eXp World Holdings Reports Q1 2024 Results

Rhea-AI Summary

eXp World Holdings reported its Q1 2024 financial results, highlighting a 12% increase in transactions, revenue growth of 11%, and a net loss of $15.6 million due to an antitrust litigation provision. The company focused on agent-centric growth, strategic investments, and a positive Adjusted EBITDA position, showcasing long-term value for shareholders.

Positive

• eXp Realty closed over $37 billion in transactions, marking a 12% increase year-over-year.

• The company's revenue grew by 11% to $943 million in the first quarter of 2024.

• eXp demonstrated a strong Adjusted EBITDA position, allowing for investments in training, technology, and features.

Negative

• The first quarter net (loss) income was ($15.6) million compared to $1.5 million net income in Q1 2023.

• Operating costs increased by 12% to $80.5 million due to strategic investments and legal expenses.

• Adjusted EBITDA decreased by 24% to $11.0 million, impacted by higher operating costs.

Insights

Financial Analyst

eXp World Holdings' Q1 reporting indicates a mixed financial landscape. The revenue uptick of 11% aligns well with the industry's upward trajectory in home sales prices. However, the net loss of $15.6 million and the adjusted EBITDA decline by 24% raise questions on cost management and operational efficiency. While share repurchases and dividends reflect a shareholder-friendly policy, they must be balanced against the company's need to retain capital for investments and cushion against market volatilities. The profit improvement plan and the focus on reducing non-productive agents are pragmatic steps towards optimizing operations, yet the effectiveness of these measures will be seen in the long term. Especially noteworthy is the antitrust litigation contingency provision, which could carry financial and reputational risks. Investors should monitor how these elements convert into sustainable profitability.

Market Research Analyst

The 8% increase in transactions amidst a challenging real estate market demonstrates eXp's resilience and potential for market share gains. The agent-centric model, augmented by a high agent Net Promoter Score, is indicative of a strong corporate culture that could drive agent productivity and retention. The decrease in agent count hints at a strategic pruning to maintain a quality workforce, which could enhance brand reputation and operational efficiency. Internationally, the company's growth is promising, but it will be important to see if they maintain momentum while managing cross-border operational complexities. The operational hires and executive appointments suggest an emphasis on innovation and global expansion, which could yield long-term benefits if executed effectively.

Technology Industry Analyst

The mention of strategic investments in training and technology is encouraging, as it aligns with the need for real estate brokerages to innovate continuously. The cloud brokerage model, which eXp has been pioneering, is becoming important in the ever-evolving real estate market. The company's focus on technological enhancements and innovation, as reflected in the appointment of a new Chief Innovation and Technology Officer, highlights the potential for improved operating efficiencies. However, the magnitude of these investments and their direct impact on the bottom line must be scrutinized, as technology outlays can be substantial with ROI that may not materialize in the short term.

BELLINGHAM, Wash., May 01, 2024 (GLOBE NEWSWIRE) --  eXp World Holdings, Inc. (Nasdaq: EXPI), or the “Company”, the holding company for eXp Realty^®, FrameVR.io and SUCCESS^® Enterprises, today announced financial results for the first quarter ended March 31, 2024.

“During the first quarter, our agents closed over $37 billion of transactions, a 12% year-over-year increase, underscoring eXp’s unparalleled scale in the cloud brokerage market we pioneered,” said Glenn Sanford, eXp World Holdings Founder, Chairman and CEO. “We continue to provide our agents with the industry’s best platform for growth and the resources they need to navigate today’s dynamic real estate market. Under Leo Pareja’s leadership, I am confident that eXp Realty will extend its leadership position in the coming years and continue to redefine what it means to be the most agent-centric real estate brokerage on the planet.”

“Coming off another quarter of market share gains, I couldn’t be more excited to lead eXp Realty as the industry evolves,” said Leo Pareja, eXp Realty CEO. “Like Glenn, I will always be an agent at heart and ensure that eXp’s platform provides agents with everything they need to sell more real estate and achieve their financial goals faster than ever before. eXp Realty is the category king of the cloud-based brokerage model and the only brokerage of its kind operating at a significant scale. Our positive Adjusted EBITDA position enables us to invest in training, technology, and features that are unparalleled in the industry across the platform. I’m committed to leveraging our scale and sizable investments to increase operating efficiencies further, drive productivity and provide agents and shareholders with long-term, sustainable value for years to come.”

“We delivered a solid first quarter as we grew revenues 11% year over year while generating significant cash flow and returning $41 million to shareholders through share repurchases and cash dividends,” said Kent Cheng, Principal Financial Officer of eXp World Holdings. “We also demonstrated clear progress on our $20 million profit improvement plan. Despite our industry-leading efficiency, we believe there is further potential to improve as we continue to optimize our processes and leverage our scale to deliver higher margins and greater value for our shareholders.”

First Quarter 2024 Consolidated Financial Highlights as Compared to the Same Year-Ago Period:

• First quarter revenue increased 11% to $943 million, driven by increased agent productivity, a rise in average home sales prices, and increased international production, despite a challenging real estate market. U.S. transaction units outperformed the market¹.
• First quarter net (loss) income of ($15.6) million compared to $1.5 million net income in the first quarter of 2023. First quarter net (loss) income per diluted share of ($0.10) compared to net income per diluted share of $0.01 in the year-ago quarter. First quarter net (loss) income included a $16 million (net of tax, $11.4 million) antitrust litigation contingency provision.
• First quarter adjusted net (loss) income (a non-GAAP financial measure)² excluding antitrust litigation contingency provision and discontinued operations was ($2.4) million compared to adjusted net income of $2.0 million in the year-ago quarter. First quarter adjusted (loss) income per diluted share of ($0.02) compared to adjusted net income per diluted share of $0.01 in the first quarter of 2023.
• First quarter operating costs were $80.5 million, a 12% increase compared to the first quarter of 2023. This increase was driven by strategic investments in personnel to support increased transaction volumes and agent NPS and increased severance and legal expenses.
• First quarter adjusted EBITDA³ (a non-GAAP financial measure) of $11.0 million, a decrease of 24% compared to the same period in previous year. Adjusted EBITDA was lower year over year, due to higher operating costs partially offset by higher revenue, net of agent commission and other agent-related costs.
• As of March 31, 2024, cash and cash equivalents totaled $109.2 million, compared to $122.8 million as of March 31, 2023. The Company repurchased approximately $33.0 million of common stock during the first quarter of 2024.
• The Company paid a cash dividend for the first quarter of 2024 of $0.05 per share of common stock on March 29, 2024. On April 24, 2024, the Company’s Board of Directors declared a cash dividend of $0.05 per share of common stock for the second quarter of 2024, expected to be paid on May 27, 2024 to stockholders of record on May 13, 2024.
  
  

First Quarter Operational Highlights as Compared to the Same Year-Ago Period:

• eXp ended the first quarter of 2024 with a global agent Net Promoter Score of 73, up from 70 a year ago. aNPS is a measure of agent satisfaction and an important key performance indicator (KPI) given the Company’s intense focus on improving the agent experience.
• Agents and brokers on the eXp Realty platform decreased 2% year-over-year to 85,780 as of March 31, 2024 generally driven by the exiting of non-productive agents.
• Transactions increased 8% year-over-year to 110,976.
• Transaction volume increased 12% year-over-year to $37.2 billion.
• eXp Realty appointed new executives during the first quarter: Renee Kaspar as Chief Human Resources Officer, Seth Siegler to Chief Innovation Officer, Sumanth Kamath to Chief Technology Officer, and Felix Bravo to VP, Global Growth.
• eXp Realty also named Leo Pareja as Chief Executive Officer on April 4, 2024 and Wendy Forsythe as Chief Marketing Officer on April 26, 2024.

First Quarter 2024 Results – Virtual Fireside Chat

The Company will hold a virtual fireside chat and investor Q&A with eXp World Holdings Founder and CEO Glenn Sanford, eXp Realty CEO Leo Pareja and eXp World Holdings Principal Financial Officer and Chief Accounting Officer, Kent Cheng on Wednesday, May 1, 2024 at 2 p.m. PT / 5 p.m. ET.

The investor Q&A is open to investors, current stockholders and anyone interested in learning more about eXp World Holdings and its companies. Submit questions in advance for inclusion to investors@eXpWorldHoldings.com.

Date: Wednesday, May 1, 2024

Time: 2 p.m. PT / 5 p.m. ET

Location: exp.world. Join at https://exp.world/earnings

Livestream: expworldholdings.com/events

About eXp World Holdings, Inc.

eXp World Holdings, Inc. (Nasdaq: EXPI) is the holding company for eXp Realty^®, FrameVR.io and SUCCESS^® Enterprises.

eXp Realty is the largest independent real estate company in the world with more than 85,000 agents in the United States, Canada, the United Kingdom, Australia, France, India, Mexico, Portugal, South Africa, Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Panama, Germany, the Dominican Republic, Greece, New Zealand, Chile, Poland and Dubai and continues to scale internationally. As a publicly traded company, eXp World Holdings provides real estate professionals the unique opportunity to earn equity awards for production goals and contributions to overall company growth. eXp World Holdings and its businesses offer a full suite of brokerage and real estate tech solutions, including an innovative residential and commercial brokerage model, professional services, collaborative tools and personal development. The cloud-based brokerage is powered by FrameVR.io technology, offering immersive 3D platforms that are deeply social and collaborative, enabling agents to be more connected and productive. SUCCESS^® Enterprises, anchored by SUCCESS^® magazine and its related media properties, was established in 1897 and is a leading personal and professional development brand and publication.

For more information, visit https://expworldholdings.com.

eXp World Holdings, Inc. intends to use its Investor Relations website, its X (formerly Twitter) feed (@eXpWorldIR), Facebook page (https://www.facebook.com/eXpWorldHoldings), Instagram account (@eXpWorldHoldings), LinkedIn page (https://www.linkedin.com/company/expworldholdings/), as well as eXp Realty, LLC’s X (formerly Twitter) feed (@eXpRealty), Facebook page (https://www.facebook.com/eXpRealty), Instagram account (@eXpRealty_), and LinkedIn account (https://www.linkedin.com/company/exp-realty/) as a means of disclosing material non-public information and to comply with its disclosure obligations under Regulation FD.

Use of Non-GAAP Financial Measures

To provide investors with additional information regarding our financial results, this chat deck includes references to adjusted EBITDA, adjusted net income, and adjusted operating cash flow, which are non-U.S. GAAP financial measures that may be different from similarly titled measures used by other companies. These measures are presented to enhance investors’ overall understanding of the Company’s financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP.

The Company’s non-GAAP financial measures provide useful information about financial performance, enhance the overall understanding of past performance and future prospects, and allow for greater transparency with respect to key metrics used by management for financial and operational decision-making. These measures may also provide an additional tool for investors to use in comparing core financial performance over multiple periods with other companies in the industry.

• Adjusted EBITDA helps identify underlying trends in the business that could otherwise be masked by the effect of the expenses excluded in adjusted EBITDA. In particular, the Company believes the exclusion of stock and stock option expenses provides a useful supplemental measure in evaluating the performance of operations and provides better transparency into results of operations. The Company defines adjusted EBITDA to mean net income (loss) from continuing operations, excluding other income (expense), income tax benefit (expense), depreciation, amortization, impairment charges, litigation contingency expenses, stock-based compensation expense, and stock option expense.
• Adjusted net (loss) income excludes significant non-operating related expenses that management does not consider ongoing in nature. The Company defines adjusted net (loss) income as net (loss) income adjusted for net loss from discontinued operations and the after-tax impact of the litigation contingency accrual.
• Adjusted operating cash flow helps investors see the Company’s performance through the eyes of management. The Company defines adjusted operating cash flow to mean cash flows from operations excluding the change in customer deposits.
  
  

Adjusted EBITDA, adjusted net (loss) income, and adjusted operating cash flow should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP.

Safe Harbor Statement

The statements contained herein may include statements of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. These statements include, but are not limited to, statements about future cost saving measures; the continued growth of our agent and broker base; improvements in technology and operational processes; revenue growth; dividends; and financial performance. Such forward-looking statements speak only as of the date hereof, and the Company undertakes no obligation to revise or update them. Such statements are not guarantees of future performance. Important factors that may cause actual results to differ materially and adversely from those expressed in forward-looking statements include changes in business or other market conditions; outcomes of ongoing litigation; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks detailed from time to time in the Company’s Securities and Exchange Commission filings, including but not limited to the most recently filed Quarterly Report on Form 10-Q and Annual Report on Form 10-K.

Media Relations Contact:

eXp World Holdings, Inc.

mediarelations@expworldholdings.com

Investor Relations Contact:

Denise Garcia

investors@expworldholdings.com

	EXP WORLD HOLDINGS, INC.
	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
	(In thousands, except share amounts and per share data)
			Three Months Ended March 31,
				2024				2023
	Revenues		$	943,054			$	848,453
	Operating expenses
	Commissions and other agent-related costs			864,746				776,838
	General and administrative expenses			62,582				54,626
	Technology and development expenses			14,761				14,060
	Sales and marketing expenses			3,139				2,927
	Litigation contingency			16,000				-
	Total operating expenses			961,228				848,451
	Operating (loss) income			(18,174	)			2
	Other (income) expense
	Other (income) expense, net			(1,188	)			(874	)
	Equity in losses of unconsolidated affiliates			149				342
	Total other (income) expense, net			(1,039	)			(532	)
	Income (loss) before income tax expense			(17,135	)			534
	Income tax (benefit) expense			(3,305	)			(1,458	)
	(Loss) income from continuing operations			(13,830	)			1,992
	(Loss) income from discontinued operations, net of tax			(1,809	)			(539	)
	Net (loss) income		$	(15,639	)		$	1,453
	(Loss) earnings per share
	Basic, (loss) income from continuing operations		$	(0.09	)		$	0.01
	Basic, (loss) income discontinued operations			(0.01	)			(0.00	)
	Basic, net (loss) income			(0.10	)			0.01
	Diluted, (loss) income from continuing operations			(0.09	)			0.01
	Diluted, (loss) income from discontinued operations			(0.01	)			(0.00	)
	Diluted, net (loss) income		$	(0.10	)		$	0.01
	Weighted average shares outstanding
	Basic			154,740,334				152,546,766
	Diluted			154,740,334				155,668,712
	Comprehensive (loss) income:
	Net (loss) income		$	(15,639	)		$	1,453
	Other comprehensive (loss) income:
	Foreign currency translation gain (loss), net of tax			(889	)			643
	Comprehensive (loss) income attributable to eXp World Holdings, Inc.		$	(16,528	)		$	2,096

 

The following tables reflects Revenues and Adjusted Segment EBITDA by reportable segments:

 

SEGMENT REVENUES
(In thousands)
		Three Months Ended March 31,
Revenues			2024				2023
North American Realty		$	927,137			$	837,114
International Realty			15,596				10,758
Other Affiliated Services			1,788				1,677
Revenues reconciliation:			—				—
Segment eliminations			(1,467	)			(1,096	)
Consolidated revenues		$	943,054			$	848,453

 

ADJUSTED SEGMENT EBITDA
(In thousands)
		Three Months Ended March 31,
			2024				2023
North American Realty		$	17,807			$	21,203
International Realty			(3,355	)			(3,676	)
Other Affiliated Services			(767	)			(681	)
Corporate expenses and other			(2,643	)			(2,223	)
Consolidated Adjusted EBITDA		$	11,042			$	14,623

 

 

CONSOLIDATED US-GAAP NET INCOME TO ADJUSTED EBITDA RECONCILIATION
(In thousands)
		Three Months Ended March 31,
			2024				2023
(Loss) income from continuing operations		$	(13,830	)		$	1,992
Other (income) expense, net			(1,039	)			(532	)
Income tax (benefit) expense			(3,305	)			(1,458	)
Depreciation and amortization			2,399				2,215
Litigation contingency			16,000				—
Stock compensation expense (1)			8,827				9,660
Stock option expense			1,990				2,746
Adjusted EBITDA		$	11,042			$	14,623
(1) This includes agent growth incentive stock compensation expense and stock compensation expense related to business acquisitions.

 

 

ADJUSTED OPERATING CASH FLOW
(In thousands)
		Three Months Ended March 31,
			2024			2023
Net Cash Provided by Operating Activities		$	60,654		$	56,144
Less: Customer Deposits			31,239			17,382
Adjusted Operating Cash Flow		$	29,415		$	38,762

 

The following table reflects Adjusted Net Income:

CONSOLIDATED US-GAAP NET INCOME TO ADJUSTED NET INCOME RECONCILIATION
(In thousands)
		Three Months Ended March 31,
			2024				2023
Net (loss) income		$	(15,639	)		$	1,453
Add back:
Net loss from discontinued operations			1,809				539
Litigation contingency			16,000				—
Tax benefit on litigation contingency			(4,595	)			—
Adjusted net (loss) income		$	(2,425	)		$	1,992
(Loss) earnings per share:
Adjusted diluted, net (loss) income		$	(0.02	)		$	0.01
Weighted average shares outstanding
Basic			154,740,334				152,546,766
Diluted			154,740,334				155,668,712

EXP WORLD HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
		March 31, 2024				December 31, 2023
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	109,169			$	125,873
Restricted cash			74,735				44,020
Accounts receivable, net of allowance for credit losses of $2,363 and $2,303, respectively			105,325				85,343
Prepaids and other assets			9,517				9,275
Current assets of discontinued operations			1,631				1,964
TOTAL CURRENT ASSETS			300,377				266,475
Property, plant, and equipment, net			12,231				12,967
Operating lease right-of-use assets			7				10
Other noncurrent assets			11,058				7,400
Intangible assets, net			6,644				7,012
Deferred tax assets			73,955				69,034
Goodwill			16,682				16,982
Noncurrent assets of discontinued operations			5,795				5,788
TOTAL ASSETS		$	426,749			$	385,668
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable		$	8,986			$	8,788
Customer deposits			75,789				44,550
Accrued expenses			102,104				86,483
Litigation contingency			16,000				-
Current portion of lease obligation - operating lease			7				10
Current liabilities of discontinued operations			1,406				1,809
TOTAL CURRENT LIABILITIES			204,292				141,640
Long-term payable			20				20
TOTAL LIABILITIES		$	204,312			$	141,660
EQUITY
Common Stock, $0.00001 par value 900,000,000 shares authorized; 186,361,476 issued and 154,846,563 outstanding at March 31, 2024; 183,606,708 issued and 154,669,037 outstanding at December 31, 2023			2				2
Additional paid-in capital			841,576				804,833
Treasury stock, at cost: 31,514,913 and 28,937,671 shares held, respectively			(578,591	)			(545,559	)
Accumulated deficit			(39,993	)			(16,769	)
Accumulated other comprehensive (loss) income			(557	)			332
Total eXp World Holdings, Inc. stockholders' equity			222,437				242,839
Equity attributable to noncontrolling interest			-				1,169
TOTAL EQUITY			222,437				244,008
TOTAL LIABILITIES AND EQUITY		$	426,749			$	385,668
			-

	EXP WORLD HOLDINGS, INC.
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
	(In thousands)
			Three Months Ended March 31,
				2024				2023
	OPERATING ACTIVITIES
	Net (loss) income		$	(15,639	)		$	1,453
	Reconciliation of net income (loss) to net cash provided by operating activities:						.
	Depreciation expense			2,059				2,067
	Amortization expense - intangible assets			340				512
	Loss on disposition of business			-				-
	Allowance for credit losses on receivables/bad debt on receivables			-				-
	Equity in loss of unconsolidated affiliates			149				342
	Agent growth incentive stock compensation expense			8,827				9,660
	Stock option compensation			1,990				2,761
	Agent equity stock compensation expense			25,868				26,775
	Deferred income taxes, net			(4,786	)			277
	Changes in operating assets and liabilities:			—				—
	Accounts receivable			(20,141	)			(10,808	)
	Prepaids and other assets			(311	)			(3,722	)
	Customer deposits			31,239				17,382
	Accounts payable			197				(1,310	)
	Accrued expenses			14,703				17,200
	Long term payable			-				(4,692	)
	Litigation contingency			16,000				-
	Other operating activities			-				37
	NET CASH PROVIDED BY OPERATING ACTIVITIES			60,654				56,144
	INVESTING ACTIVITIES
	Purchases of property, plant, equipment			(1,323	)			(1,432	)
	Investments in unconsolidated affiliates			(3,807	)			(350	)
	Capitalized software development costs in intangible assets			(115	)			-
	NET CASH USED IN INVESTING ACTIVITIES			(5,245	)			(1,782	)
	FINANCING ACTIVITIES
	Repurchase of common stock			(33,032	)			(29,916	)
	Proceeds from exercise of options			977				307
	Transactions with noncontrolling interests			(1,169	)			-
	Dividends declared and paid			(7,585	)			(6,596	)
	NET CASH USED IN FINANCING ACTIVITIES			(40,809	)			(36,205	)
	Effect of changes in exchange rates on cash, cash equivalents and restricted cash			(589	)			594
	Net change in cash, cash equivalents and restricted cash			14,011				18,751
	Cash, cash equivalents and restricted cash, beginning balance			169,893				159,383
	CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ENDING BALANCE		$	183,904			$	178,134
	SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
	Cash paid for income taxes			1,109				1,089

  

¹ Based on home sales transaction growth and estimated market share. Sources: Industry transactions based on NAR existing home sales (assuming 2 sides per sale) and U.S. Census Bureau new home sales (assuming 1 side per sale).
² A reconciliation of adjusted net (loss) income to net (loss) income and a discussion of why management believes adjusted net (loss) income, a non-GAAP measure, is useful is included below.
³ A reconciliation of adjusted EBITDA to net (loss) income and a discussion of why management believes adjusted EBITDA, a non-GAAP measure, is useful is included below.

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/8235971f-9581-46c0-a18c-1d8ffa0c2bab

 

FAQ

What was eXp World Holdings' revenue growth in Q1 2024?

eXp World Holdings reported an 11% revenue growth in the first quarter of 2024.

How much did eXp Realty agents close in transactions in Q1 2024?

eXp Realty agents closed over $37 billion in transactions during the first quarter of 2024.

What was the net loss in Q1 2024 for eXp World Holdings?

The net loss for eXp World Holdings in the first quarter of 2024 was ($15.6) million.

Who was appointed as the new Chief Executive Officer of eXp Realty in April 2024?

Leo Pareja was named the new Chief Executive Officer of eXp Realty in April 2024.

What was the Adjusted EBITDA of eXp World Holdings in Q1 2024?

eXp World Holdings' Adjusted EBITDA in the first quarter of 2024 was $11.0 million.