This is something that nobody else offers. So, they see the vision around this financial ecosystem that we’re trying to build together with them.
Wyatt Swanson: Got it. That’s really helpful. I appreciate the color. And then, just to follow-up, could you give any more detail or color just on overall agent growth expectations for the next few quarters or for calendar 2024 overall?
Tamir Poleg: Yeah. We’re not providing a full year guidance, but as I said, 1,000 agents join in January, 1,000 in February, we’re expecting over 1,000 in March, probably another 1,000 in April. I don’t know if that pace is sustainable or maybe it will even increase, but at this point in time, it seems like this is going to be a very, very strong growth year for us.
Wyatt Swanson: Okay. Understood. Thank you.
Tamir Poleg: Thank you.
Operator: Thank you. There are no further questions from analysts in the queue.
Ravi Jani: Great. Well, now that we’ve concluded the analyst portion of the call, we wanted to address some of the questions received from shareholders on the Say Technologies Q&A platform that was launched last week. We received a number of excellent questions and so thank you to all who participated. First question for Tamir. Are the agent incentives, including the 85/15 split, sustainable?
Tamir Poleg: Yeah. The 85/15 commission split in favor of our agents is core to our value proposition and something we have no plans to change in the future. The split is one of the most generous in the industry, as you probably know, especially when factoring in the $12,000 cap, but it is also one of the reasons why we’re focused on driving growth of our ancillary business lines, such as Title and Mortgage, as well as The Real Wallet, where growth margins could be 5 times to 8 times higher than our traditional Brokerage margins.
Ravi Jani: Great. Next question for Sharran. What is the strategy to recruit and retain top agents, and how do you plan to retain top talent as the brokerage grows?
Sharran Srivatsaa: Awesome. Thanks, Ravi. For us, growth is not just about great numbers, right? It’s about attracting great people and then building a great community that actually create great numbers. So, conceptually speaking, our approach is quite simple. We believe the top agent of today is actually looking for a completely different platform and we call it an entrepreneur-centric platform. Now, what does that mean? Agents today want to design and build and run their businesses the way they see fit in their market, to their skills, with their own business models. And traditionally, it’s been where an agent has to plug into a brokerage’s model, but we have changed this approach where we say it’s our job to create these entrepreneur-centric Lego [ph] blocks.
A Lego block that an independent brokerage would want is completely different than what a team would want, is completely different than what an individual agent would want. So, our focus is to build more of these Lego blocks to help agents build their businesses on The Real platform, which gives us a true partnership with the agent.
Ravi Jani: Got it. Tamir, next question. Have there been any concerns about Real’s infrastructure with respect to the rapid growth we’re experiencing?
Tamir Poleg: On the contrary, we’re very excited about the growth. Given the scalability of our tech platform, we’re not concerned about the ability of our systems to handle the significant growth we’re experiencing. In fact, just this week, our transaction team set an all-time record by closing 500 transactions in a single day. This is something that we have never done before. Of course, we are making select headcount additions where necessary to ensure the agent onboarding and support teams remain well-equipped to support our agents whenever and wherever they need. But, with that said, this is another reason why we’re excited about Leo AI, which effectively functions as a virtual assistant for every agent on our platform and reduces our need to hire the same amount of full-time employees as a traditional brokerage model would.
Ravi Jani: Great. Next question for Sharran. And we talked about this a little bit in the analyst Q&A, but could you just expand on the vision for Private Label and how is this a unique value proposition for some agents?
Sharran Srivatsaa: Yeah. For sure. So this goes to our entire company’s philosophy of test and invest. We’ve been working on this Private Label offering for about the last 12 months. In 2023, we ran a pilot of this program in five different markets and that’s what actually allowed us to say this could be adopted really well. So what Private Label really means, as Tamir talked about, is an independent brokerage that has built a brand in the local market to keep their brand while partnering with Real. This is important because in every other instance, these independent brokerages would have to give up their brands that they have built to actually join a company. So to give some broad context, there are over 100,000 independent brokerages in our country, and these independent brands and owners have spent years building brand equity in their local markets.
In fact, from personal experience in my previous brokerage at Teles, we built a leading brand across 22 offices in Southern California that was acquired and combined with a national brokerage and we lost that brand overnight. If we had this option, it would have been a much more scalable option for us. With Private Label, independents can join Real, keep all their branding exactly the same and effectively, it makes Real a brokerage-as-a-service provider, powering independent brokerages with our backend technology and systems and support. So I’m super excited about the potential of Private Label to offer this value to independent brokerages and teams, because it shows and goes to the scalability of our platform overall. So it’s also worth mentioning that this is not done across industry.
There are a few players in our industry, like Side, who have provided somewhat of a similar offering to independent brokerages and their equity valuations are in the billions of dollars. We actually feel pretty good about the potential for Private Label to help shine light on this tremendous value that we offer and the Lego blocks that we give to independent brokerages.
Ravi Jani: Great. Next question for Michelle. When Real grants stock awards, where does the stock come from? Does the company go out in the open market to purchase the shares or is there a float of treasury stock that the company is hoping to issue the stock awards?
