Realpha Tech (NASDAQ:AIRE) Q4 2025 Earnings Call

0:00 And below in the comments as we will do a q a section at the end. Before we begin, please note that today's discussion may include forward looking statements. Our full disclaimer is in the comments below along with our link to our investor relations website where you can find our press releases, filings, and additional materials. Joining us today is our chief executive officer, Mike Logozo. So Mike's path as the first employee of reAlpha has evolved alongside the company itself. He joined in the early days as chief financial officer and later took on broader leadership responsibilities as president and chief operating officer. Though these roles through those roles, he worked closely with teams across the organization as the company built out its platform, expanded operations, and prepared for its public listing.

0:48 That progression gives him a broad perspective across finance, operations, and strategy alongside a practical understanding of how the different parts of the business come together. Today as CEO, Mike focuses on execution and scaling the company, integrating the businesses we bring onto the platform, strengthening operations, and continuing to build the systems that support reAlpha's next phase of growth. We're also joined by Thomas Gutzman, our chief financial officer. Tom joined reAlpha through our acquisition of Preview in November 2025, where he was a cofounder and helped build a digital first home buying platform that expanded across 12 states in Washington DC. Following the acquisition, Tom served as CEO of reAlpha Realty, leading the integration of previous brokerage operations into the broader reAlpha platform.

1:37 Recently, Tom was appointed chief financial officer where he now oversees the company's financial operations and capital strategy. Earlier in his career, Tom held investment and trading roles at firms including SAC Capital, JPMorgan, Citi, and Jaber Capital Partners, and brings both capital markets and real estate technology experience to the role. Mike and Tom, thank you both for being here. Hey, Paul. Thanks for facilitating today, and thanks for everybody for taking the time to listen to us. Hi, everyone. Great to be here. Awesome. Today, I'll walk through a series of questions across three areas, our financial results, the progress we've made in building the platform, and how management is thinking about strategy and execution going forward. So with that, let's get right into it.

2:26 So, Tom, starting with the financials, when you look at the fourth quarter and the full year results, what stood out most from a financial perspective? I think overall, I think it was a great year and great quarter of execution by the team. You know, full year revenue increased by 376% to 4,500,000 for for the 2025 fiscal year. Q4 revenue increased 70% year over year to $900,000 And when you look at it, everything's going in the direction we want it to be going. Full year total transaction volume increased to 116,100,000 Gross profit on the year increased to $2,500,000 for the full year. And we finished the year with cash and cash equivalents of approximately $7,800,000 which is 149% year over year increase.

3:17 And when you reflect on that for the year, we really strengthened the balance sheet during 2025 and improved our financial flexibility. Not only did we do various fundraising in terms of equity linked offerings, but we also paid off our Streeterville note, which was we have no parent level debt at this point. So it was really a year of growth, a year of, you know, improving our financial flexibility going forward, And it was all focused on, you know, investing in our AI platform, acquisitions, you know, improving and marketing our brand to more channels, and building our leadership and our workforce.

3:59 Thanks, Tom. I obviously agree with everything you said there. And, you know, to everybody else who have heard me over the last six months or so, nine months in the role, I've been saying that we're building the foundation at reAlpha. And I hope these results are showing you that we're doing what we said we would do. I believe these results reflect the progress, you know, that we're building our initial integrated home buying platform. And, you know, we expand the platform, as we expand it, we'll continue to deepen the service coordination, and strengthen the operating foundation, so we could continue to build this company where we know where it could be. You know, as we're building this platform, our strategy is just to capture more of the home buying transaction across real estate, mortgage and title, and our mortgage more segment alignment over time.

4:50 And we'll get through that, and we'll talk more about how this is going to basically benefit the customer, benefit the company and its shareholders as we continue to go through the session here. Thank you, guys. So revenue growth is clearly a key headline for the year. Can you walk us through the main drivers behind that performance across reAlpha and the platform?

5:13 Yes. So growth came from multiple pillars. So within our home buying segment, you have the mortgage brokerage operation, which had strong year over year growth. And then in addition, we expanded out the Realty contribution with the Preview acquisition, which obviously closed on 11/21/2025 and added in that last month of the year to the revenue. And then in our technology services segment, our AI chat subscription revenue also saw meaningful growth. And that what's what's interesting and attractive about that segment is that AI chat adds a recurring software subscription revenue to our revenue stream. And and when we look at this, you know, across, you know, our spectrum of of services and segments, it's we're broadening the revenue mix now. It's in more much more diversified lines of revenue coming in. It definitely sets us up for more durability of the model over time.

6:16 Thanks, Tom. And one important point is this isn't a single service model. We keep trying to drive that point home. If you think of the traditional market, these services are conducted on separate platforms owned by separate providers, whereas reAlpha is more of a journey on one platform by one provider.

6:34 And with more service overlap, that's gonna result in more revenue capture, with more coordination, that's gonna result in better economics over time. Our long term goal is to originate more transactions inside that platform, and then keep more of the transaction inside the platform. And every every, you know, I would say, component of this company, you know, even AI chat, that is essentially helping us from an r and d standpoint, providing great AI technologies that we could bring into our platform, which will ultimately benefit the customers on the front end, as well as all the people servicing the customers on the back end. Great. And as the platform continues to scale across brokerage, mortgage, title and AI, how should we think about operating leverage in the model over time?

7:24 Yeah. So when we think about operating leverage, you know, we that derives from shared systems, common workflows, better coordination across our services, and that AI facilitation that creates that efficiency, both for the consumer and for our agents and loan officers. And when you think of what does that really then drive in terms of the leverage, we can drive greater economics for each customer's journey. So acquiring one customer but selling them multiple products in one organized and efficient way. And there's less friction in the execution. And when you think about offering multiple services to people, if we can offer them with much more efficiency, we can lower our cost to deliver that.

8:10 And that's what really enables us to deliver our value proposition to consumers with our savings oriented approach of our rebate model. So when we think about, you know, our core idea, it's always been to reduce fragmentation. You know, we talked about all the different providers, different platforms that go along with that are handoffs. And, you know, handoffs create delay, they create cost, as well as friction. You know, our model is one coordinated workflow. We use AI to help us organize our work, to help us improve our visibility, and then reduce the manual effort that a lot of the traditional services provide.

8:52 So, you know, a better buyer experience results in stronger operating model. That's the way we look at it. Thank you, guys. How are you thinking about capital allocation going forward as we balance investing in the platform growth while maintaining a disciplined financial structure? Yes. So as we mentioned earlier, 2025 was focused giving ourselves greater flexibility with our capital strategy. And the first and foremost to enter into 2026, we want to preserve that flexibility and liquidity as we move into this year. So when we think about '26, we're focused on growth, but we want disciplined growth. So we're going to be very methodical in terms of when we're allocating capital to, you know, whether it be a specific business line or a in potential acquisitions, we're going to always look at it on what's the return on spend.

9:46 And when we think about that, you know, capital deployment, we wanted to make sure it supports the platform, AI and technology, geographic expansion, or being able to do strategic acquisitions that can further enhance the platform for both consumers, you know, and our service providers. So when, you know, we think about, you know, focus, we want to make sure we're controlled, predictable with with the return that we're getting on our spend, and then ultimately using that to drive long term value creation. You know, not just growth for the sake of it, you know, like we saw in the early, you know, twenty twenties, but really being methodical and being, you know, putting ourselves on a longer term path to be an enhanced platform.

10:36 Yeah. And to elaborate on that, you know, we say every dollar needs to do one of two things. Either it brings more buyers onto the platform, or it makes the platform better for the existing buyers. So, you know, we want to be, again, very methodical, very thoughtful as to how we spend our capital going forward. It's going towards growth. Growth matters. And we do believe that disciplined growth is the way to go here at the company. So just reiterating what Tom said. Our investments are going to be judged on platform fit, customer impact, and execution value as we continue to grow this company.

11:18 So Tom, shifting from the financials to the business itself, when you step back and look at where reAlpha ended in 2025, what were the most important milestones in building the integrated platform? Yeah. I mean, obviously, you know, this is perhaps a bit self focused, but pre the Preview acquisition was a major milestone both for the company myself. That's how I, you know, came to join the company. But it really, you know, sets up an important thing for the platform in terms of bringing together Realty, bro Mortgage, and title. But it doesn't stop just with the Preview acquisition. Obviously, know, we reAlpha entered into a definitive agreement to acquire Instamortgage. So when we look at not only what Preview brought to the table in terms of 13 additional states on the real estate side plus DC, additional technology around digital first brokerage operating model, we started to expand that alignment of the realty and mortgage services.

12:23 That's something we're gonna continue to, you know,

12:25 enhance over time. And then, obviously, on the in response to, like, the Instamortgage, once we can achieve that, that will also add lending capabilities to the platform. So it's really putting all the puzzle pieces together that will allow us to deliver a truly differentiated product for homebuyers. Yeah. And I I'd also like to add that, you know, Tom did a great job of covering all of the tangible aspects of, you know, bringing on preview, and as well as, you know, the definitive agreement to acquire InstaMortgage. But there's also an intangible aspect as well that I like to talk a little bit about, and that is talent, what we're bringing into this organization.

13:11 Tom had created a very, very talented and capable team that understands the real estate space, the realty space in particular, very well. And culturally, they're a great fit. They were doing a rebate program and bringing them into the reAlpha integrated platform just really made sense. You see, you know, elevating Tom into the CFO role shows that, you know, we're taking the best talent that we have in the organization. We're putting them in the right roles to move forward. And as we continue to move forward, you know, with Instamortgage, we'll take a similar approach with them as well. They have immense talent in mortgage, particularly in the lending space. And this is an area that obviously we're gonna continue to grow. So, you know, this is an intangible that goes along with all the other tangibles that Tom mentioned about the revenues, the licenses, and technologies.

14:06 Thanks, guys. And on the note of Instamortgage, so on that acquisition and the broader mortgage strategy, what still needs to happen operationally or regulatorily to unlock the next phase there?

14:20 And where do you expect the economics to improve most as that all comes together? Sure. Yes. So on the InstaMortgage side, so we're making good progress on that process. Obviously, with mortgage, there's a it's a little bit more involved on the regulatory front relative to real estate. So we are working with all applicable state regulators to make, you know, a compliant transition. Once we receive regulatory approval from all states in compliance with all state law, we can move forward to a closing. We are hoping to close it in either late Q1 or early Q2, subject to those regulatory approvals and customary closing conditions of the deal. But our first priority, first and foremost, obviously, when you're dealing with a regulated industry like mortgage, we're following the process to make sure that's you know, closed in a compliant fashion.

15:16 The significant work, you know, happens before any transaction closes. Obviously, you know, the diligence before entering that deal was important. And, you know, a lot of planning is in place about how we will integrate systems and compliance and controls and the financial readiness for the reporting for the that additional business line. So that work is getting done and has been, you know, very efficient thus far. So we're looking forward to get to the closing table as soon as we can, again, subject to the regulatory approvals.

15:52 And just to comment on one other thing in terms of where we see the strategic value. Obviously, we've put out the press release originally when we entered into the definitive agreement. But the real place where we see the strategic value here is deepening our mortgage participation, adding that lending capability above and beyond the mortgage brokerage capability of reAlpha mortgage. And what that does for us as a company and for shareholders is it improves our economics. It you know, that deeper service participation, better workflow alignment allows us to capture greater value for every single mortgage transaction that we do. Thanks, Tom. And, yeah, just to elaborate a little bit on the regulatory component.

16:40 Not sure if everybody understands, but, you know, this is national play. You know, this is a state by state regulatory play. So, you know, InstaMortgage coming in with over 30 plus states, we have to work individually with each and every one of those states, and each and every one of those states have their own regulatory process that we need to go through. Some of them are a little bit more stringent than others, but we're getting through them and making great progress. And

17:09 we feel good about what lies ahead and can't wait for them to officially come on board when we close the transaction. You know, a lot of the heavy work begins there with the post M and A integration work. You know, we're starting to wrap up preview. So it's perfect for Insta Mortgage to come on at this point in time, and get them ready for home buying season, which is right in front of us now.

17:37 Great. And given that the company remains early stage, Tom, how are you thinking about the pathway to profitability? Yes. I I first and foremost, you know, growth is is on our minds. Growth is is, you know, a part of our core strategy. That's why we're adding, you know, acquisitions to the platform, integrating those to offer more services for customers and and grow that revenue line. But we believe we can, you know, work towards a path to profitability by bringing in more of these services, by being able to grow our LTV per customer. That gives us the leverage to get closer to profitability. So obviously, Mike and I both have mentioned disciplined growth, not a growth at all costs.

18:23 But there can be strategic ways of adding services to the platform that you know, can reduce our, you know, current burns and turn it, you know, to a one day be work towards a profitable company once we have assembled all of those puzzle pieces.

18:40 And, yeah, my view is, you know, growth and profitability are linked. You know, many times people say it's one or the other. But I think if you do it right, you know, as Tom mentioned, you know, as you're growing, and if you do it the right way, it is helping you get towards

18:57 and, you know, the way we're designing our platform, for example, right, with the integrations, the AI enabled workflows, you know, the coordination between the different services, you know, it makes us much more efficient. And as we continue to operate more efficiently and generate the additional revenues, leads towards profitability. So quality of growth is better than just speed alone, if you do it the right way. So, you know, we'll continue to focus on strengthening the platform. And then we say the probability profitability is an outcome. It's not a trade off. Awesome. And and Mike, I have a question for you, which is one of the themes that we've talked a lot about is the one reAlpha model. So bringing brokerage, mortgage, title, and AI altogether in a single workflow.

19:44 So where are you seeing the clearest evidence that this vertically integrated approach is improving the home buying experience today? And how do you see the platform evolving as more of these services become connected through a single buyer journey? Sure, Paul. We've stated that one core problem is buyers shouldn't have to act as project managers for their own home purchase. And this one reAlpha is really about removing the fragmentation and creating continuity across the real estate brokerage, mortgage title, and then infusing them with the AI tools. What we're seeing right now is early evidence is showing like better coordination,

20:30 cleaner communication with the customer, smoother handoffs, you know, between the steps. We're developing these tools like CLARE that the customers can use to interact with, to answer questions and help facilitate the transaction. We've created the Home Buying Hub as kind of like a, you know, a home base or one stop shopping where people can go and aggregate their information and, you know, have one place for them to go for a very easy way to get what they need and help them as they go through the process. And then, you know, we continue to align systems and workflows and processes behind the scenes. So, you know, we had the Preview acquisition that was in, you know, we're wrapping up the post M and A and, you know, as we are wrapping up regulatory, you know, components with InstaMortgage, that'll be next. So we'll be, you know, bringing in and integrating in that mortgage

21:29 lending or current mortgage brokerage process. And then we'll continue to go deeper and broader with this platform. You know, our long term goal has always been to make home buying simpler and smarter and more affordable for the home buyer.

21:47 Thanks, Mike. And as we look ahead, what are the key priorities for reAlpha as we continue scaling the platform, both operationally in the coming year and strategically as we build towards a longer term vision for the company? We're focused on expanding, you know, expanding into markets where buyers can access, obviously, the brokerage, mortgage and title and want coordinated experience. As many of you know, we're a little bit out of whack. I I I tend to say, when it comes to the states that we offer all three. So mortgage is obviously are are most prevalent where we're in, I believe, 32 states. The realty on the other hand is the 12 states in Washington DC, and the three.

22:34 So, you know, you guys could where we're heading here when it comes to expansion. We would try to sync them up at least at a minimum to to sync them up in in all three. You know, we wanna scale the home buying hub that and to understand our AI enabled to help people as they go from step to step throughout the process. We're not just trying to be another brokerage or a lender or a prop tech company. We really wanna build this through an online platform that is facilitated by Tom, do you want to add anything onto that as well? Yeah. Just from from a financial standpoint, I you know, we've mentioned it a few times already, but, you know, we wanna be focused on predictable growth rather than undisciplined growth.

23:43 And, you know, our priorities are focusing on control, visibility, and strong execution as this platform scales. We wanna make sure the infrastructure is is built over the the what we've built over the past several quarters in terms of systems and workflows. I think there was some technical difficulty there. So in terms of, you know, the, you know, infrastructure we've built over the past several quarters, you know, that's all been designed for growth. And so now as we continue to scale, I believe we have a lot of, you know, operating leverage, you know, to drive results for shareholders.

24:33 Okay. Thanks, everybody. And so if we do have any questions from the, community, we have a few minutes at the end here. If you wanna drop any questions down in the comments below, we can do that. I know we had, I know that man Billy had a few comments and questions as well, but he said that he believes we've already answered the questions that I've already submitted, so no need to reiterate. Thank you for the clarity today. Doing a great job. Thanks as always Billy for the questions. And if anybody else has anything, please put them below. Alright. Well, it looks like there are no further questions at the moment. So we'll go ahead and wrap up here.

25:32 Thank you for everyone for joining us today and spending this time with us. If you would like to stay informed about future airtime sessions and other publicly announced events, you can follow reAlpha on our official social channels and sign up for email alerts on our investor relations website at ir.realpha.com. That's where we post event notifications, replays, and our public disclosures. A recording of today's session will be available shortly, and thanks again. We look forward to continuing the conversation in future sessions. And as a reminder, if you do happen to have any questions, please you can feel free to reach out to us at [email protected]. Thank you so much. Have a great rest of your day. Thank you, everybody.

26:20 Thank you.