226

53

Fluctuations in foreign currency

238

(141)

171

(141)

Cash, end of period

29,081

21,226

29,082

21,226

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SOURCE The Real Brokerage Inc.

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