Thanks for joining us for the annual Stephens Investment Conference. We're coming to you guys live from Nashville. I think we're, for those out in the webcast crowd, welcome. We got a room here with some investors. And we've also got Tamir Poleg, who's the founder and CEO here, representing Real on stage. Real Brokerage is ticker REAX. And we also have the manager of Corporate Finance and Investor Relations, Brandon Homer, out in the audience. Ravi was going to join us, but I think he's got another engagement. We'll hopefully get him back next year. But for those of you guys who don't know, Real Brokerage is a leading cloud-based brokerage. They have stood heads and shoulders above the rest of the industry as far as growth. I say this every year, but Tamir and I exchanged LinkedIn messages many, many years ago. He came to me and actually said, "Hey," you know, basically when I started the conversation, I was like, "Who is this guy? He's probably got 30 agents." And here we are today. And these guys are—he won't say this, but I'll say it—"blowing the doors off of the growth in the industry." Like I mentioned, kind of head and shoulders above the rest of the space. So we're going to talk about the business model, the value prop, how they're winning, why they're winning in the space. I think you guys know the drill here. We'll do a fireside kind of back and forth. And then we'll open it up to you guys in the audience for Q&A. Tamir's got a flight to catch, so we're going to keep this a little bit shorter than usual, probably a 30-minute session. But I'll make sure and leave you guys some time in the audience. But Tamir, thanks for joining us. Thanks. It's always a pleasure. Yeah, and what an intro. Yeah, there you go. Right. It's not from here. Yeah, right. All right, so let's just quickly hit on the macro side real fast. This is a tradition we do at the industry, our conference, where we kind of hit on the macro, do a polling across the space, see if any of you guys kind of stand out on the ledge, differ from each other. So for next year, U.S. housing, up sharply, up modestly, neutral, down modestly, down sharply. Are we talking about transactions? Transactions. Yeah, so I was sitting here last year, and you were asking me the same question. And then for some reason, I gave a somewhat optimistic answer. And you were surprised because I'm typically more conservative. So I'll be conservative again. I think it will be up slightly. You are in the consensus right now. So there you go. All right, so 30-year mortgage rates. Definitely will be lower. Do you need a number? Yeah, if you want to take a shot. I would say we'll be at the high fives, low six by the end of next year. Oh, wow. My view, high fives, and we are off to the races in the entire space, and we'll see. Yeah, 100%. Yeah, yeah, yeah. How about home prices? Flat to modest gains. I agree with that and then the political environment. I hate the word politics in conversations up here on stage. Taking personal feelings aside, your best view on the political environment shifts and kind of what that means for U.S. housing? Well, obviously, the mortgage rates have reacted to the elections. But I think that, you know, rates have to do with the economy overall. I think that the economy will do well. And that will probably benefit with housing, maybe not in the immediate term, just because it's very mortgage rate-based. But I think that the biggest problem right now in the housing industry is affordability. And if rates can come down and people can keep their jobs and maybe wage gains continue a little bit, I think that consumers will do well and housing will do well. Yeah. Your best view on a normalized market, kind of characteristics of a normalized market, what that looks like, and your best guess on how long it takes to get there? Yeah, so typically, historic average is 5.1, 5.2 million homes sold in the States. We're now at around 4 million run rate, so 20%, 25% lower than the historic average. I think that we're probably going to go back to normal by 2027. Okay. Last question on the impact of the NAR settlement changes. This is anybody's best guess, I guess. But it doesn't seem like there's been a lot of real ripple effects. Maybe it's way too early to be passing judgment. But your best view on where real estate agent commissions go over the next year or so. We have a good view of the market because we have almost 23,000 agents across 50 states. We kind of have a good grasp of what's going on. We've been monitoring it. We haven't seen any change. That change came into effect on August 17. It's two and a half months now. I think that in the next 12 months, we're probably not going to see any downward pressure on commissions, maybe very, very insignificant, if anything. Okay. Staying on rates and also kind of going with what I was saying earlier, maybe it's just way too early to tell. But I mean, obviously, rates shot lower in September. There was immediate reaction in the market. Rates climbed right back higher in October, and there was not really an impact, right? I think in some demand metrics, some of the stuff we're following, it's actually up, right? And it's even into these first two weeks of November. I don't know how much insights you guys have kind of day-to-day transaction to transaction. But what are you seeing in your system? Are you kind of seeing the same thing? We've been growing so rapidly. We're growing 80% year over year, so it's difficult for us to track so granularly. But I will say that I actually yesterday was looking at last year's data compared to this year's data at the same time, trying to analyze kind of the trend, and actually, this year, the market is less affected by seasonality. Typically, in Q4, transaction volume drops because people tend to buy homes during the summer, but this year, I think that kind of the end of the beginning of the winter market is actually stronger than last year, so that's encouraging. Yeah, no doubt. Let's touch on the NAR settlement real fast. For those who are kind of newer, obviously, your P&L looks fantastic, growing quickly, agents growth, like growing positive EBITDA. Everything looks good right now. But I think people worry that commission rates could come down. The industry is completely going to change. Just talk about the NAR settlement changes at a high level. Just kind of give us a refresher of what's changing and the business practice changes you've had and anything else to add to that. Yeah, so two main changes that took effect on August 17. One was the fact that seller agents can no longer offer buyer agent compensation on the MLS. They can offer it outside of the MLS. And sellers can offer direct compensation or rebates to buyers on the MLS as well. So that's change number one. Whereas in the past, as a seller, you would typically pay 6% to your agent, and your agent would split that commission with the buyer's agent. And then the second change was that every buyer has to sign a buyer broker agreement or any kind of agreement with their agent, just outlining how the buyer is going to compensate their agent. So in the past, buyer's agents would tell their clients, "Don't worry about my compensation because I'm getting compensated by the seller's agent." And now it's more of, "Yes, we need to have a document in place where you tell or you indicate how much you're going to pay me, but I'm probably going to get paid or you're probably going to get that money from the seller." So those changes were announced back in March. And we've had a few months to actually educate our agents on how to have the conversations with the buyers and what kind of documents they have to use. I think that we came very prepared to it. About a week before August 17, we held a meeting with all of our agents and actually close to 40,000 agents around the country, where Sharran, our President, was talking about those changes and what agents need to do and how to have the conversations and what kind of forms they need to use. So from our point of view, everything went smoothly. We haven't felt any disruption in our business. We did take steps to actually have those buyer broker agreements or touring agreements available to our agents and their clients digitally, just to make the process more seamless. We see that also as an opportunity for us to sell more mortgage and title services. We own a mortgage company and a title company. But I think that initially, when the changes were announced, there was somewhat of a panic because nobody likes change, and agents didn't really know what's going on. But there was sufficient time to get prepared. And yeah, I mean, this is the new norm. Yeah, for sure. So we were on a quarterly agent survey, and we pull lots of different agents across all these different brands. And it was a kudos to all the big-scale brokerages. Like, the agent response, we had a question that said, "How well were you braced by your brokerage?" Or like, "How well did you feel you were prepared?" And the results were really good, like 90-something% of people. So I think kudos to all you guys. I think Sharran has also done a very good job of being kind of a national figure where people are looking to him from other brokerages as well. Yeah, it's funny. Other brokerages were actually showing their agents Sharran's videos. Yeah. That was funny. And so it kind of leads to the next question. You guys have been obviously growing the fastest in the industry. You've gone from off the page of rankings to rising the rankings every single year as far as largest brokerages. Feels like you're just kind of still getting started. But the one topic you guys have been kind of quiet on is CCP, right? Clear Cooperation Policy. I think that's a pretty big deal for the industry. I think it could change the brokerage economics, potentially. It can change a lot of things. It definitely has an influence on Zillow and CoStar and Homes.com. So maybe start us off with what Clear Cooperation Policy is, and then what is your official stance on it? Put you to the mic here. Yeah, so Clear Cooperation is a policy that the NAR put in place about four years ago, which basically means or says that if you're an agent and you're going to market a property, you have to put it on the MLS within 24 hours. So basically, just make it visible to as many consumers as possible. Why did that come out in the first place? They have different reasons, but I would want to believe that the main reason is because they want as much exposure as possible to every listing because this works for the benefit of both buyers and sellers. And then recently, some brokerages became louder and louder about the fact that Clear Cooperation should go away. We have not made any stance about the topic. I think that I'll try to be more provocative than I usually am. You don't have to do that. No, I just think that anyone who's speaking about Clear Cooperation at the moment is talking out of position because they have something to gain. This is why we're not saying anything about it. I think that we care about our agents, and we care about the consumers as well. And I view Clear Cooperation as something that is working for the benefit of consumers. If you're a home seller and you want to sell your home, you want as many people to see it. So it needs to be out there. It needs to be on the MLS. It needs to be on Zillow. At the same time, we also understand that consumers should have choices. So you maybe should be eligible or you could choose whether you want it on the MLS or maybe you want it off the MLS for a month and then on the MLS. But I think that, yes, this could be dramatic for both brokerages and for portals like Zillow and Homes.com. At the end of the day, if Clear Cooperation goes away, it gives a lot of power to large brokerages and us included because all of a sudden, we control the information instead of information being democratized. But at the same time, I think that our industry is so filled with egos that brokerages will, I see you're smiling, brokerages will probably not do a good job at leveraging this opportunity if it presents itself. Yeah, I'm with you there. I think it's probably, yeah, not taking a really firm stance because I think it's clear your business would benefit, right? But you believe it's in the best interest of the consumer or the CCP stay intact, right? I don't see any problem with the way things are at the moment. Yeah, fair enough. Okay, we'll keep moving. All right, so let's get into the real model, the real brokerage model. When you set out multiple years ago and looked at the space and said, "Man, this is broken. I'm going to fix this," what was broken and how did you fix it? We started the company in 2014, and back then, we thought that the industry is broken in two main ways. One, the landscape was filled with traditional players. All of them were offering what we believe is low value at a high cost for agents, so if you're an agent, you have to be affiliated with a brokerage, and we thought that you don't have enough alternatives, and the alternatives that you had were not good, so that's number one. Number two, because this is somewhat of a lower margin business and there's constant pressure on commission rates, those players that rely heavily on office locations for distribution of service and on manual labor for processing transactions and supporting agents, we thought that at some point in time, their business model would not be sustainable any longer. How can we create an operating model for a brokerage that eliminates the need for all of this overhead and rent? How can we replace all of this with software and just be more scalable and nimble? Those were the two things we set out to do: provide better service at a lower cost and a better operating model. Okay. And agents are going to vote with their feet. They voted in favor, lots of them in favor of your model. As it stands right now, you mentioned the word software. You've talked about higher margins. You've got ancillary services. There are ways to take your margin higher. But just the core brokerage seems like it's a scale game. Like it's going to be hard to get a lot of margin over time. So I want you to combat me on that at some point here in a second. But just staying on the kind of scale game angle, how many agents do you have now? What's that look like over the last couple of years? And what do you view as the agent target market, right? There's 1.4-1.5 million realtors. They're probably not all making, maybe they do all make sense to join you guys. But just kind of, what do you view as an addressable market opportunity? Yeah, I think that the addressable market is 1.5 million agents. There you go. There isn't a single player that has double-digit market share. It's a very fragmented industry. At the same time, I also think that the industry is undergoing some dramatic changes that maybe open the door for a player to become a double-digit leader. The industry is still dominated by those traditional players. So I would say 90% of the agents are affiliated with companies that have been around for decades. And models like ours are just now starting to gain attraction or attractiveness. But it's still under around 10% of the market. So I think that it's just a huge opportunity that's ahead of us. And I agree with you that we all fight over agents. But I think that there are two things that most brokerages are missing. One is the fact that while we fight over agents, we also need to be able to provide some sort of a differentiated experience for consumers. And second, fighting over agents means that you constantly need to provide more and more value. Now, because brokerages don't have sufficient margins, they were not able to invest in technology. And because of the fact that some of the leaders have been around forever, they're failing to think outside of the box. So for them, providing value to agents is just fighting over cost or over pricing. Whereas you can create a platform that delivers value in multiple ways, can monetize transactions in multiple ways, and then it just becomes easier and stickier to attract agents and retain agents. Yeah. So if you look at gross margins for the brokerages are essentially the splits, that's the value add, right? And that's been under so much pressure across the industry for all these years where it started off at 60%. You can look at real estate's old numbers or anywhere real estate. Started at 60%. That's gotten just compressed, compressed, compressed all the way down. And I think it's to your point, not adding enough value. Now, CCP going away, that's a way to kind of shortcut the value, right? You can have the listings. You have to come see us, and therefore we can take higher splits, yada, yada. All right, so I think that's one angle. Two-sided question here. First is one way you can beat your competition is what you said earlier, a lower-cost model, right? You don't charge your agents as much. So talk about what that every dollar of commissions, how much they can keep with you versus kind of industry average. And then I want you to kind of parlay that into the value-added services you're adding right now that you think could be additive and impactful over time. Our model is based on no monthly fees and an 85/15 split on commissions with a $12,000 cap. If you're an agent, a successful agent, and you're doing $300,000 a year in commissions, you only pay us $12,000 and some fees. I would say that the average agent, the one that's selling, I don't know, eight, 10 deals or homes a year, will end up paying half at Real compared to their current brokerage. That's significant for them. In addition to that, they have the opportunity to earn equity in the company because we were publicly traded and we have an equity incentive program for our agents. They have the ability to earn additional revenue by referring their friends to the company or become a part of our Title JV. There are multiple monetization opportunities for them aside from the very favorable economics. What was the second question? The things you're working on now that you think could be additive over time. Yeah. So obviously, we're very heavy on the tech side. I'll just mention two things that we just recently announced and launched. One is the RealWallet. When agents close deals, the brokerage typically cuts them a check. The agent goes and deposits the checks into their own bank accounts. We just launched a digital wallet for all of our agents. So once they close a deal, the money goes immediately into their digital wallet. So we pay faster. That's number one, and then they can choose whether they want to spend it through a debit card that we're issuing them. And every time they swipe the debit card, we earn the interchange fee. Or they can transfer it into their own bank accounts. Now, on top of that, because we have so much data on our agents' businesses, performance, past performance, pending transactions, revenue share earnings, equity earnings, they have multiple assets on top of our platform that allows us to underwrite them for credit lines that they currently do not have available to them. Because if an agent goes into Wells Fargo and asks for a credit line based on their business performance, banks don't know how to underwrite that. So our agents enjoy access to credit line, which they can use for whatever they want, from buying leads, investing in marketing, buying a car, whatever they want. So the wallet is just such a powerful offering and tool that we're able to do just based on the software that we build that kind of manages all of the transactions on the platform. And then the second initiative that I'll mention. We were talking for a while about a consumer-facing app. We think that the home buying experience can be dramatically improved using technology while leaving the agents in the center. I don't know how many of you have bought a home recently, but it's not a fun process. It takes very long. It lacks transparency and control for the buyers as well. But as I said, brokerages are not investing in consumer-facing technology. So we were trying to build that consumer-facing app. But at some point, we asked ourselves. Most of the interactions that agents have with their clients are done via text. So maybe we should shift from an app to a textual kind of interface. We came up with the idea of taking our AI-powered assistant that is now serving the agents in their businesses and teaching it, teaching this massive brain on how to take a potential home buyer from thinking about buying a home up to closing in one long conversation. In the second quarter of 2025, every agent at Real will receive a phone number. That phone number will be powered by Leo, which is our AI assistant. Leo will be able to ask the buyer a series of questions about their desired property, financial situation, all of those things. Leo will be able to send them listings, schedule showings, get them pre-qualified for a mortgage, provide them updates on the home buying journey, critical dates, all of the documents they have to sign. Leo will actually be managing the process for the agents as the agent assistant and will be saving agents probably 80%-90% of time. And Leo will actually learn how you communicate, what's your personal style. It wouldn't feel as if you're not talking to the agent. You are talking to somebody who knows how to communicate as the agent. So we think that long term, Leo will be able to make our agents much more productive and provide a much better experience for our agent's clients. Very interesting. The debit interchange is brilliant, by the way. Well done there. And on Leo, where are you in the production process? Is it live implemented? Any kind of metrics or KPIs you can share? Yeah. So we launched Leo in August of last year, primarily in order to help our agents with anything they need. We now rebuilt our entire agent-facing app around Leo so that if you're an agent with us and you need anything, Leo is your first address. So you would ask Leo, "Where's my commission check?" or "Please draft a contract for me for this property," or "I have a new listing. Please prepare all of the marketing materials needed. Please prepare an Instagram post for me for the listing in one, two, three Peach Lane Road." Leo is there front and center. And Leo currently answers about 2,000 agent questions a day. Just think about the saving for us with having this tool answer questions instead of humans. When Pritesh, our CTO, pitched to me the idea of a phone number powered by Leo for consumers, I didn't really understand what he was talking about because we're used to using apps. We don't really understand how a textual conversation can give you content-rich interactions or format. And then Pritesh told me, "Just give me two weeks and I'll put something in your hand." And after two, three weeks, I get a text from a number that I didn't recognize. And it was, "Hey, this is Pritesh. I'm your agent. Ask me anything." And I said, "Okay, let's play with it." And at the same time, I was looking at condos in Manhattan. And I started asking Leo about, "Okay, this is what I'm looking for. This is my kind of desired property. Start sending me properties." And Leo started sending me properties. And within, I don't know, a couple of iterations, Leo was able to find properties that I wasn't able to find by myself. And at that point, I said, "Okay, we're onto something." And this is just the tip of the iceberg. Looking at properties is just the beginning. But I think that now, with the fact that we have close to 23,000 agents that are servicing hundreds of thousands of clients at any given point in time, Leo is just this massive brain that has visibility into all of the conversations. And it gets smarter by the second. So again, the launch is going to be in the second quarter of 2025, but Leo is already doing a great job serving our agents. Yeah, that's amazing. It seems like it's an enhancer for the agents, but in certain instances, it could maybe go further than that. But I'm not going to ask you about that right now. Okay, we'll stop there for any questions. We got to get you to your flight. Any questions out in the audience? I'm curious. I'm not familiar with the story, but is there a compensation? Is there a recruitment compensation for agents? Yes. The question is if there is a recruitment compensation for agents to bring other agents on. Yeah. So we grow agent count in the last 12 months by north of 80% year over year. About 85% of the agents joining us are coming through referrals from existing agents that are on our platform. And yes, we have a revenue share program in place that incentivizes agents to attract others. So if I attract a deal to the company and you close a deal, I get a portion of that revenue that's generated to the company. Do you disclose what that disclosure is and whether the agent has to be actively working with them? The agent has to be actively they have to be in a producing status, meaning that they close at least one transaction in the past six months, I believe, and today, we pay about 60% of our split. So our split is 15% of the commission. We pay 60% of that in revenue share. So that's our biggest expense. It's a marketing expense. In the past, we were attracting agents through serving them ads online on Google and Facebook. So we were paying an upfront cost of acquisition. But we found this to be much more effective. What's the attrition rate? We measure it by the dollar churn. So this is a high-churn industry. Let's start with that. Our dollar churn, our revenue churn has been steady at a little bit below 2% per quarter, which is very low compared to the industry. Yeah, I kind of tested that. It's musical chairs. I mean, from an agent count standpoint, I think you see this. You can look at one of their competitors, EXPI, who's actually lost agents, but their revenue per agent or their transaction per agent is going up. And it's offsetting. It's showing you that the attrition is happening at the lowest level. I think you guys are seeing less attrition than that. But yeah, I think it's typical in the industry. Any last questions, guys? Last one for me, the one to close is, as you look out 10 years from now, what do you envision Real Brokerage being? And are you a consumer-based company or is your customer agents or the consumer? I would say both. People look at us right now as a brokerage because this is our main business. But I think that we're set out to build something very different. We're set out to build a financial ecosystem around home purchase and sale and around agent businesses. So we want to provide everything in the home purchase and sale process. So we want to provide your mortgage, your title, your insurance. We want to provide the agents that can help you do that. We want maybe to go into consumer credit. Obviously, we have the wallet right now that's monetizing agent businesses in other ways. So I think that very soon, people will take us out of that brokerage bucket and put us into a new bucket that still doesn't exist. And maybe all of us can define it together. Yeah, absolutely. Well, thanks for the time. And thanks for you guys for joining. Appreciate it. Yeah.