Morning. Thank you for joining for the Real Brokerage session on the last day of a very busy week. Thank you so much for being here. I'm Stephen Sheldon. I'm an analyst at the tech group at William Blair, covering the real estate sector, including Real Brokerage. Please visit our website at williamblair.com for a complete list of research disclosures and potential conflicts of interest. We're thrilled to have the Real team back at our conference again this year. There's even more to dig into than usual. After it was announced in late April, the planned acquisition of RE/MAX. Obviously that's been a big focal point for the story in the last couple of months. Beyond the large acquisition, announced acquisition, I should say, Real has been a clear outlier in the resi brokerage industry, growing quickly, even with, as most probably know, very subdued housing activity out there. For context, in the first quarter, Real's agent count and gross profit both grew mid 20% range year-over-year. We're optimistic about its potential to increase monetization of solutions like mortgage, title, Real Wallet. There's a lot of growth opportunities out there for them. I continue to think it's a good time to be looking at the story. From the company today, we have Tamir Poleg. He's up here with me, who's the co-founder, chair, and CEO. We have Ravi Jani, who's the CFO, sitting in the audience. We have some teammates from the IR team sitting in the front row here. With that, I'll turn it over to Tamir. Thank you, Stephen. thank you, William Blair, for having us again, and thank you all for being here. My name is Tamir. I'm the co-founder and CEO here at Real. For those of you who've been here last year, you're probably familiar with the story. Real is a real estate technology brokerage, very fast-growing, kind of an outlier in the industry, especially given what's been happening in the past three and a half years in our industry and the slowdown in the housing market. We've been growing tremendously well. some of you are familiar. I want to spend today talking about what we've been building so far, and also the recent announcement of the acquisition of RE/MAX and why we're so excited about the future of the company. Before we dive into it, as always, this presentation may contain some forward-looking statements, so I would encourage you to read the disclaimers in our publications. Diving into where Real is right now, and I'm talking about Real, I'm not referring to RE/MAX at the moment. We're operating in all 50 states in the U.S. and in six Canadian provinces. We have over 34,000 agents who decided to join Real. There are 1.5 million agents in the U.S. They have to be affiliated with a brokerage. They can go to a traditional model. They can go to a franchise model like RE/MAX, and they can choose Real. We are the fifth largest real estate brokerage in the country right now. Since the first quarter of 2023, we've been adding agents at a CAGR of about 50%, which is super impressive. Again, this is a really, really hard time in the housing industry, and we demonstrated that we can continue and grow despite the housing conditions. Last year, our agents closed almost 200,000 transactions, and our agents are a little bit more productive than the average in the industry. That translated into around $2 billion in annual revenue for the company, and we generated around $70 million in adjusted EBITDA. Now, the question becomes, why is Real growing where everybody else is losing market share, where everybody else is struggling? It starts with the value proposition that we offer. The compelling economics, we have an 85/15 split on commissions. An agent closes a deal, we pay them 85% of the commission. We keep 15% of the commission, and there is a cap on how much they pay us in commission splits every year, and that is $12,000. If you're an agent that's generating $500,000 in commissions, you only pay us $12,000. Extremely, extremely attractive compared to other brokerages, where the average is 70/30. This is super attractive for them. The proprietary technology platform that we built that is essentially an operating system for an agent business. Everything they need, from visibility into their business, into their leads, into their transactions, going into transaction management, going into marketing. Everything they need is in one place that is offered to them free of charge. They don't have to pay for third-party tools. Everything is integrated, and everything is on our app. The third main reason why agents are joining us is the collaborative culture. Most of our agents are shareholders at Real, and this makes the culture a little bit unique in the way that agents feel like other agents are their partners. They want to see other agents succeed. Unlike sitting in an office with other agents where you're competing over business, at Real, everybody collaborates. There's a lot of knowledge sharing. There's a lot of support that agents are offering to other agents instead of the company offering it. We don't need to because agents are supporting others. I think that one of the strongest things that we've demonstrated pretty much since 2020, and we started the company in 2014. We went public in 2020, and since then, we've been publicly traded. We're only trading on Nasdaq. One of the things that we demonstrated is that we know how to grow in great markets in 2020 and 2021, but in also really bad markets. Right now, the housing market is at a trough. The housing conditions are worse than they were back in 2008. On average, existing home sales on an average year are 5.2 million homes being sold. Now we're at a rate of 4 million, even below that. There is a 25% decline in existing home sales. Going back to the first quarter of 2023, compared to today. We grew revenue from around $400 million, last 12 months revenue from around $400 million to about $2 billion in the worst housing conditions in the past three decades. This is something that we cannot ignore. At the same time, we also grew agent count from 10,000 agents to over 34,000 agents, and we continue to add more and more agents. This is a very compelling model for a lot of agents around the country. Adjusted EBITDA went from pretty much negative $1 million in 2023 to about $70 million last year, and we're continuing to attract agents that are actually closing deals. This is an industry where a lot of agents are joining, they're thinking that it's going to be easy, and then they're not closing anything. We are focusing on productions because this is how we monetize our business. On the tech side, we are a tech company that is also operating a real estate brokerage, but we built a tech platform called reZEN. reZEN, the way to think about it is try to imagine everything that is going on in the back office of a brokerage. Everything that has to do with supporting the agent, with processing transactions and processing payments. We automated all of that to the full extent possible. On average, at a traditional brokerage, you would have one employee for every 20 agents. Our ratio is one employee for every 25 agents, roughly 25 agents. This is an efficiency ratio 95, sorry. This is an efficiency ratio that just does not exist. The second closest competitor is at 45. I know that many of you know Compass. Compass efficiency ratio is one full-time employee for every 12 agents. This is due or thanks to the system, the proprietary technology that we built that allows us to scale without adding more and more overhead and cost. Now, onto that tech stack, we layered AI. Leo is our AI assistant, and Leo has visibility into everything that the agents do. Every conversation that they're having with our state brokers, every conversation that they have with our support line, Leo is learning from that. Leo now answers about 100,000 agent questions on a quarterly basis. Just think about the huge cost saving and what happened if we needed actually humans to answer 100,000 agent questions. We layered AI on top of all of our systems, and that helps us be so efficient. In addition to that, we also have a fintech angle to the business where we invite agents to bank with us. We process about $2 million a year in payments, and a lot of it is passed through. An agent closes a deal, we receive the commission check, and then we pass about 90% or 91% of it to the agent, so we don't monetize it. The Real Wallet is a banking system where agents can bank with us. They have checking accounts. They have debit cards if they want to spend the money. They have lines of credits that are available to them based on our underwriting because we have visibility into their businesses, and it's just another way for us to monetize the platform. We started the company by monetizing real estate commissions. This is how we monetize transactions. Currently, our gross margins are around 8%- 9% on the brokerage side. At some point, we also acknowledge the fact that our agents have relationships with consumers, and we can leverage those relationships to try and sell mortgage and title. Mortgage and title are super high margin services. On title, we have about 80% gross margins. On mortgage, we have about 50% gross margins, and we want to attach as many title and mortgage transactions as possible. We operate a title company. We operate a mortgage company as well. Right now, the attach rates on mortgage are around 1%, so obviously there's a lot of upside. This is still a nascent business. On the title side, attach rates are around 3.5%. Again, a lot of upside there. Just being able to attach more ancillary services to every transaction could dramatically change the profitability profile of the company. Now, let's move to the news. This is interesting because I think that nobody expected Real to acquire RE/MAX. RE/MAX is this iconic brand, 145,000 agents across 120 countries. Real is only operating in the U.S. and Canada. At the end of April, we announced that we are acquiring RE/MAX for about $880 million. That's the value of the transaction. Obviously, RE/MAX holds a little bit of debt. We're buying it at a trough level, at a seven multiple on synergized 2025 adjusted EBITDA, which we think is very attractive. Obviously, when the market recovers, we will see the upside in that. The idea behind it is that when we looked at our business, we realized that Real has amazing growth. We have technology. We don't have the scale. We don't have the brand. We decided not to build a consumer-facing brand. We decided to build ourselves as a platform for agents, and RE/MAX is known across the world. Everybody knows RE/MAX, and we realized that RE/MAX has what we don't have. They have the brand. They have the scale. We have what they are lacking, which is the growth and the technology. RE/MAX has been losing agents in North America for the last couple of years because they had a technology gap, because their value proposition was diminishing. It's a little bit difficult to attract agents to RE/MAX because you're not providing enough value. The RE/MAX broker owners, their franchisees are struggling with margins because they operate offices where everything is done manually, or they're acquiring third-party tools which they're paying a lot of money to. We thought that by bringing reZEN, our tech stack, into RE/MAX, offering it to RE/MAX agents and franchisees, we can solve for all of those problems, get RE/MAX back on a growth trajectory, and also realize a lot of synergies, which I'll touch on in a bit. In terms of timing, we hope to close the transaction in the second half of the year, hopefully within a couple of months. We're going through the steps of regulatory approval, shareholders votes, and we hope to have good news very soon. If we look at the combined company, what it would look like based on 2025 numbers, we're looking at $2.3 billion in pro forma revenue, $157 million in adjusted EBITDA for the combined company, over 180,000 agents across the world. In terms of transactions, we're looking at 1 million transactions in the U.S. and Canada. This is a huge transaction pool that we can try and monetize, not only through commissions, but also through ancillary services, title, and mortgage. This is a huge opportunity for us. Obviously, there is a lot of opportunity to expand globally, but also in North America. The models are different. Real is a brokerage. We operate a brokerage. We process transactions where RE/MAX is a franchise. RE/MAX invites people who are brokers to open RE/MAX offices, pay franchise fees. We operate two different businesses, but we want to bring those two businesses under one roof so we can monetize those two different offerings. We can touch on what it means for agents. At the end of the day, agents will not have to choose between this or the other. There is a profile of agent who are more entrepreneurial. They're seeking more freedom and flexibility. They are more tech savvy. They don't need handholding. They don't need office access. They're welcome to join under the Real model. If you're an agent that is looking for a little bit more of a brand recognition, you want office space, you want your broker to be next to you're welcome to join under the RE/MAX model. We are going to operate Real and RE/MAX as two different businesses, two different offerings, enjoying the same shared services and the same technology. The idea is, instead of an agent having to choose this or the other, they now have all of the offerings in-house. In addition to the brokerage or everything that is agent facing, and we were very focused on building technology that can help agents close more transactions and be more efficient, we are also developing consumer facing technology. One of the assets that RE/MAX has is a website that generates a lot of leads, and we created an AI assistant that can essentially take a person who's visiting a website or somebody who is just a lead that you acquired on Zillow, for example, and our AI is able to have a conversation with that person, understand what this person is looking for, what kind of homes, which areas, what's important for them. If they're looking for a blue kitchen, our AI will identify the blue kitchen on the MLSs and send those listings to that buyer, so that at the end of the day, we can help our agents, and later on, the RE/MAX agents, convert more leads into money, into dollars. AI will become a more foundational part of our business. Obviously, it's helping us in our operations and in efficiency, but we want to put AI to work when it comes to conversations with consumers. Right now, when a Real agent has a listing, and they're putting a yard sign, there's a QR code that they can place on the yard sign, and whoever is driving by can scan the QR code and have an immediate conversation with Leo about the property. They will receive a presentation of the property. Leo will be answering all of the questions about the property. They can schedule a showing. AI is becoming more and more integral to what we do. One other interesting aspect of the transaction is that about 95% of Real's revenue is driven by commissions. It's dependent on agents closing commissions, where 2/3 of RE/MAX revenue is recurring franchise revenue. By combining the two types of revenues, we create a healthier revenue mix for the combined company. Talking about synergies, out of the gate, without looking under the hood, without understanding all of the different inefficiencies on the RE/MAX side, we identified about $30 million in cost synergies between their office space, between the duplicative roles of the two companies. The two companies are publicly traded, so we don't need that double cost. We estimate the cost synergies at around $30 million. This is a base case. We think that once we get immersed in the RE/MAX business, we will identify even more. That's an initial estimate that we can stand behind, which might improve later on. The more exciting part of this combination is the revenue opportunity that exists. I talked about RE/MAX transactions in North America, those million transactions that we can tap into. If you apply a 1% attach rate on mortgage, which is what we have right now on the Real side, to RE/MAX, this translates into $25 million in revenue at 50% margins. Again, 1% is extremely modest. We want to go much higher than that. If we apply a 1% attach rate on title. On Real side, we have 3.5% right now, which is also a modest number. Every 1% of attach rate on title translates into $10 million in revenue at 80% margins. This is the opportunity that we're looking at here from an ancillary services perspective. We are going to offer the Real Wallet, our fintech platform, to all of the RE/MAX agents. We want them to bank with us. We want them to hold deposits with us. We want them to swipe the debit cards. Obviously a lot of opportunity to monetize through fintech services as well. The most exciting part, for me at least, is the RE/MAX website. RE/MAX operates two websites, remax.com, remax.ca in Canada. Those websites generate, as I said, 1,000,000 buyer leads per year, and those are high-intent leads. Now, the interesting part is that they have not been monetizing those. The industry standard for monetizing real estate websites is at 5%- 7% conversion. Every 1% conversion on this website translates into $30 million in high-margin revenue, almost at 100% revenue. Just try and apply 5% at $30 million per 1%. This is just a huge opportunity. We intend on focusing on that right out of the gate. One other way to monetize those leads is not only by sending them to agents and charging a referral fee once the transaction closes. We can also monetize them by sending it to companies like Guaranteed Rate, who translate those buyer leads into mortgage leads. This is something that's already in the works. I'll just try to summarize all of this. Real is a real estate technology-enabled platform, and the combined company will enjoy both an owned brokerage, which is what Real is doing, with an iconic global franchise brand like RE/MAX. This is something that does not exist in the real estate industry. This is a very unique combination. We're excited about it. This combined company will enjoy the growth that we're bringing. We intend on continuing to grow agent count despite of the very weak housing environment. We demonstrated that we grew dramatically from 2023, where we had 10,000 agents to now where we have 35,000 agents. We will continue to grow the combined company. We're buying RE/MAX at the trough of the market at what we think is an attractive multiple with a lot of cost and revenue synergies that we can materialize. There are multiple catalysts to this combined business. Obviously, if and when we get some tailwind from the market, and there will be a housing recovery. I don't know if it's going to happen this year, next year, 2029, you name it, but there's a 25% upside in the business just by going back to a normalized housing environment without us doing anything, without us adding any agent, 25% upside in that. Obviously, once we integrate the platform, once they use our technology, there is a way to monetize that. There are a lot of synergies, cost synergies, but what we're mainly excited about is all of the revenue that we can extract out of those 145,000 agents and the million transactions in North America. That's great. Well, we have, I think, seven minutes left here. Maybe I'll start with some questions, and then we can see if anyone in the audience has questions. Yeah, as we think about the RE/MAX deal, obviously you can look at the math so many different ways, and there's a ton of compelling monetization opportunities you can go after. I guess as we think about the risks and the challenges, there's going to be a lot of work to integrate. You've talked about trying to get attach rates higher. Maybe just talk about what are some of the key things that you think Real and RE/MAX together need to get right to make this a successful acquisition. I think that the first thing is, in any integration there is risk because there's a lot we don't know about their business. We operate a different business. We think that we understand very well their franchisees' businesses. That's number one, just general integration risk. Number two, Real has a clean balance sheet. We never operated with any debt, and now we're taking on debt, even though that debt can be serviced through the cash flow. As I said, the combined company on a 2025 pro forma basis would have generated $157 million in adjusted EBITDA. We feel comfortable about taking on the debt and deleveraging to about two times in a very short timeframe. Just the idea of having debt is something that we'll have to get used to. I would say on the RE/MAX network side, there's a lot of curiosity, there's a lot of excitement, but also question marks because there will be leadership change. We operate differently. There will be change in momentum. I think that we will need to get the buy-in from the RE/MAX network and to show that we're here to improve and not taking anything away. Yeah. to get, I know it's still really early, but as you look at the RE/MAX franchisees I feel like getting the tech platform, getting them to adopt it is kind of a crucial thing here. What's been the initial feedback you've gotten from them? Have they been looking at it, testing around? Again, I know it's very early, but just what are the indications? Because I feel like getting that tech platform adoption could also be a big key to getting the ancillary adoption. can you talk about that some? I have to remind all of us and myself as well that we're still operating two different businesses. We haven't closed the deal. As we announced, a lot of agents from RE/MAX and franchisees reached out and wanted more information, and we cannot really share everything, and there are some things that we still don't know. What we do know is that we want to be able to offer a light version of reZEN, which would include some features so that we can at least get them to adopt reZEN to some extent. I think that the more extreme case is coming to a franchisee and saying, "Hey, we can take over the operations of your business. We can manage everything for you so that you can focus on training your agents on how to sell homes and attracting more agents to the office. All of the operating burden, all of the administration is on us." I think that the key will be to get the adoption from some key people on the franchise, on the network side, and then highlighting them as a test case. That's how we intend to do it Maybe one other quick one on RE/MAX, and I don't know if I've asked you this before, but I think one of the questions we always got covering RE/MAX as well was, there's a huge international agent base, and I think RE/MAX is generating about a tenth of the revenue per agent internationally as they were in the U.S. The question for them was always, how can you drive that monetization higher? I guess, what are any thoughts there that you have? I don't know if you want to get into that, but it's something that I've thought about more with you guys taking over RE/MAX. Yeah. We want to enhance the value proposition across the globe pretty much for everybody at RE/MAX. Initially, we will focus on North America. U.S. and Canada, this is where we want to focus initially. There is also kind of a different structure to RE/MAX rest of the world, where they sold the rights. Yeah, the franchise rights. We still want to be able to grow the brand globally. I think that from a monetization standpoint, North America is the focus. Maybe just as we think there's a lot going on in the brokerage space, there's been a lot of consolidation, you guys being a good example of being a consolidator here. What has that meant to the ability for Real to recruit agents? Has there been dislocation from some of the other big deals that have happened? I guess maybe just talk about what you're seeing in the overall agent recruiting pipeline. Yeah. We're seeing a lot of consolidation. I think that the reasons are kind of different between one deal to the other. I think that when Compass was acquiring Anywhere, people were expecting a lot of Anywhere agents to look for new brokerages. This really did not happen. I think that agents are starting to understand that it's better for them to be affiliated with a more established brand or more established groups. Right now, we're forming two large groups, the Compass Anywhere or Compass, and then the Real RE/MAX group. From our standpoint, there's a lot of agent attraction momentum right now because what we're seeing is a lot of folks that, for example, have been with Coldwell Banker and they're used to an established brand and they wanted to come over to the Real ecosystem, but they were lacking that brand and the recognition of we're part of something that has been around for a long time. Now with the RE/MAX acquisition, they feel like we can offer them the right model with an established brand, with a company that is here to stay, and just a market leader. We're seeing a lot of momentum on our side. Let's see, we've got, I guess, a minute left. Anyone in the audience have anything? Yep. Yeah. RE/MAX, what is the split for the agents on their take? Yeah. what's the RE/MAX agent take on the RE/MAX side? Every RE/MAX office or franchisee can determine their own splits. The interesting part is that the economics that actually flow through to RE/MAX headquarters is roughly at $2,500 annually per agent, and this is around the number that Real is making per agent. We're making roughly $3,000 per agent. We're kind of indifferent if agents stay at RE/MAX or they switch to the Real model, but the economics are almost identical. I guess just with our last kind of minute or two, for anyone who's kind of just here to listen about housing activity, any signs of life? What are you seeing more real-time? What are you seeing out there? At the beginning of the year, everybody was expecting 2026 to be a recovery year, and I think that everything that has been happening with rates and macro is pushing that down the road. Spring season is kind of solid, to be honest. At the same time, I think that we are, again, we're an outlier just because we're growing, but there's a problem with affordability, and it needs to be fixed. That won't be fixed anytime soon. Yeah. All right. Well, we'll end it there. The breakout is going to be upstairs in Ginny B. Thank you everyone for attending. Thank you, Tamir, for being here and spending some time with us. It was great.