Douglas Elliman Inc. Reports Fourth Quarter and Full Year 2023 Financial Results
- Strong revenues reported for both the fourth quarter and full year of 2023.
- Real estate brokerage segment displayed growth in gross transaction values.
- Operating losses increased significantly compared to the previous year.
- Net losses attributed to Douglas Elliman were substantial for both periods.
- Adjusted EBITDA showed losses, highlighting financial difficulties faced by the company.
- Decrease in revenues compared to the prior year.
- Operating losses widened significantly, impacting overall financial performance.
- Net losses attributed to Douglas Elliman were higher than the previous year.
- Adjusted EBITDA indicated ongoing financial challenges for the company.
Insights
The reported financial results of Douglas Elliman Inc. indicate a year-over-year increase in quarterly revenues, which suggests a resilient performance in the luxury real estate market segment. However, the company's operating and net losses have widened both for the fourth quarter and the full year, which raises concerns about the company's cost structure and profitability in a challenging economic environment. The increase in gross transaction value in the fourth quarter, while positive, does not compensate for the overall decrease in annual revenues and the significant operating losses reported.
Investors should consider the implications of these results on the company's financial health and the effectiveness of its strategies to manage expenses and improve margins. The reported strong balance sheet with substantial cash reserves provides some cushion, but the long-term viability hinges on reversing the trend of operating losses. The real estate market is sensitive to interest rate changes and the company's future performance will likely be influenced by the broader economic conditions and the interest rate environment.
Douglas Elliman's performance can be partially attributed to the dynamics of the real estate market, particularly the luxury segment which has its unique demand drivers. While the average price per transaction remains high, the decline in gross transaction value year-over-year suggests a possible cooling in the market or a decrease in the volume of high-value transactions. This trend could be reflective of broader economic factors such as interest rate hikes, stock market volatility and economic uncertainty affecting the purchasing power and investment decisions of affluent buyers.
Market research indicates that luxury real estate can be less sensitive to economic downturns, but not immune. The company's focus on this market segment may offer some resilience, but the reported financials suggest that even high-end markets are not entirely insulated from broader trends. The real estate sector is cyclical and the company's future performance will depend on its ability to adapt to these cycles and maintain a competitive edge through its world-class agents and development marketing business, as highlighted by the CEO.
From an economic perspective, the reported financials of Douglas Elliman provide insights into the health of the real estate sector, particularly in the luxury market. The slight increase in quarterly revenue amidst a challenging year indicates some resilience, but the overall decline in annual revenue and increased losses point to economic headwinds facing the industry. The real estate market often serves as a leading indicator for the economy and Douglas Elliman's performance may reflect broader economic trends, such as reduced consumer spending power and investment caution due to inflationary pressures and potential recessionary fears.
The company's positioning in the luxury segment may offer some protection against market fluctuations, but the increased losses suggest that cost management and operational efficiency are areas that require attention. The interest rate environment mentioned by the CEO is a critical factor, as rising rates typically dampen borrowing and real estate activity, potentially leading to reduced transaction volumes and pressures on prices. Investors would need to monitor these economic indicators closely to gauge the potential impact on Douglas Elliman's future performance.
Fourth Quarter 2023 Highlights:
-
Revenues of
$214.1 million $207.3 million
-
Douglas Elliman’s real estate brokerage segment’s gross transaction value was approximately
$7.9 billion $7.5 billion
-
Douglas Elliman’s real estate brokerage segment reported an average price per transaction of
$1.58 million
-
Operating loss of
$23.6 million $16.4 million $21.9 million $15.6 million
-
Net loss attributed to Douglas Elliman of
$14.8 million $0.18 $18.4 million $0.23
-
Adjusted EBITDA attributed to Douglas Elliman of a loss of
$17.5 million $17.1 million
-
Adjusted EBITDA attributed to Douglas Elliman’s real estate brokerage segment of a loss of
$12.5 million $12.6 million
Full Year 2023 Highlights:
-
Revenues of
$955.6 million $1.15 billion
-
Douglas Elliman’s real estate brokerage segment’s gross transaction value was approximately
$34.4 billion $42.9 billion
-
Douglas Elliman’s real estate brokerage segment reported an average price per transaction of
$1.59 million
-
Operating loss of
$64.5 million $36.8 million $4.5 million $22.0 million
-
Net loss attributed to Douglas Elliman of
$42.6 million $0.52 $5.6 million $0.08
-
Adjusted EBITDA attributed to Douglas Elliman of a loss of
$40.7 million $15.0 million
-
Adjusted EBITDA attributed to Douglas Elliman’s real estate brokerage segment of a loss of
$21.5 million $34.5 million
“In the fourth quarter of 2023, Douglas Elliman delivered its first year-over-year increase in quarterly revenues since the first quarter of 2022, which reflects the strength of the luxury markets we operate in and the gradual stabilization of home purchasing activity,” said Howard M. Lorber, Chairman and Chief Executive Officer of Douglas Elliman. “As the interest rate environment continues to improve, Douglas Elliman is well-positioned to drive long-term growth and value for stockholders due to the distinct competitive advantages provided by our dedicated team of world-class agents and leading development marketing business.”
GAAP Financial Results
Three months ended December 31, 2023. Fourth quarter 2023 revenues were
Year ended December 31, 2023. For the year ended December 31, 2023, revenues were
Non-GAAP Financial Measures
Non-GAAP financial measures include adjustments for stock-based compensation, equity in losses from equity method investments, restructuring, and other, net (for purposes of Adjusted EBITDA). Reconciliations of non-GAAP financial measures to the comparable GAAP financial results for the three months and full years ended December 31, 2023 and 2022 are included in Tables 2, 3 and 4.
Three months ended December 31, 2023 compared to the three months ended December 31, 2022
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
Year ended December 31, 2023 compared to the year ended December 31, 2022
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 three months ended December 31, 2023, Douglas Elliman’s subsidiary, Douglas Elliman Realty, LLC, achieved gross transaction value of approximately
For the year ended December 31, 2023, Douglas Elliman Realty, LLC achieved 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 Fourth Quarter and Full Year 2023 Results
As previously announced, the Company will host a conference call and webcast to discuss its fourth quarter and full year 2023 results on Friday, March 1, 2024 at 8:00 a.m. (ET).
Investors may access the call via live webcast at https://join.eventcastplus.com/eventcastplus/Douglas-Elliman-Inc-Fourth-Quarter-and-Full-Year-2023-Conference-Call. Please join the webcast at least 10 minutes prior to the start time.
A replay of the webcast will be available shortly after the call ends on March 1, 2024 through June 1, 2024 at https://investors.elliman.com/events-and-presentations/default.aspx.
Non-GAAP Financial Measures
Adjusted EBITDA attributed to Douglas Elliman and Adjusted Net (Loss) 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 and full years ended December 31, 2023 and 2022.
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, Twitter, 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 Annual Report on Form 10-K for the year ended December 31, 2022 and, when filed, our Annual Report on Form 10-K for the year ended December 31, 2023. 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 |
|
Year Ended |
||||||||||||
|
December 31, |
|
December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenues: |
|
|
|
|
|
|
|
||||||||
Commissions and other brokerage income |
$ |
202,289 |
|
|
$ |
195,968 |
|
|
$ |
906,069 |
|
|
$ |
1,099,885 |
|
Property management |
|
8,693 |
|
|
|
8,236 |
|
|
|
35,542 |
|
|
|
36,022 |
|
Other ancillary services |
|
3,154 |
|
|
|
3,126 |
|
|
|
13,967 |
|
|
|
17,270 |
|
Total revenues |
|
214,136 |
|
|
|
207,330 |
|
|
|
955,578 |
|
|
|
1,153,177 |
|
|
|
|
|
|
|
|
|
||||||||
Expenses: |
|
|
|
|
|
|
|
||||||||
Real estate agent commissions |
|
159,413 |
|
|
|
150,363 |
|
|
|
706,162 |
|
|
|
836,803 |
|
Sales and marketing |
|
19,500 |
|
|
|
21,618 |
|
|
|
83,670 |
|
|
|
85,763 |
|
Operations and support |
|
17,267 |
|
|
|
17,074 |
|
|
|
70,605 |
|
|
|
72,946 |
|
General and administrative |
|
33,076 |
|
|
|
32,194 |
|
|
|
125,447 |
|
|
|
131,421 |
|
Technology |
|
6,011 |
|
|
|
5,964 |
|
|
|
23,788 |
|
|
|
22,773 |
|
Depreciation and amortization |
|
1,995 |
|
|
|
1,979 |
|
|
|
8,026 |
|
|
|
8,012 |
|
Restructuring |
|
445 |
|
|
|
— |
|
|
|
2,377 |
|
|
|
— |
|
Operating loss |
|
(23,571 |
) |
|
|
(21,862 |
) |
|
|
(64,497 |
) |
|
|
(4,541 |
) |
|
|
|
|
|
|
|
|
||||||||
Other income (expenses): |
|
|
|
|
|
|
|
||||||||
Interest income, net |
|
1,553 |
|
|
|
1,215 |
|
|
|
5,813 |
|
|
|
1,779 |
|
Equity in losses from equity-method investments |
|
(25 |
) |
|
|
(86 |
) |
|
|
(168 |
) |
|
|
(563 |
) |
Investment and other income |
|
524 |
|
|
|
403 |
|
|
|
633 |
|
|
|
3,429 |
|
(Loss) income before provision for income taxes |
|
(21,519 |
) |
|
|
(20,330 |
) |
|
|
(58,219 |
) |
|
|
104 |
|
Income tax (benefit) expense |
|
(6,501 |
) |
|
|
(1,670 |
) |
|
|
(15,053 |
) |
|
|
6,503 |
|
|
|
|
|
|
|
|
|
||||||||
Net loss |
|
(15,018 |
) |
|
|
(18,660 |
) |
|
|
(43,166 |
) |
|
|
(6,399 |
) |
|
|
|
|
|
|
|
|
||||||||
Net loss attributed to non-controlling interest |
|
175 |
|
|
|
245 |
|
|
|
614 |
|
|
|
777 |
|
|
|
|
|
|
|
|
|
||||||||
Net loss attributed to Douglas Elliman Inc. |
$ |
(14,843 |
) |
|
$ |
(18,415 |
) |
|
$ |
(42,552 |
) |
|
$ |
(5,622 |
) |
|
|
|
|
|
|
|
|
||||||||
Per basic common share: |
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net loss applicable to common shares attributed to Douglas Elliman Inc. |
$ |
(0.18 |
) |
|
$ |
(0.23 |
) |
|
$ |
(0.52 |
) |
|
$ |
(0.08 |
) |
|
|
|
|
|
|
|
|
||||||||
Per diluted common share: |
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net loss applicable to common shares attributed to Douglas Elliman Inc. |
$ |
(0.18 |
) |
|
$ |
(0.23 |
) |
|
$ |
(0.52 |
) |
|
$ |
(0.08 |
) |
TABLE 2
DOUGLAS ELLIMAN INC. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA
(Unaudited)
(Dollars in Thousands)
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
December 31, |
|
December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
||||||||||||
Net loss attributed to Douglas Elliman Inc. |
$ |
(14,843 |
) |
|
$ |
(18,415 |
) |
|
$ |
(42,552 |
) |
|
$ |
(5,622 |
) |
Interest income, net |
|
(1,553 |
) |
|
|
(1,215 |
) |
|
|
(5,813 |
) |
|
|
(1,779 |
) |
Income tax (benefit) expense |
|
(6,501 |
) |
|
|
(1,670 |
) |
|
|
(15,053 |
) |
|
|
6,503 |
|
Net loss attributed to non-controlling interest |
|
(175 |
) |
|
|
(245 |
) |
|
|
(614 |
) |
|
|
(777 |
) |
Depreciation and amortization |
|
1,995 |
|
|
|
1,979 |
|
|
|
8,026 |
|
|
|
8,012 |
|
EBITDA |
$ |
(21,077 |
) |
|
$ |
(19,566 |
) |
|
$ |
(56,006 |
) |
|
$ |
6,337 |
|
|
|
|
|
|
|
|
|
||||||||
Equity in losses from equity-method investments (a) |
|
25 |
|
|
|
86 |
|
|
|
168 |
|
|
|
563 |
|
Stock-based compensation expense (b) |
|
3,409 |
|
|
|
2,662 |
|
|
|
13,075 |
|
|
|
11,138 |
|
Restructuring |
|
445 |
|
|
|
— |
|
|
|
2,377 |
|
|
|
— |
|
Other, net |
|
(524 |
) |
|
|
(403 |
) |
|
|
(633 |
) |
|
|
(3,429 |
) |
Adjusted EBITDA |
|
(17,722 |
) |
|
|
(17,221 |
) |
|
|
(41,019 |
) |
|
|
14,609 |
|
Adjusted EBITDA attributed to non-controlling interest |
|
263 |
|
|
|
119 |
|
|
|
326 |
|
|
|
342 |
|
Adjusted EBITDA attributed to Douglas Elliman Inc. |
$ |
(17,459 |
) |
|
$ |
(17,102 |
) |
|
$ |
(40,693 |
) |
|
$ |
14,951 |
|
|
|
|
|
|
|
|
|
||||||||
Operating (loss) income by Segment: |
|
|
|
|
|
|
|
||||||||
Real estate brokerage |
$ |
(16,420 |
) |
|
$ |
(15,626 |
) |
|
$ |
(36,769 |
) |
|
$ |
21,993 |
|
Corporate and other |
|
(7,151 |
) |
|
|
(6,236 |
) |
|
|
(27,728 |
) |
|
|
(26,534 |
) |
Total |
$ |
(23,571 |
) |
|
$ |
(21,862 |
) |
|
$ |
(64,497 |
) |
|
$ |
(4,541 |
) |
|
|
|
|
|
|
|
|
||||||||
Real estate brokerage segment |
|
|
|
|
|
|
|
||||||||
Operating (loss) income |
$ |
(16,420 |
) |
|
$ |
(15,626 |
) |
|
$ |
(36,769 |
) |
|
$ |
21,993 |
|
Depreciation and amortization |
|
1,995 |
|
|
|
1,979 |
|
|
|
8,026 |
|
|
|
8,012 |
|
Stock-based compensation |
|
1,184 |
|
|
|
917 |
|
|
|
4,539 |
|
|
|
4,195 |
|
Restructuring |
|
445 |
|
|
|
— |
|
|
|
2,377 |
|
|
|
— |
|
Adjusted EBITDA |
|
(12,796 |
) |
|
|
(12,730 |
) |
|
|
(21,827 |
) |
|
|
34,200 |
|
Adjusted EBITDA attributed to non-controlling interest |
|
263 |
|
|
|
119 |
|
|
|
326 |
|
|
|
342 |
|
Adjusted EBITDA attributed to Douglas Elliman Inc. |
$ |
(12,533 |
) |
|
$ |
(12,611 |
) |
|
$ |
(21,501 |
) |
|
$ |
34,542 |
|
|
|
|
|
|
|
|
|
||||||||
Corporate and other segment |
|
|
|
|
|
|
|
||||||||
Operating loss |
$ |
(7,151 |
) |
|
$ |
(6,236 |
) |
|
$ |
(27,728 |
) |
|
$ |
(26,534 |
) |
Stock-based compensation |
|
2,225 |
|
|
|
1,745 |
|
|
|
8,536 |
|
|
|
6,943 |
|
Adjusted EBITDA attributed to Douglas Elliman Inc. |
$ |
(4,926 |
) |
|
$ |
(4,491 |
) |
|
$ |
(19,192 |
) |
|
$ |
(19,591 |
) |
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 |
|
Year Ended |
||||||||||||
|
December 31, |
|
December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
||||||||||||
Net loss attributed to Douglas Elliman Inc. |
$ |
(14,843 |
) |
|
$ |
(18,415 |
) |
|
$ |
(42,552 |
) |
|
$ |
(5,622 |
) |
|
|
|
|
|
|
|
|
||||||||
Restructuring |
|
445 |
|
|
|
— |
|
|
|
2,377 |
|
|
|
— |
|
Income related to Tax Disaffiliation indemnification |
|
— |
|
|
|
(8 |
) |
|
|
— |
|
|
|
(589 |
) |
Total adjustments |
|
445 |
|
|
|
(8 |
) |
|
|
2,377 |
|
|
|
(589 |
) |
|
|
|
|
|
|
|
|
||||||||
Tax expense related to adjustments |
|
(89 |
) |
|
|
— |
|
|
|
(678 |
) |
|
|
— |
|
Adjusted net loss attributed to Douglas Elliman Inc. |
$ |
(14,487 |
) |
|
$ |
(18,423 |
) |
|
$ |
(40,853 |
) |
|
$ |
(6,211 |
) |
|
|
|
|
|
|
|
|
||||||||
Per diluted common share: |
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Adjusted net loss applicable to common shares attributed to Douglas Elliman Inc. |
$ |
(0.18 |
) |
|
$ |
(0.23 |
) |
|
$ |
(0.50 |
) |
|
$ |
(0.08 |
) |
TABLE 4
DOUGLAS ELLIMAN INC. AND SUBSIDIARIES
RECONCILIATION OF REVENUES
(Unaudited)
(Dollars in Thousands, Except for Gross Transaction Value)
|
Three Months Ended |
|
Year Ended |
||||||||
|
December 31, |
|
December 31, |
||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
Revenues: |
|
|
|
|
|
|
|
||||
Commissions and other brokerage income |
$ |
202,289 |
|
$ |
195,968 |
|
$ |
906,069 |
|
$ |
1,099,885 |
Property management |
|
8,693 |
|
|
8,236 |
|
|
35,542 |
|
|
36,022 |
Other ancillary services |
|
3,154 |
|
|
3,126 |
|
|
13,967 |
|
|
17,270 |
Total revenues |
$ |
214,136 |
|
$ |
207,330 |
|
$ |
955,578 |
|
$ |
1,153,177 |
|
|
|
|
|
|
|
|
||||
Gross transaction value (in billions) |
$ |
7.9 |
|
$ |
7.5 |
|
$ |
34.4 |
|
$ |
42.9 |
Total transactions |
|
5,022 |
|
|
4,776 |
|
|
21,606 |
|
|
26,573 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240229555923/en/
Stephen Larkin, Douglas Elliman Inc.
917-902-2503
Emily Claffey/Catherine Livingston, FGS Global,
212-687-8080
J. Bryant Kirkland III, Douglas Elliman Inc.
305-579-8000
Source: Douglas Elliman Inc.
FAQ
What were the revenues reported by Douglas Elliman Inc. for the fourth quarter of 2023?
What was the gross transaction value of Douglas Elliman's real estate brokerage segment for the year ended December 31, 2023?
What were the net losses attributed to Douglas Elliman for the year ended December 31, 2023?
What was the average price per transaction reported by Douglas Elliman's real estate brokerage segment for the three months ended December 31, 2023?
What financial measure showed losses for Douglas Elliman in the fourth quarter of 2023?
