The Actual Brokerage Inc. (NASDAQ:REAX) Q1 2023 Earnings Convention Name Might 11, 2023 11:00 AM ET
Firm Contributors
Jason Lee – Vice President-Capital Markets and Investor Relations
Tamir Poleg – Chairman and Chief Govt Officer
Michelle Ressler – Chief Monetary Officer
Convention Name Contributors
Darren Aftahi – ROTH MKM
David Marsh – Singular Analysis
Wyatt Swanson – D. A. Davidson
Operator
Good morning, women and gents, and welcome to the Actual Brokerage First Quarter Earnings Name. Presently, all members have been positioned on a listen-only mode. And we are going to open the ground to your questions and feedback after the presentation.
I’ll now flip the decision over to Jason Lee, Vice President of Capital Markets and Investor Relations at The Actual Brokerage. Sir, the ground is yours.
Jason Lee
Good morning, everybody, and thanks for becoming a member of us at present for Actual’s first quarter 2023 earnings name. With me on the decision at present are Tamir Poleg, our Chairman and Chief Govt Officer; and Michelle Ressler, our Chief Monetary Officer. This morning, Actual filed its monetary statements and administration dialogue and evaluation for the primary quarter ended March 31, 2023, on SEDAR and EDGAR. These paperwork, together with the accompanying earnings press launch may be discovered on each SEDAR and EDGAR.
Earlier than I flip the decision over to Tamir, I’d prefer to remind everybody that the corporate might be making statements about its future outcomes and different forward-looking statements throughout this name. Our precise outcomes might differ materially from these forward-looking statements, and the danger components that might trigger these variations are detailed in our Canadian steady disclosure paperwork and SEC studies. Actual disclaims any intent or obligation to replace these forward-looking statements, besides as expressly required by legislation.
Now with that, I’d like to show the decision over to Chairman and Chief Govt Officer, Tamir Poleg. Tamir, please proceed.
Tamir Poleg
Good morning, and thanks Jason. Q1 of 2023 was a troublesome quarter for our {industry} as soon as once more, with elevated mortgage charges persevering with to weigh on affordability for patrons and U.S. present residence gross sales down 26% year-over-year and 16% quarter-over-quarter. In opposition to this troublesome backdrop, we’re happy to announce that Actual continued to see exceptionally sturdy progress.
Our income for the quarter was $108 million, a 75% year-over-year improve and 12% sequential progress from the prior quarter. January tends to be the slowest month in actual property, and we’re happy to report a robust consecutive income improve in each February and March.
Driving this income was our accelerating agent attraction. Throughout the quarter, our agent base grew to simply over 10,000 brokers, a 120% year-over-year improve. This represents a virtually 1,800 web addition, the most important improve in our firm historical past. Actually, we’ve seen a powerful acceleration in brokers selecting to hitch our platform, with almost 1,500 brokers added in This autumn and 1,100 in Q3. This progress drove an enchancment in transaction quantity, regardless of productiveness ranges which might be affected by the difficult housing market. Whole transaction sides improved 75% year-over-year to 10,963.
These outcomes come throughout a troublesome interval for brokers throughout the {industry}, as evidenced by shrinking agent bases at many different brokerages. What’s clear to us is that our agent attraction mannequin is working and our expertise and worth proposition is resonating with brokers that wish to achieve success. We’re seeing this anecdotally within the conversations we have now with our brokers and prospects, and in the end we’re seeing it within the variety of brokers which might be making the selection to hitch our platform.
Our achieve in market share has not gone unnoticed. I’m proud to report that we have been just lately acknowledged as a prime brokerage by RealTrends, T360, RISMedia, and HousingWire. We now have been working laborious to construct a tech-powered brokerage the place brokers are excited to hitch and thrive. Our inclusion in these rankings highlights the tempo of progress we have now skilled in only a few brief years, and we’re happy to have been acknowledged for our achievements.
On the geographic enlargement entrance, we launched operations in Delaware in Might, which strengthens our presence within the Mid-Atlantic area, and brings our complete state depend to 46. Additionally in Might, we expanded into Manitoba in Canada, rising our complete presence in that nation to 4 provinces, together with Alberta, Ontario and British Columbia.
Again in December, we introduced the addition of Sharran Srivatsaa as President of the corporate. He’s targeted on all points of progress, together with agent attraction and schooling. In April, we hosted our first REALx annual digital summit, a two-day agent occasion led by Sharran that assembled our {industry}’s finest thought leaders and impressed 1000’s of attendees. We additionally introduced our second annual agent convention known as RISE which is scheduled for October 22-24 in San Diego, California.
Now to the touch on some new merchandise and initiatives we’re enthusiastic about. The house shopping for expertise has been a spotlight for us in latest quarters. We perceive that the way forward for actual property lies in taking this very advanced course of of shopping for a house and wrapping it right into a single, effectively crafted, straightforward to grasp product.
As a part of bringing this imaginative and prescient to life, we might be launching an preliminary restricted beta model of our shopper dealing with app in a number of weeks, specializing in streamlining the mortgage utility course of. In a number of days, we can even be launching Fast14, a program that gives homebuyers with a assure that they are going to be cleared to shut on their mortgage inside 14 days of submitting their mortgage utility. We imagine that the knowledge offered by this program in addition to the pace to shut might be enticing to many patrons. We anticipate Fast14 to be embedded into our shopper dealing with app later this yr.
We delight ourselves on our nimble growth tradition, which is why we instantly acknowledged the revolutionary potential that latest advances in AI and machine studying fashions provide. This led us to announce the event of Leo earlier this month, a brand new AI digital assistant that might be absolutely built-in into our reZEN transaction administration platform that can reply agent questions in actual time 24/7, leveraging Actual’s intensive proprietary data base to create a very custom-made expertise. This can save time for our brokers and make our already lean assist group much more environment friendly, which basically aligns with our core philosophy of turning into the premier brokerage by constructing scalable options for our brokers. We anticipate to roll out an preliminary model for testing by the tip of Q2.
We’re additionally pleased to announce on this name that at present we have now launched Actual Signature to all of our brokers, a proprietary digital signature device constructed absolutely inside reZEN. This characteristic will profit brokers by permitting them to save lots of time by creating doc templates for future transactions and to save cash by avoiding third-party subscription charges. Additional, by growing this device in-house, we can even personal the entire information related to the transaction expertise which we are able to leverage to higher automate the transaction course of and create higher consumer experiences over the long run. It is a crucial constructing block of the one-stop store shopper product we’re growing.
Subsequent to the tip of the quarter, on April 4, we introduced Sentry Residential merged its military-focused nationwide brokerage into Actual, including to Actual’s present 500-plus military-focused brokers. Actual plans to leverage our rising presence to launch a Actual Navy Division, the primary of a number of deliberate divisions of follow. This can be a nice milestone for the corporate as we create a specialised pillar of our group to deal with navy veterans and their shoppers.
On our prior earnings name, we have been optimistic that This autumn was the underside for us given file open transaction quantity on our platform in early 2023. As of at present, our open transaction quantity has reached new information as soon as once more as we enter the seasonally busiest time of the yr in our {industry}. In consequence, we’re assured that the large market share progress and the just lately introduced adjustments to our mannequin may have a rising influence on our financials. We imagine these may have an much more vital impact as per agent productiveness accelerates with elevated macro surroundings stabilization, as our platform now boasts significantly extra brokers.
We stay targeted on aggressively gaining sturdy market share by offering the most effective ecosystem for brokers. Given our accelerating efficiency and the progress witnessed to date this quarter, we now anticipate to succeed in our aim of turning into adjusted EBITDA worthwhile in Q2, sooner than our prior goal of reaching adjusted EBITDA profitability within the second half of 2023. As we scale our title and mortgage companies, we proceed to put the foundations for an industry-changing shopper expertise and can start testing preliminary variations of a consumer-focused utility with a choose group of brokers and shoppers early within the second half of 2023 that can characteristic mortgage pre-approval. Whereas we anticipate that it’ll take one other yr to iterate to a full consumer-facing product, we wish to prioritize rising sustainably whereas executing our long-term imaginative and prescient.
And with that, I’ll flip it over to Michelle for the monetary replace.
Michelle Ressler
Thanks, Tamir, and thanks, everybody, for becoming a member of us. I’ll begin by reviewing a few of our key monetary outcomes for the primary quarter. For the quarter ended March 31, the whole worth of properties transacted over our platform reached $4 billion, which represents a 66% improve in comparison with the identical interval in 2022. The entire variety of transactions on our platform through the quarter elevated to 10,963, a 75% year-over-year improve. The median sale value of properties bought by our brokers was $350,000, which represents a modest 1.4% improve in comparison with Q1 2022.
As Tamir talked about, whereas many different brokerages in our {industry} are struggling, we’re happy with the spectacular progress we’re witnessing. Income elevated to $108 million, a 75% improve in contrast with Q1 2022. In the meantime, gross revenue elevated 84% year-over-year to $10.8 million. Our gross margin expanded to 10%, up from 9.5% in Q1 2022. The rise was pushed by a continued drop within the proportion of brokers which have reached their cap, which is a results of the commonly decrease market exercise in comparison with prior durations.
As of March 31, 2023, 8.2% of our brokers had exceeded their cap, down from 8.9% on the finish of 2022. The capped cohort represented 43% of fee income in Q1, in comparison with 44% in This autumn 2022. The improved margin additionally displays our agent progress and a few preliminary influence from the elevated payment construction. As a reminder we elevated our U.S. charges for brand new brokers starting on February 1 and for present brokers on April 1. The vast majority of these adjustments will start to influence our financials extra materially starting in Q2.
Wanting on the geographies we function in, 8.2% of our U.S. brokers ended the quarter with capped standing, down marginally from 8.5% in This autumn. Our Canadian capped brokers skilled a extra significant drop, with 7.9% ending the quarter with capped standing versus 14.1% on the finish of This autumn.
We imagine this displays the extra acute downturn within the Canadian residential actual property market. Canada residential gross sales exercise in Q1 was 38% decrease and common sale value was 17% decrease year-over-year in keeping with the Canadian Actual Property Affiliation. This compares with a 26% quantity and 1% value drop to U.S. present residence gross sales figures over the identical interval, as reported by the Nationwide Affiliation of Realtors.
Nonetheless, Canada represents simply 9% of our brokers, up barely from 8% as of This autumn. Canada represented 11% of fee income in Q1, a decline in comparison with 14% in This autumn and 13% in Q1 2022.
Our highest-earning Elite Brokers on the finish of the quarter declined to 0.5% of our agent base, in comparison with 0.9% within the prior quarter. These brokers have been answerable for producing 8.5% of complete fee income, down notably from 12.7%. The necessities to attain and keep Elite standing are reserved for our best brokers, and a sustained interval of market weak spot is clear on this decline.
Total, we imagine Actual continues to be the profitable resolution for productive brokers seeking to be as environment friendly as doable, even throughout a market downshift. In Q1, 59% of fee income was generated by our brokers representing the buy-side, 36% was on the sell-side, and 5% was from dual-agency illustration. That is primarily unchanged from the identical quarter in 2021, and doesn’t embrace income that we ebook associated to agent referrals, which accounts for about 2% of the general complete.
Fee income per productive agent, a core measure of agent productiveness, moderated to $26,000 in Q1 from $27,200 in This autumn and $29,400 in Q1 2022. The variety of transactions closed by this cohort eased to 2.7 from 2.8 in This autumn and three in Q1 2022. To strip out the impact of recent brokers becoming a member of, we additionally monitor the fee income per productive agent already on our platform firstly of the quarter.
That is much like a same-store gross sales determine reported by the retail {industry}. For these present brokers, the typical fee income in Q1 was $29,800 in comparison with $30,300 in This autumn, and the variety of transactions closed by the present agent cohort held regular quarter-over-quarter at 3.1 which provides us confidence that productiveness is stabilizing.
The decrease productiveness total is basically an element of the macro-economic surroundings, and our agent progress has greater than offset the influence. We sit up for recognizing the complete monetary influence ensuing from the massive inflow of brokers we skilled in Q1.
Regardless of heightened progress throughout the board, we did expertise a slight uptick within the variety of brokers that left our platform. Our income churn, which we outline because the greenback quantity generated by churned brokers over the prior two quarters, rose to 4.3% in comparison with 2.4% in This autumn. In the meantime our agent churn elevated to eight.3% from 4.4% in This autumn. Nonetheless, a part of the uptick is expounded to beforehand introduced will increase to sure charges paid by our brokers that resulted in some brokers selecting to go away the platform.
Whereas that is regrettable, I wish to reiterate that we made these adjustments with intensive enter from our brokers and the churn we skilled because of this was successfully contained to simply two notable groups and occurred primarily in January and February.
Moreover, there’s a seasonal element to churn and a few of that is associated to what’s occurring extra broadly within the {industry}, whilst our platform progress greater than offsets it. Nonetheless, we monitor this intently and are actively working to enhance our coaching applications to higher cut back churn.
Shifting over to OpEx. Our complete working prices for the quarter, together with income share, have been $17.8 million. This represents 16.5% of income, in contrast with 16.4% in Q1 2022. Our working expense per transaction, excluding income share, which is a core element of our agent incentives, declined 5% year-over-year to $1,132. We proceed to be laser-focused on optimizing our already environment friendly price construction given {industry} headwinds, and consistent with our aim of reaching constructive adjusted EBITDA in Q2 of this yr as Tamir had talked about.
Our income share, which is our largest single working price, was $5.4 million, or 5% of income for the quarter in comparison with 4.4% in Q1 2022. Nonetheless, the income share expense per agent was $543, down 9% from $594 in Q1 of 2022. This expense is very delicate to the expansion of our agent base, and particularly the expansion of productive sponsorship timber as our sponsoring brokers are extremely incentivized to nurture the brokers of their downlines to unlock this system tiers. We deal with this as a advertising expense however notice that we imagine the advantage of our sponsorship construction not solely helps appeal to new brokers, but in addition drives retention and better productiveness throughout our platforms.
Our headcount effectivity ratio, which we outline as full-time brokerage staff excluding Actual Title and LemonBrew staff divided by the variety of brokers which might be presently on our platform, continued to enhance, rising to round 1 to 114, from 1 to 98 as of This autumn. The upcoming roll-out of our digital assistant Leo is anticipated to assist drive this ratio larger.
As anticipated, our transaction processing group continues to execute on additional enhancements at scale. Our 9 staff supporting this operate processed the almost 11,000 transactions that closed on our platform through the quarter, or 1,218 transactions per worker. We anticipate to have the ability to proceed to scale up materially with out vital headcount additions.
We imagine these metrics finest spotlight the effectivity and scalability of our platform that’s made doable by the energy of our tech stack. We imagine that is in the end one of many largest aggressive benefits for our enterprise, and this may develop into much more obvious as we proceed to scale.
Actual’s web loss for the quarter was $7.4 million in comparison with $4.3 million in Q1 of 2022, translating to a loss per share of $0.04 in comparison with a $0.03 loss per share for a similar interval in 2022.
Adjusted EBITDA loss for the quarter was recorded at $792,000, in comparison with a $577,000 loss in Q1 of 2022. Word that we revised the methodology for reporting this metric, which now provides again the non-cash expense related to shares allotted to our brokers in reference to Actual’s share buy program. For extra data on the adjustments and historic influence please reference the abstract desk in our Administration Dialogue and Evaluation report that has been filed and likewise posted on the Investor Relations part of our web site.
Turning to our monetary place, we had $11 million in un-restricted money on the stability sheet and a further $8.5 million in short-term investments to deliver our complete liquidity to $19.5 million as of March 31, 2023. This represents a $728,000 improve from This autumn. We proceed to haven’t any debt and no want to lift debt within the near-term.
In conclusion, we anticipate a robust pick-up in our monetary outcomes going ahead, and as such we’re revising our previously-communicated goal of reaching adjusted EBITDA profitability within the second half of this yr. We now trust that we’ll attain this milestone within the present quarter. This conviction components within the influence from our new payment construction, our accelerating agent progress, seasonal tailwinds selecting up, and the operational efficiencies we’ve constructed into our platform. We’re excited on the progress we skilled over the quarter and are much more excited for what’s to come back as we work to usher in the way forward for actual property.
This concludes my monetary remarks. I’ll now ask the operator to open up the road for Q&A. Operator, are you able to please ballot for questions?
Query-and-Reply Session
Operator
Actually. Girls and gents, the ground is now open for questions. [Operator Instructions] Your first query is coming from Darren Aftahi from ROTH MKM. Your line is stay.
Darren Aftahi
Hey guys, good morning. Thanks for taking my questions and good job on the outcomes. I’ve form of two massive image questions right here. First, simply the productiveness per agent, I feel was 2.7 within the quarter and I feel you mentioned individuals on the platform was 3 to three.1 which was flat year-on-year. So in gentle of how poorly a few of your friends are doing, I suppose my query is you scaled the enterprise pretty shortly from a whole lot of brokers to now 10,000. As you scale from 10,000 to 50,000, [ph] how does that productiveness measure in your thoughts form of transfer round and I suppose extra near-term, do you’re feeling like that transaction per agent quantity is perhaps troughed for the intermediate time period?
Tamir Poleg
Hello, Darren. Thanks. I feel that as an organization we’re targeted on manufacturing versus simply agent depend. So I feel that these productiveness metrics are sustainable as we develop to 10s of 1000s of brokers. Clearly, there might be a little bit little bit of motion right here or there, however I feel that these numbers are the numbers that we are literally specializing in usually as an organization. So I anticipate us to proceed and publish any such productiveness per agent simply because we’re targeted on having productive brokers on the platform and serving to them shut offers.
Darren Aftahi
Nice. After which may you simply converse to the overall macro, a minimum of in among the greater markets that you simply’re in? And perhaps form of evaluate the trailing 12 quarters or excuse me, 4 quarters and form of how the motion in your corporation like do you suppose, if I’m listening to you appropriately, it appears like, and I do know issues choose up within the Springtime, however other than that dynamic, the broader macro, do you’re feeling like we backside? There’s nonetheless not sufficient stock like how do you’re feeling typically in regards to the broader macro?
Tamir Poleg
Certain. I feel we got here into 2023 fairly cautious in regards to the macro surroundings of the actual property area typically. And what we’ve seen is that proper now the market has stabilized. I feel that we bottomed within the fourth quarter. We’re seeing quite a lot of the identical phenomenon that we have now seen within the first half of 2022 of bidding mores and a number of provide conditions. We’re seeing very sturdy demand in lots of, many markets. Clearly, there are some softer markets, however I feel that total this might be an important Spring season for the actual property typically.
Darren Aftahi
If I can squeeze one.
Tamir Poleg
Go forward.
Darren Aftahi
I used to be simply going to squeeze one final one in. Simply in gentle of your feedback about EBITDA being pulled ahead 1 / 4 on a constructive foundation, are you able to simply speak in regards to the connect charge for – Title, which I feel is now Actual Title and LemonBrew and the way that’s going to influence connect charges and the way that form of impacts the profitability of the enterprise going ahead? Thanks.
Tamir Poleg
Certain. At this level, these ancillary providers nonetheless should not have significant contribution to our margins or our income typically. By way of Actual Title, what we’re seeing is that we’re experiencing nice success on the JVs, these buildings that enable our brokers to develop into companions in Title firm and people JVs, we have now about 300 brokers in the meanwhile, and we see connect charges of round 70%, which is tremendous excessive. We at the moment are increasing these JVs to seven further states. So we anticipate Actual Title to proceed and develop income and finally have a significant influence on our margins and financials. However after we speak in regards to the adjusted EBITDA profitability, that is primarily based mostly on the brokerage efficiency at this level, and clearly as mortgage and title kick in, then it’s going to have an much more constructive impact.
Darren Aftahi
It’s useful. Thanks.
Operator
Thanks. Your subsequent query is coming from David Marsh from Singular Analysis. Your line is stay.
David Marsh
Hello, guys. Thanks for taking the questions. First on the SG&A facet, have been there any nonrecurring gadgets within the SG&A line within the quarter?
Michelle Ressler
Hello, thanks for becoming a member of at present. Thanks to your query. No, usually, our OpEx is fairly sustainable quarter-over-quarter. There have been no non-recurring gadgets that we reported.
David Marsh
Okay. Will the money working bills average in any respect all through the rest of the yr or is this sort of like a brand new run charge form of stage that we must always anticipate as we’re shifting ahead?
Michelle Ressler
Sure, nice query. There’s a seasonal element to our OpEx. Sometimes, the primary quarter is larger. So in Q1, it was 16.5% of income. Nonetheless, in the event you take a look at 2022, our OpEx dipped in Q2 and Q3 to 12% and 11.5%. So the whole for 2023 was 13.5% and it displays our working leverage kicking in all through the busiest occasions of the yr. We will anticipate the identical developments for 2023.
David Marsh
Good. That’s actually useful. After which simply with regard to the macro surroundings and kind of the banking, the banking state of affairs within the U.S. Have you ever guys seen a serious pullback by any of the banking sector by way of their willingness to lend? Or is it usually enterprise as ordinary? Or may you discuss perhaps you can even speak in regards to the unfold for mounted charge loans form of over the 10-year looks as if it’s hovering a little bit bit larger than it traditionally has and maybe what may drive that again down in the direction of like a 200 foundation level kind unfold that we’ve sometimes seen?
Tamir Poleg
Certain. I’d say that what we’re experiencing on the mortgage facet or financing facet is just about enterprise as ordinary. We haven’t seen any pullback from main lenders. We haven’t additionally seen an uptick in terminated contracts because of issues with financing. I feel that patrons have quite a lot of options proper now and there’s nonetheless cash on the market trying to enter the housing market. So I feel that the banking disaster has not impacted residential actual property but, a minimum of not for the typical purchaser. Possibly for traders, I feel that positive I imply there’s extra danger and the danger is factored in and that is mirrored within the spreads in the meanwhile. However as traders’ confidence in actual property comes again and as soon as individuals perceive that actual property is steady and there’s quite a lot of demand and persons are nonetheless transacting. I feel that these spreads will return to traditionally common or regular. So I feel that we’re not too removed from that occuring in perhaps a number of weeks to some months.
David Marsh
That’s actually useful shade, Tamir. I admire that. Simply final one from me. Only a fast little housekeeping merchandise in your CapEx actually, actually low solely like $140,000 of PP&E purchases within the quarter. Might you give us an expectation to your PP&E purchases for the stability of the yr, simply by way of your capital price range?
Michelle Ressler
Certain. So nearly all of that displays capitalized R&D bills all through our growth part. We don’t anticipate that to extend materially. You possibly can anticipate the identical run charge for the rest of the yr.
David Marsh
Nice. That’s all from me. Thanks guys.
Tamir Poleg
Thanks.
Operator
Thanks. [Operator Instructions]. Your subsequent query is coming from Tom White from D.A. Davidson. Your line is stay.
Wyatt Swanson
Hey, that is Wyatt Swanson on for Tom. Thanks for taking our questions. I’ve one associated to the general agent worth proposition and also you drove almost 1,800 brokers to the platform this quarter, which is nice, however considering extra over the subsequent few years, may you perhaps discuss the way you anticipate the general agent worth prop evolves and improves to proceed including worth and attracting brokers to the platform?
Tamir Poleg
Certain. Hello, Wyatt. Thanks for the query. I feel that total, when you concentrate on the the explanation why brokers be a part of us, we are able to see – we are able to take a look at a number of issues. One is the favorable economics. Second is the expertise that we provide them and assist them run their companies and streamline transaction. The third is tradition, which could be very particular right here and attracts quite a lot of brokers as a result of there’s quite a lot of collaboration versus competitors. And the fourth can be monetary alternatives. I feel that we repeatedly add an increasing number of worth by means of expertise. So simply this morning we introduced Actual Signature, which is a system that permits brokers to create doc templates and ship them for evaluate and signature for his or her shoppers and that saves them quite a lot of money and time.
We additionally introduced willable rev share, which is the power for brokers to really nominate a beneficiary for his or her income – rev share element if they’ve one. And if one thing occurs to them, then we are going to proceed to pay their household. So we repeatedly add an increasing number of worth to the platform and I feel that that can proceed and resonate with quite a lot of brokers and can proceed to assist us with rising the agent depend on the platform. And as we’re presently seeing, we’re the quickest rising firm within the {industry}. We’re the one firm that really posted income progress year-over-year. And I feel that if we take a look at the approaching years, the variety of brokers will solely improve.
Wyatt Swanson
Nice. Thanks for that shade. After which perhaps a follow-up on how Actual Brokerage can ensure that it capitalizes. In relation to the smaller impartial brokerages on the market that is likely to be struggling to remain afloat given the market slowdown, how may you profit from bringing their enterprise over to your platform?
Tamir Poleg
Good query. And we’re, the truth is, engaged in quite a lot of conversations with small and medium sized brokerages, of us which might be closing 100s of thousands and thousands of {dollars} in quantity to over $1 billion. What occurs in the meanwhile is that they’re closing fewer transactions they usually nonetheless have quite a lot of mounted price. And the advantage of becoming a member of Actual is simply offering extra worth to their brokers. We take away a few of their mounted price, we streamline their transactions and we simply enable them to function extra effectively.
In order that drives quite a lot of consideration and conversations in the meanwhile. And I feel that we’ll proceed to onboard an increasing number of brokerages. Clearly, we’re not spending cash on acquisition of brokerages. So we don’t have interaction in M&A exercise for money or fairness. We simply suppose that the worth proposition will appeal to them to us. And we are literally seeing that in motion proper now, additionally due to the market circumstances.
Wyatt Swanson
Nice, thanks very a lot.
Operator
Thanks very a lot. Mr. Lee, there seems to be no additional questions.
Jason Lee
Thanks. In case you have any further questions on at present’s earnings launch, please be at liberty to contact me straight. Operator, would you please give the convention name replay directions as soon as once more. Thanks.
Operator
Completely. With the intention to entry the replay, you must name 877-481-4010 with a affirmation code of 48269. As soon as once more, the cellphone quantity is 877-481-4010 with affirmation code of 48269. The replay might be out there at 02:00 p.m. Jap at present. Girls and gents, this does conclude at present’s convention name. You might disconnect your cellphone traces at the moment and have a beautiful day. Thanks to your participation.