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REREAX

Real Brokerage (REAX) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Real Estate· Aug 6, 2026

Source: earnings call transcript

Executive summary

The Real Brokerage Inc. Q2 FY26 — Strong Growth and Profitability Ahead of RE/MAX Merger

The Real Brokerage delivered significant growth and improved core profitability in Q2 FY26, driven by market share gains and agent productivity, despite a challenging housing market. The company is progressing towards its proposed merger with RE/MAX, which is expected to close in H2 2026, aiming for substantial cost synergies and an enhanced technology platform. Management remains focused on innovation and agent support to drive long-term value, independent of market conditions.

Highlights

5

  • Revenue increased 30% year-over-year to over $700 million.

  • Adjusted EBITDA increased 38% year-over-year to $27.6 million.

  • Agent count grew 26% year-over-year to approximately 35,350, exceeding 36,000 as of the call date.

  • Ended the quarter with a record $86.6 million in unrestricted cash and short-term investments.

  • Ancillary revenue grew 28% year-over-year to $4.2 million, with Real Wallet up 140%.

Concerns

3

  • Gross margin declined to 8.3% from 8.9% in the prior year, primarily due to a mix effect from more post-cap transactions.

  • Reported operating loss of $7 million, compared to operating income of $1.7 million in Q2 2025, due to $11.6 million in acquisition-related costs.

  • Canadian market showed weakness, with average transactions per agent down 9% year-over-year.

Guidance & targets

CategoryTargetConfidence
Cost synergies from RE/MAX transaction
$30 million
high materiality
High
Q3 FY26 Revenue
declining sequentially from the second quarter
medium materiality
High
Q3 FY26 Adjusted EBITDA
declining sequentially from the second quarter
medium materiality
High
Q3 FY26 Gross Margin
lower year-over-year
medium materiality
High
Q4 FY26 Gross Margin
relatively flat year-over-year
medium materiality
Medium
Combined Company 2027 Guidance
preliminary 2027 guidance
high materiality
High
Post-RE/MAX Closing Capital Allocation
prioritize debt repayment and deleveraging
high materiality
High

Deals & partnerships

RE/MAX Acquisition of RE/MAX, combining an iconic global brand with Real's modern AI-enabled technology platform and economic model.

Aims to better support real estate professionals, improve buyer/seller experience, and build a stronger, more profitable company. Integration management office established, leaders identified, third-party advisors engaged.

Risks & headwinds

Challenging Housing Market past 3 years

US existing home sales running ~4 million, 20% below typical 5.2 million.

Mitigation:Focus on taking market share, attracting productive agents, increasing ancillary adoption, expanding margins, and innovation.

Canadian Market Weakness Q2 FY26

Average transactions per agent down 9% in Canada.

Mitigation:Agent count continues to grow in Canada, opening new provinces.

Gross Margin Compression Q2 FY26

Gross margin 8.3% vs 8.9% prior year; 42% of closed transaction sides from capped agents, up 300 bps YoY.

Mitigation:Considered a 'right trade-off' for retaining high-producing agents; fee model changes in September and pickup in ancillary businesses expected to moderate future declines.

Acquisition-Related Costs Q2 FY26

$11.6 million

Mitigation:These are one-time costs related to the merger, expected to lead to synergies and long-term profitability.

What to watch in Q3 FY26

RE/MAX Transaction Closing

H2 2026
Current Security holder vote scheduled for August 14
Target Transaction closed

Why it matters

The closing of this acquisition is foundational to the company's future strategy, growth, and synergy realization.

Our security holder vote on the RE/MAX transaction is scheduled for August 14. Assuming approval by both Real security holders and RE/MAX's shareholders and satisfaction of the remaining closing conditions, we expect to complete the transaction thereafter in the second half of 2026.

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Q&A highlights

How is the agent recruiting pipeline looking, and has the pending RE/MAX merger affected it (positively or negatively)?

Q2 saw robust agent adds, and the RE/MAX deal announcement provided tailwinds, leading to a strong pipeline and over 36,000 agents currently. The focus is on attracting agents from outside the combined Real/RE/MAX group.

“I think that the announcement of the RE/MAX deal definitely gave us some tailwinds in terms of agents reaching out or teams reaching out and contemplating joining Real. So I think that all in all, it is a positive.”

asked by Stephen Sheldon · answered by Tamir Poleg

2 min read 5 chapters

Detailed narrative

RE/MAX Transaction Update

The proposed merger with RE/MAX is a pivotal step for The Real Brokerage, with the security holder vote scheduled for August 14. The transaction is expected to close in H2 2026, assuming necessary approvals and satisfaction of closing conditions. This combination aims to leverage RE/MAX's global brand and agent network with Real's AI-enabled technology and economic model, targeting approximately $30 million in cost synergies within three years of closing.

Agent Growth and Productivity

The company continues to attract productive real estate professionals, ending Q2 FY26 with approximately 35,350 agents, representing a 26% year-over-year increase. As of the call date, the agent count has already exceeded 36,000. This growth, coupled with a 1% improvement in average agent productivity and a 2% increase in average revenue per transaction, demonstrates the company's ability to gain market share even in a challenging housing market.

HeyLeo 2.0 and AI Integration

HeyLeo, Real's AI relationship management platform for agents, is evolving with the recent beta launch of Leo 2.0. This new version integrates with major real estate CRMs, allowing agents to leverage AI for lead nurturing, consistent client engagement, and identifying when clients are ready to act. Early feedback from over 200 beta agents has been overwhelmingly positive, with Leo generating revenue opportunities from dormant leads, and the company plans to make this technology available to all agents once fully rolled out.

Ancillary Services Momentum

Ancillary revenues from Real Wallet, One Real Title, and One Real Mortgage grew a combined 28% year-over-year to $4.2 million in Q2 FY26. Real Wallet saw a 140% growth, One Real Title 29%, and One Real Mortgage 10%. While these services remain relatively small, the company sees significant momentum in mortgage and expects revenue manifestation in late 2026 or early 2027. The integration of mortgage and title flows into HeyLeo is anticipated to further boost these high-margin services.

Operational Efficiency and Headcount

The Real Brokerage maintains a lean operating cost structure by aggressively investing in AI to automate internal operations. An in-house AI automation team has automated hundreds of workflows, saving thousands of hours of manual work across various departments. Recent headcount increases were primarily due to converting contract roles, such as state brokers and compliance specialists, to full-time employees, a move that is P&L neutral and aims to better serve agents and drive attach rates for ancillary services.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.