Douglas Elliman Inc. Reports First Quarter 2024 Financial Results
Douglas Elliman Inc. reported first quarter 2024 financial results with consolidated revenues of $200.2 million and a net loss of $41.5 million attributed to Douglas Elliman. The real estate brokerage segment reported a gross transaction value of $7.1 billion and an average price per transaction of $1.595 million. The company also disclosed a $17.75 million litigation settlement charge impacting operating and net income. Adjusted EBITDA showed a loss of $18.2 million attributed to Douglas Elliman and a loss of $14.2 million for the real estate brokerage segment. The company's balance sheet maintained strong cash and cash equivalents of $91.5 million at the end of the quarter.
Douglas Elliman Inc. saw encouraging market signals and successfully reduced costs while maintaining agent experience and enhancing its competitive edge.
The Development Marketing business displayed promising momentum with a robust project pipeline totaling approximately $25 billion in gross transaction value, indicating potential long-term growth.
The company reported a consolidated operating loss of $41.5 million, including a $17.75 million litigation settlement charge, impacting financial results for the quarter.
Adjusted EBITDA showed losses of $18.2 million for Douglas Elliman and $14.2 million for the real estate brokerage segment compared to the previous year, indicating financial challenges.
Insights
Looking at Douglas Elliman's first-quarter results, a notable decline in consolidated revenues and an increase in operating loss are apparent. This, coupled with a significant litigation settlement charge, underscores a challenging period for the company. The decline in gross transaction value, albeit slight, suggests a cooling in the real estate market, which could signal a trend investors should monitor. The reported average price per transaction remains robust, indicating that while volume may be down, the value per sale is holding steady.
Adjusted EBITDA, a key indicator of underlying business performance, shows a continued loss, but only marginally worse than the previous year. It's important to note the impact of non-recurring items such as litigation charges when assessing net loss figures. While the company has a strong balance sheet with a healthy cash position, the continued losses are a concern and could affect the company's future operations and strategic flexibility.
The real estate sector, as a reflection of Douglas Elliman's performance, seems to be experiencing market headwinds. While management's optimism regarding cost reductions and the strength of the brand is noteworthy, the numbers reflect a company facing the brunt of a challenging market cycle. The development marketing business appears to be a bright spot, with a robust pipeline that could be key for future growth. However, investors should consider the market sensitivity of the real estate sector, which is subject to fluctuations in interest rates, economic conditions and consumer confidence.
Given the mixed signals, it is essential for investors to weigh the company's strategic initiatives against the backdrop of market conditions. Long-term value creation may hinge on the company's ability to navigate market challenges and capitalize on its pipeline of projects.
The significant litigation settlement is a material event that has notably impacted Douglas Elliman's quarterly results. Litigation settlements can be indicative of risk management issues within a company and represent a drain on financial resources. While the settlement resolves a legal dispute, the contingent payments suggest ongoing obligations that could affect future financial performance. Investors should be mindful of the company’s approach to litigation risk and any potential for future financial impacts.
First Quarter 2024 Highlights:
-
Consolidated revenues of
$200.2 million $214.0 million -
Douglas Elliman’s real estate brokerage segment reported gross transaction value of approximately
$7.1 billion $7.3 billion -
Douglas Elliman’s real estate brokerage segment reported an average price per transaction of
$1.59 5 million
-
Douglas Elliman’s real estate brokerage segment reported gross transaction value of approximately
-
Consolidated operating loss of
$41.5 million $35.3 million $23.8 million $17.3 million -
Consolidated operating loss and real estate brokerage segment operating loss include a
$17.75 million $7.75 million $5 million -
Net loss attributed to Douglas Elliman of
$41.5 million $0.50 $17.75 million $17.6 million $0.22 -
Adjusted EBITDA attributed to Douglas Elliman of a loss of
$18.2 million $17.6 million -
Adjusted EBITDA attributed to real estate brokerage segment of a loss of
$14.2 million $13.0 million
“In addition to seeing encouraging signals of market improvement, Douglas Elliman continued to navigate the current environment by successfully reducing costs without compromising the agent experience and enhancing our competitive edge,” stated Howard M. Lorber, Chairman and Chief Executive Officer of Douglas Elliman. “Our Development Marketing business is also showing promising momentum, with a robust pipeline of projects totaling approximately
GAAP Financial Results
Three months ended March 31, 2024
First quarter 2024 revenues were
Non-GAAP Financial Measures
Non-GAAP financial measures include adjustments for stock-based compensation, equity in losses from equity method investments and other, net (for purposes of Adjusted EBITDA). Reconciliations of non-GAAP financial measures to the comparable GAAP financial results for the three months ended March 31, 2024 and 2023 and the last twelve months ended March 31, 2024 are included in Tables 2, 3 and 4.
Three months ended March 31, 2024 compared to the three months ended March 31, 2023
Adjusted EBITDA attributed to Douglas Elliman (as described in Table 2 attached hereto) were a loss of
Adjusted EBITDA attributed to Douglas Elliman’s real estate brokerage segment (as described in Table 2 attached hereto) were a loss of
Adjusted Net Loss attributed to Douglas Elliman (as described in Table 3 attached hereto) was
Gross Transaction Value
For the first quarter of 2024, Douglas Elliman’s brokerage segment reported gross transaction value of approximately
Consolidated Balance Sheet
Douglas Elliman maintained a strong balance sheet with cash and cash equivalents of
Conference Call to Discuss First quarter 2024 Results
As previously announced, the Company will host a conference call and webcast to discuss its first quarter 2024 results on Friday, May 10, 2024 at 8:00 AM (ET). Participants should pre-register for the call using the following link: https://join.eventcastplus.com/eventcastplus/Douglas-Elliman-Inc-First-Quarter-2024-Conference-Call. Please join the webcast at least 10 minutes prior to start time.
A replay of the call will be available shortly after the call ends on May 10, 2024 through May 24, 2024 at https://join.eventcastplus.com/eventcastplus/Douglas-Elliman-Inc-First-Quarter-2024-Conference-Call.
Non-GAAP Financial Measures
Adjusted EBITDA attributed to Douglas Elliman and Adjusted Net Income attributed to Douglas Elliman (referred to as the “Non-GAAP Financial Measures”) are financial measures not prepared in accordance with generally accepted accounting principles (“GAAP”). The Company believes that the Non-GAAP Financial Measures are important measures that supplement discussion and analysis of its results of operations and enhance an understanding of its operating performance.
The Company believes the Non-GAAP Financial Measures provide investors and analysts with a useful measure of operating results unaffected by differences in capital structures and ages of related assets among otherwise comparable companies.
Management uses the Non-GAAP Financial Measures as measures to review and assess operating performance of the Company’s business, and management does and investors should review both the overall performance (GAAP net income) and the operating performance (the Non-GAAP Financial Measures) of the Company’s business. While management considers the Non-GAAP Financial Measures to be important, they should be considered in addition to, but not as substitutes for or superior to, other measures of financial performance prepared in accordance with GAAP, such as operating income, net income and cash flows from operations. In addition, the Non-GAAP Financial Measures are susceptible to varying calculations and the Company’s measurement of the Non-GAAP Financial Measures may not be comparable to those of other companies. Attached hereto as Tables 2, 3 and 4 is information relating to the Company’s Non-GAAP Financial Measures for the three months ended March 31, 2024 and 2023 and the last twelve months ended March 31, 2024.
About Douglas Elliman Inc.
Douglas Elliman Inc. (NYSE: DOUG, “Douglas Elliman”) owns Douglas Elliman Realty, LLC, which is one of the largest residential brokerage companies in
Investors and others should note that we may post information about Douglas Elliman on our website at investors.elliman.com or, if applicable, on our accounts on Facebook, Instagram, LinkedIn, TikTok, X, YouTube or other social media platforms. It is possible that the postings or releases could include information deemed to be material information. Therefore, we encourage investors, the media and others interested in Douglas Elliman to review the information we post on our website at investors.elliman.com and on our social media accounts.
Forward-Looking and Cautionary Statements
This press release includes forward-looking statements within the meaning of the federal securities law. All statements other than statements of historical or current facts made in this document are forward-looking. We identify forward-looking statements in this document by using words or phrases such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may be,” “continue” “could,” “potential,” “objective,” “plan,” “seek,” “predict,” “project” and “will be” and similar words or phrases or their negatives. Forward-looking statements reflect our current expectations and are inherently uncertain. Actual results could differ materially for a variety of reasons.
Risks and uncertainties that could cause our actual results to differ significantly from our current expectations are described in our 2023 Annual Report on Form 10-K and, when filed, in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024. We undertake no responsibility to publicly update or revise any forward-looking statement except as required by applicable law.
[Financial Tables Follow]
TABLE 1
DOUGLAS ELLIMAN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in Thousands, Except Per Share Amounts)
|
Three Months Ended |
||||||
|
March 31, |
||||||
|
2024 |
|
2023 |
||||
Revenues: |
|
|
|
||||
Commissions and other brokerage income |
$ |
188,265 |
|
|
$ |
202,036 |
|
Property management |
|
9,047 |
|
|
|
8,777 |
|
Other ancillary services |
|
2,927 |
|
|
|
3,169 |
|
Total revenues |
|
200,239 |
|
|
|
213,982 |
|
|
|
|
|
||||
Expenses: |
|
|
|
||||
Real estate agent commissions |
|
149,016 |
|
|
|
156,102 |
|
Sales and marketing |
|
21,298 |
|
|
|
21,239 |
|
Operations and support |
|
18,799 |
|
|
|
18,893 |
|
General and administrative |
|
27,016 |
|
|
|
32,295 |
|
Technology |
|
5,843 |
|
|
|
6,012 |
|
Depreciation and amortization |
|
1,981 |
|
|
|
2,039 |
|
Litigation settlement |
|
17,750 |
|
|
|
— |
|
Restructuring |
|
— |
|
|
|
1,210 |
|
Operating loss |
|
(41,464 |
) |
|
|
(23,808 |
) |
|
|
|
|
||||
Other income (expenses): |
|
|
|
||||
Interest income, net |
|
1,376 |
|
|
|
1,105 |
|
Equity in losses from equity-method investments |
|
(11 |
) |
|
|
(73 |
) |
Investment and other losses |
|
(391 |
) |
|
|
(454 |
) |
Loss before provision for income taxes |
|
(40,490 |
) |
|
|
(23,230 |
) |
Income tax expense (benefit) |
|
1,195 |
|
|
|
(5,390 |
) |
|
|
|
|
||||
Net loss |
|
(41,685 |
) |
|
|
(17,840 |
) |
|
|
|
|
||||
Net loss attributed to non-controlling interest |
|
210 |
|
|
|
216 |
|
|
|
|
|
||||
Net loss attributed to Douglas Elliman Inc. |
$ |
(41,475 |
) |
|
$ |
(17,624 |
) |
|
|
|
|
||||
Per basic common share: |
|
|
|
||||
|
|
|
|
||||
Net loss applicable to common shares attributed to Douglas Elliman Inc. |
$ |
(0.50 |
) |
|
$ |
(0.22 |
) |
|
|
|
|
||||
Per diluted common share: |
|
|
|
||||
|
|
|
|
||||
Net loss applicable to common shares attributed to Douglas Elliman Inc. |
$ |
(0.50 |
) |
|
$ |
(0.22 |
) |
TABLE 2
DOUGLAS ELLIMAN INC. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA
(Unaudited)
(Dollars in Thousands)
|
LTM |
|
Year Ended |
|
Three Months Ended |
||||||||||
|
March 31, |
|
December 31, |
|
March 31, |
||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
|
|
|
|
|
|
||||||||||
Net loss attributed to Douglas Elliman Inc. |
$ |
(66,403 |
) |
|
$ |
(42,552 |
) |
|
$ |
(41,475 |
) |
|
$ |
(17,624 |
) |
Interest income, net |
|
(6,084 |
) |
|
|
(5,813 |
) |
|
|
(1,376 |
) |
|
|
(1,105 |
) |
Income tax (benefit) expense |
|
(8,468 |
) |
|
|
(15,053 |
) |
|
|
1,195 |
|
|
|
(5,390 |
) |
Net loss attributed to non-controlling interest |
|
(608 |
) |
|
|
(614 |
) |
|
|
(210 |
) |
|
|
(216 |
) |
Depreciation and amortization |
|
7,968 |
|
|
|
8,026 |
|
|
|
1,981 |
|
|
|
2,039 |
|
EBITDA |
$ |
(73,595 |
) |
|
$ |
(56,006 |
) |
|
$ |
(39,885 |
) |
|
$ |
(22,296 |
) |
|
|
|
|
|
|
|
|
||||||||
Equity in losses from equity-method investments (a) |
|
106 |
|
|
|
168 |
|
|
|
11 |
|
|
|
73 |
|
Stock-based compensation expense (b) |
|
13,607 |
|
|
|
13,075 |
|
|
|
3,355 |
|
|
|
2,823 |
|
Litigation settlement |
|
17,750 |
|
|
|
— |
|
|
|
17,750 |
|
|
|
— |
|
Restructuring |
|
1,167 |
|
|
|
2,377 |
|
|
|
— |
|
|
|
1,210 |
|
Other, net |
|
(696 |
) |
|
|
(633 |
) |
|
|
391 |
|
|
|
454 |
|
Adjusted EBITDA |
|
(41,661 |
) |
|
|
(41,019 |
) |
|
|
(18,378 |
) |
|
|
(17,736 |
) |
Adjusted EBITDA attributed to non-controlling interest |
|
367 |
|
|
|
326 |
|
|
|
132 |
|
|
|
91 |
|
Adjusted EBITDA attributed to Douglas Elliman Inc. |
$ |
(41,294 |
) |
|
$ |
(40,693 |
) |
|
$ |
(18,246 |
) |
|
$ |
(17,645 |
) |
|
|
|
|
|
|
|
|
||||||||
Operating loss by Segment: |
|
|
|
|
|
|
|
||||||||
Real estate brokerage |
$ |
(54,712 |
) |
|
$ |
(36,769 |
) |
|
$ |
(35,286 |
) |
|
$ |
(17,343 |
) |
Corporate and other |
|
(27,441 |
) |
|
|
(27,728 |
) |
|
|
(6,178 |
) |
|
|
(6,465 |
) |
Total |
$ |
(82,153 |
) |
|
$ |
(64,497 |
) |
|
$ |
(41,464 |
) |
|
$ |
(23,808 |
) |
|
|
|
|
|
|
|
|
||||||||
Real estate brokerage segment |
|
|
|
|
|
|
|
||||||||
Operating loss |
$ |
(54,712 |
) |
|
$ |
(36,769 |
) |
|
$ |
(35,286 |
) |
|
$ |
(17,343 |
) |
Depreciation and amortization |
|
7,968 |
|
|
|
8,026 |
|
|
|
1,981 |
|
|
|
2,039 |
|
Stock-based compensation |
|
4,745 |
|
|
|
4,539 |
|
|
|
1,225 |
|
|
|
1,019 |
|
Litigation settlement |
|
17,750 |
|
|
|
— |
|
|
|
17,750 |
|
|
|
— |
|
Restructuring |
|
1,167 |
|
|
|
2,377 |
|
|
|
— |
|
|
|
1,210 |
|
Adjusted EBITDA |
|
(23,082 |
) |
|
|
(21,827 |
) |
|
|
(14,330 |
) |
|
|
(13,075 |
) |
Adjusted EBITDA attributed to non-controlling interest |
|
367 |
|
|
|
326 |
|
|
|
132 |
|
|
|
91 |
|
Adjusted EBITDA attributed to Douglas Elliman Inc. |
$ |
(22,715 |
) |
|
$ |
(21,501 |
) |
|
$ |
(14,198 |
) |
|
$ |
(12,984 |
) |
|
|
|
|
|
|
|
|
||||||||
Corporate and other segment |
|
|
|
|
|
|
|
||||||||
Operating loss |
$ |
(27,441 |
) |
|
$ |
(27,728 |
) |
|
$ |
(6,178 |
) |
|
$ |
(6,465 |
) |
Stock-based compensation |
|
8,862 |
|
|
|
8,536 |
|
|
|
2,130 |
|
|
|
1,804 |
|
Adjusted EBITDA attributed to Douglas Elliman Inc. |
$ |
(18,579 |
) |
|
$ |
(19,192 |
) |
|
$ |
(4,048 |
) |
|
$ |
(4,661 |
) |
| _________ | ||
| a. | Represents equity in losses recognized from the Company’s investments in equity method investments that are accounted for under the equity method and are not consolidated in the Company’s financial results. |
|
| b. |
Represents amortization of stock-based compensation. |
|
TABLE 3
DOUGLAS ELLIMAN INC. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED NET LOSS
(Unaudited)
(Dollars in Thousands, Except Per Share Amounts)
|
Three Months Ended |
||||||
|
March 31, |
||||||
|
2024 |
|
2023 |
||||
|
|
||||||
Net loss attributed to Douglas Elliman Inc. |
$ |
(41,475 |
) |
|
$ |
(17,624 |
) |
|
|
|
|
||||
Restructuring |
|
— |
|
|
|
1,210 |
|
Litigation settlement |
|
17,750 |
|
|
|
— |
|
Total adjustments |
|
17,750 |
|
|
|
1,210 |
|
|
|
|
|
||||
Tax expense related to adjustments |
|
— |
|
|
|
(369 |
) |
Adjusted net loss attributed to Douglas Elliman Inc. |
$ |
(23,725 |
) |
|
$ |
(16,783 |
) |
|
|
|
|
||||
Per diluted common share: |
|
|
|
||||
|
|
|
|
||||
Adjusted net loss applicable to common shares attributed to Douglas Elliman Inc. |
$ |
(0.28 |
) |
|
$ |
(0.21 |
) |
TABLE 4
DOUGLAS ELLIMAN INC. AND SUBSIDIARIES
RECONCILIATION OF REVENUES
(Unaudited)
(Dollars in Thousands, Except for Gross Transaction Value)
|
LTM |
|
Year Ended |
|
Three Months Ended |
||||||
|
March 31, |
|
December 31, |
|
March 31, |
||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
Revenues: |
|
|
|
|
|
|
|
||||
Commissions and other brokerage income |
$ |
892,298 |
|
$ |
906,069 |
|
$ |
188,265 |
|
$ |
202,036 |
Property management |
|
35,812 |
|
|
35,542 |
|
|
9,047 |
|
|
8,777 |
Other ancillary services |
|
13,725 |
|
|
13,967 |
|
|
2,927 |
|
|
3,169 |
Total revenues |
$ |
941,835 |
|
$ |
955,578 |
|
$ |
200,239 |
|
$ |
213,982 |
|
|
|
|
|
|
|
|
||||
Gross transaction value (in billions) |
$ |
34.2 |
|
$ |
34.4 |
|
$ |
7.1 |
|
$ |
7.3 |
Total transactions |
|
21,456 |
|
|
21,606 |
|
|
4,477 |
|
|
4,627 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240509658928/en/
Stephen Larkin, Douglas Elliman Inc.
917-902-2503
Columbia Clancy/Catherine Livingston, FGS Global
212-687-8080 (
44(0)2031788914 (
J. Bryant Kirkland III, Douglas Elliman Inc.
305-579-8000
Source: Douglas Elliman Inc.
FAQ
What were Douglas Elliman Inc.'s first quarter 2024 revenues?
What was the net loss attributed to Douglas Elliman in the first quarter of 2024?
What was the gross transaction value reported by Douglas Elliman's brokerage segment in the first quarter of 2024?
What was the average price per transaction reported by Douglas Elliman's brokerage segment in the first quarter of 2024?
What was the litigation settlement charge disclosed by Douglas Elliman in the first quarter of 2024?
