| Segment Information |
15. Segment Information The Company identifies an operating segment as a component of the business (i) that engages in business activities from which it may earn revenues and incur expenses, (ii) that has discrete financial information available, and (iii) whose operating results are regularly reviewed by the Company's Chief Operating Decision Maker (the “CODM”) to assess performance and allocate resources. In connection with the Transaction, on August 24, 2026, the Company realigned its operating segments to reflect how the CODM, who is the Company’s Chief Executive Officer, allocates resources and assesses performance. Segment information is prepared on the same basis used by the CODM to manage the business and make decisions regarding resource allocation and performance evaluation. Based on this assessment, the Company has identified two reportable segments, Brokerage and Franchise, with its remaining business activities presented within Other: | ● | Brokerage – generates revenue by processing real estate transactions, which entitles the Company to earn commissions. |
| ● | Franchise – comprises the operations of the Company’s owned and independent global franchising operations under the REMAX brand along with Marketing Funds associated with the REMAX brand. These Marketing Funds support REMAX brand marketing campaigns designed to build and maintain brand awareness and the development and operation of agent marketing technology. Marketing Funds are contractually restricted for designated marketing and technology purposes, and related revenues and expenses are included within the Franchise segment. |
| ● | Other – includes the Company’s remaining business activities, as described below: |
| o | One Real Title – generates revenue by offering title insurance and closing services for residential and commercial transactions. |
| o | One Real Mortgage – generates revenue from origination fees earned in connection with facilitating mortgage transactions between borrowers and lenders. |
| o | Real Wallet - generates revenue from interchange fees on Company-branded debit cards, interest income on certain deposit accounts, and interest income and various fees associated with business loans. |
| o | Motto Mortgage – comprises the operations of the Company’s mortgage brokerage franchise operations under the Motto brand. The Company is no longer selling new Motto mortgage franchises. |
| o | wemlo loan processing – generates revenue from mortgage loan processing services through the Motto network and other third parties. |
Once operating segments are identified, the Company evaluates each segment using both quantitative and qualitative analysis, including current and historical revenue and profitability for each operating segment, to determine whether the segments have similar operating characteristics and whether they meet the criteria for separate disclosure under ASC 280, Segment Reporting. Based on this evaluation, the Company has determined that it has two reportable segments – Brokerage and Franchise, each of which meets the quantitative thresholds for separate disclosure under ASC 280-10-50-12 and which collectively comprise more than 90% of the Company’s total revenue and income (loss) from operations. Other business activities that do not meet the quantitative thresholds for separate disclosure under ASC 280 are included within "Other”, which comprises the activities described above. Prior period segment information has been recast to conform to the current segment presentation. Comparative periods reflect the historical operations of Real and exclude REMAX operations prior to the acquisition date. The CODM evaluates segment performance and allocates resources based on segment revenues and segment adjusted earnings before interest, income taxes, depreciation and amortization and other non-cash and non-recurring cash charges or other items (“Adjusted EBITDA”). The CODM uses Adjusted EBITDA, including by comparing actual results to budgeted and forecasted results, to assess the performance of each segment, identify trends affecting the segments, develop forecasts and make operating and capital allocation decisions, including the allocation of resources among the segments. Asset and other balance sheet information is not reported to the CODM. Adjusted EBITDA is a non-GAAP measure of financial performance that differs from U.S. GAAP, and the Company’s presentation of Adjusted EBITDA may not be comparable to similarly titled measures used by other companies. Except for the adjustments identified below in arriving at Adjusted EBITDA, all segments follow the same basis of presentation and accounting policies as those described throughout the notes to the interim condensed consolidated financial statements and as included herein. See Note 2, Summary of Significant Accounting Policies, for additional information. The following tables present revenue and significant expense categories included in the determination of segment Adjusted EBITDA (in thousands). The table also includes a reconciliation of segment Adjusted EBITDA to Net Loss (in thousands): | | | | | | | | | | | | | | | For the Three Months Ended September 30, 2026 | | | Brokerage (a) | | Franchise | | Other | | Total | Revenue | | $ | 695,499 | | $ | 27,098 | | $ | 5,331 | | $ | 727,928 | Less: | | | | | | | | | | | | | Cost of Sales | | | 631,121 | | | 51 | | | 1,158 | | | 632,330 | General and administrative expenses | | | 13,147 | | | 5,860 | | | 4,631 | | | 23,638 | Marketing expenses | | | 20,046 | | | 1,134 | | | 604 | | | 21,784 | Marketing funds expenses (b) | | | — | | | 6,672 | | | 45 | | | 6,717 | Research and development expenses | | | 4,523 | | | 973 | | | 328 | | | 5,824 | Other income (expenses), net | | | (111) | | | 624 | | | (66) | | | 447 | Segment Adjusted EBITDA | | $ | 26,773 | | $ | 11,784 | | $ | (1,369) | | $ | 37,188 | Reconciliation of segment adjusted EBITDA to loss before tax | | | | | | | | | | | | | Unallocated costs (c) | | | | | | | | | | | | (3,434) | Stock-based compensation - excluding cost of sales (d) | | | | | | | | | | | | (35,775) | Stock-based compensation - cost of sales | | | | | | | | | | | | (13,842) | Depreciation and amortization | | | | | | | | | | | | (3,577) | Settlement of litigation and impairment charges | | | | | | | | | | | | (276) | Loss on extinguishment of debt and bridge commitment fees (e) | | | | | | | | | | | | (5,246) | Restructuring expense | | | | | | | | | | | | (448) | Acquisition-related severance expense (f) | | | | | | | | | | | | (23,708) | Other acquisition-related expenses (g) | | | | | | | | | | | | (28,624) | Other adjustments | | | | | | | | | | | | 249 | Interest expense | | | | | | | | | | | | (5,920) | Loss before tax | | | | | | | | | | | $ | (83,413) |
| (a) | As of September 30, 2026, approximately $19.6 million of Revenue share expenses were recorded in the Brokerage segment. |
| (b) | Marketing fund expenses are comprised of the Company’s Franchise marketing campaigns designed to build and maintain brand awareness and the development and operation of franchise agent marketing technology. The Marketing Funds operate at no profit and are included in the Franchise segment. See Note 2, Summary of Significant Accounting Policies, for additional information. |
| (c) | As of September 30, 2026, Unallocated costs is not considered a reportable segment and is primarily included in General and administrative expenses. |
| (d) | Includes $27.2 million primarily related to accelerated vestings as a result of the Transaction. |
| (e) | Mainly represents the write off of bridge loan commitment fees during the three months ended September 30, 2026. |
| (f) | Severance and personnel- related expenses related to the Transaction. |
| (g) | These expenses consisted of professional services, consulting, legal, investment banking, and other transaction-related costs. |
| | For the Three Months Ended September 30, 2025 | | | Brokerage (a) | | Franchise | | Other | | Total | Revenue | | $ | 565,307 | | $ | — | | $ | 3,242 | | $ | 568,549 | Less: | | | | | | | | | | | | | Cost of Sales | | | 510,009 | | | — | | | 1,128 | | | 511,137 | General and administrative expenses | | | 11,673 | | | — | | | 2,824 | | | 14,497 | Marketing expenses | | | 17,003 | | | — | | | 39 | | | 17,042 | Research and development expenses | | | 4,133 | | | — | | | 51 | | | 4,184 | Other income (expenses), net | | | (146) | | | — | | | (35) | | | (181) | Segment Adjusted EBITDA | | $ | 22,635 | | $ | — | | $ | (765) | | $ | 21,870 | Reconciliation of segment adjusted EBITDA to loss before tax | | | | | | | | | | | | | Unallocated costs (b) | | | | | | | | | | | | (1,499) | Stock-based compensation - excluding cost of sales | | | | | | | | | | | | (7,357) | Stock-based compensation - cost of sales | | | | | | | | | | | | (12,555) | Depreciation and amortization | | | | | | | | | | | | (567) | Other adjustments | | | | | | | | | | | | (138) | Interest expense | | | | | | | | | | | | 55 | Loss before tax | | | | | | | | | | | $ | (191) |
| (a) | As of September 30, 2026, approximately $15.7 million of Revenue share expenses were recorded in the Brokerage segment. |
| (b) | As of September 30, 2026, Unallocated costs is not considered a reportable segment and is primarily included in General and administrative expenses. |
| | | | | | | | | | | | | | | For the Nine Months Ended September 30, 2026 | | | Brokerage (a) | | Franchise | | Other | | Total | Revenue | | $ | 1,854,425 | | $ | 27,098 | | $ | 12,531 | | $ | 1,894,054 | Less: | | | | | | | | | | | | | Cost of Sales | | | 1,670,208 | | | 51 | | | 3,720 | | | 1,673,979 | General and administrative expenses | | | 37,585 | | | 5,860 | | | 10,331 | | | 53,776 | Marketing expenses | | | 59,974 | | | 1,134 | | | 751 | | | 61,859 | Marketing funds expenses (b) | | | — | | | 6,672 | | | 45 | | | 6,717 | Research and development expenses | | | 13,588 | | | 973 | | | 453 | | | 15,014 | Other income (expenses), net | | | (273) | | | 624 | | | (202) | | | 149 | Segment Adjusted EBITDA | | $ | 73,343 | | $ | 11,784 | | $ | (2,567) | | $ | 82,560 | Reconciliation of segment adjusted EBITDA to loss before tax | | | | | | | | | | | | | Unallocated costs (c) | | | | | | | | | | | | (6,324) | Stock-based compensation - excluding cost of sales | | | | | | | | | | | | (50,514) | Stock-based compensation - cost of sales | | | | | | | | | | | | (37,908) | Depreciation and amortization | | | | | | | | | | | | (4,705) | Settlement of litigation and impairment charges (d) | | | | | | | | | | | | (385) | Loss on extinguishment of debt and bridge commitment fees (e) | | | | | | | | | | | | (5,246) | Restructuring expense | | | | | | | | | | | | (1,161) | Acquisition-related severance expense (f) | | | | | | | | | | | | (23,708) | Other acquisition-related expenses (g) | | | | | | | | | | | | (40,518) | Other adjustments | | | | | | | | | | | | 201 | Interest expense | | | | | | | | | | | | (6,588) | Loss before tax | | | | | | | | | | | $ | (94,296) |
| (a) | As of September 30, 2026, approximately $57.2 million of Revenue share expenses were recorded in the Brokerage segment. |
| (b) | Marketing fund expenses are comprised of the Company’s Franchise marketing campaigns designed to build and maintain brand awareness and the development and operation of franchise agent marketing technology. The Marketing Funds operate at no profit and are included in the Franchise segment. See Note 2, Summary of Significant Accounting Policies, for additional information. |
| (c) | As of September 30, 2026, Unallocated costs is not considered a reportable segment and is primarily included in General and administrative expenses. |
| (d) | Litigation settlement charges. See Note 14, Commitments and Contingencies for additional information. |
| (e) | Mainly represents the write off of bridge loan commitment fees during the nine months ended September 30, 2026 |
| (f) | Severance and personnel-related expense related to the Transaction. |
| (g) | These expenses consisted of professional services, consulting, legal, investment banking, and other transaction-related costs. |
| | | | | | | | | | | | | | | For the Nine Months Ended September 30, 2025 | | | Brokerage (a) | | Franchise | | Other | | Total | Revenue | | $ | 1,454,501 | | $ | — | | $ | 8,776 | | $ | 1,463,277 | Less: | | | | | | | | | | | | | Cost of Sales | | | 1,300,793 | | | — | | | 3,074 | | | 1,303,867 | General and administrative expenses | | | 35,062 | | | — | | | 8,938 | | | 44,000 | Marketing expenses | | | 51,045 | | | — | | | 168 | | | 51,213 | Research and development expenses | | | 11,163 | | | — | | | 156 | | | 11,319 | Other income (expenses), net | | | (2,402) | | | — | | | (91) | | | (2,493) | Segment Adjusted EBITDA | | $ | 58,840 | | $ | — | | $ | (3,469) | | $ | 55,371 | Reconciliation of segment adjusted EBITDA to loss before tax | | | | | | | | | | | | | Unallocated costs (b) | | | | | | | | | | | | (6,681) | Stock-based compensation - excluding cost of sales | | | | | | | | | | | | (17,657) | Stock-based compensation - cost of sales | | | | | | | | | | | | (32,757) | Depreciation and amortization | | | | | | | | | | | | (1,344) | Settlement of litigation and impairment charges | | | | | | | | | | | | (27) | Restructuring expense | | | | | | | | | | | | (250) | Other adjustments | | | | | | | | | | | | (583) | Interest expense | | | | | | | | | | | | 166 | Loss before tax | | | | | | | | | | | $ | (3,762) |
| (a) | As of September 30, 2026, approximately $45.9 million of Revenue share expenses were recorded in the Brokerage segment |
| (b) | As of September 30, 2026, Unallocated costs is not considered a reportable segment and is included in General and administrative expenses. |
Segment revenue reported above represents revenue generated from external customers. Intersegment shared service allocations represent charges to Brokerage, Franchise and Other from the unallocated costs for centralized support functions, including executive leadership, finance, accounting, legal, human resources, information technology, facilities and other administrative services. These costs are allocated to the operating segments using methodologies that management believes are representative of the services provided, including relative revenue, headcount, usage metrics, or other applicable allocation drivers. Such allocations are reflected in the operating results reviewed by the CODM and are included in segment profit or loss.
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