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Hi and welcome to another riveting conversation with me here on the Harvest podcast. You know I'm Kamil Fisher and as we've been doing, we're catching up with all the presenting companies that will be present at the MicroCap Conference coming up very soon, January 28th to 30th at the Borgata Hotel Casino and Spa. With me I have CEO, co-founder and chairman, Mr. Tamir Poleg. He's with us as the head of The Real Brokerage Inc. They are listed on the NASDAQ, REAX, based in Miami, Florida. The Real Brokerage Inc. together with its subsidiaries operates as a real estate technology company in the US and Canada. It operates three segments: North American brokerage, Real Title, and oneReal Mortgage, also offering brokerage, title, and mortgage broker services. Tamir, I hope I have done justice to that description of the company, but welcome to the show and please give us a roundup of your interpretation or at least your main mission and vision for The Real Brokerage Inc.
Absolutely, hi Kamil, hi everybody, excited to be here. The Real Brokerage is a real estate technology platform. Yes, we do operate a large real estate brokerage in North America in all 50 states and in four provinces in Canada. We have more than 25,000 agents working with us exclusively, so we are the fastest-growing player in the field. But aside from that, we operate a technology platform for agents that also provides mortgage services, title services, fintech services as well for agents. So we are expanding our offering, but yeah, a very exciting story. Started back in 2014, listed since 2020, growing year-over-year very impressively. In the third quarter of 2024, which was the last quarter we reported, we grew revenue by north of 80% year-over-year while the market is down substantially. So we are a very unique growth story right now in our industry.
Exciting. So obviously there are many compelling reasons why investors should be looking at your company right now. With recent news just released a few hours ago, tell us more about these compelling reasons that investors should be keeping their eye on REAX and what the potential catalysts that you see on the horizon.
Sure. A couple of things. One, we are the only player that both grows agent count, market share, revenue, and profitability. We've demonstrated that we know how to grow in good times and bad times. The real estate market was amazing in 2020 and 2021, it kind of shifted in the middle of 2022. We grew very rapidly in 2020 to 2022 and we grew rapidly in 2022 up to this moment. So I think that one of the compelling reasons to look at us is that we demonstrated our ability to grow, attract high-performing agents, through good times and bad times, and grow revenue and grow market share. Just to give you a sense of where we are, in the third quarter of 2024 we had revenues north of $370 million in the quarter. To compare, in the entire year of 2020, I think we did $15 million in revenue. So between 2022 and 2024, we kind of 10x'd the company even though the market kind of dropped by about 25% if we're talking about transaction volume. So growth despite market conditions is one thing.
Second, we're adding high-margin services to our offering. We acquired a title company, a mortgage company, and then recently launched a digital wallet for our agents. In our title business we have gross margins north of 80%, in our mortgage business we have gross margins north of 50%, and in our new fintech offering, the Real Wallet, we have very high margins as well. So not only do we grow agent count and add more transactions to our platform, we're starting to monetize those transactions in various ways that are much higher margin than just classic real estate brokerage. So I would add that as another compelling reason to look at us. And then the last piece is that we are a true tech player. We are the most efficient brokerage in the market because of the fact that we implement software instead of putting more and more humans to work, meaning that as we grow, as we scale, as we add more and more agents, we do not grow our operating expense at the same pace. And we have a very compelling ratio of one employee for every 140 agents, whereas the average in the industry is one employee for every 20 agents at any other brokerage. So I think that all in all, people look at us as a great growth story, a lot of upside through high-margin ancillary services, and just an overall opportunity to change the way people buy and sell homes using technology.
Wonderful. Would you say that ratio makes up one of your competitive advantages in the market, or what would you highlight?
Yeah, 100%, 100%. There are one and a half million real estate agents in the US, another 160,000 in Canada, and the market is still dominated by traditional players. Those are brokerages that rely heavily on office space for distribution of services to their agents, they rely heavily on manual labor for processing of transactions. We as a company, we don't have that overhead. We don't have the office space, we don't have those expenses. We have very few employees that process transactions due to a lot of automation and software that we built that can automate all of the processes that typically are done by humans. So this is a huge competitive advantage because nobody can actually compete with us on efficiency, and this is why we can scale. Just in the first two weeks of January of 2025, we added a thousand agents in two weeks. Think about a company that is brick-and-mortar based, how many offices, how many years you would need to actually grow the company by a thousand agents. You typically have, I don't know, 30 agents in an office, 40 agents in an office. You would need to rent tens of offices, dozens of offices, in order to accommodate a thousand agents, and that takes time. So this is why I'm saying that this is a huge competitive advantage, and that allows us to just scale very rapidly.
