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eXp World Holdings Reports Q1 2023 Results

2023-05-02 16:15 ET - News Release

Positive Net Income of $1.5 Million

Agent Count Grew 12% Year Over Year to More Than 87,000 Agents in 24 Global Markets

International Achieves Record Revenue, Increasing 52% Year Over Year

Generated $39 Million of Operating Cash Flow(1)

Company Declares Cash Dividend for Q2 2023 of $0.045 per Share of Common Stock

BELLINGHAM, Wash., May 02, 2023 (GLOBE NEWSWIRE) -- eXp World Holdings, Inc. (Nasdaq: EXPI), (or the “Company”), the holding company for eXp Realty®, Virbela and SUCCESS® Enterprises, today announced financial results for the first quarter ended March 31, 2023.

First Quarter 2023 Consolidated Financial Highlights as Compared to the Same Year-Ago Quarter:

  • Revenue decreased 16% to $850.6 million.
  • Gross profit decreased 12% to $73.1 million.
  • Net income of $1.5 million. Earnings per diluted share of $0.01 compared to earnings per diluted share of $0.06 in the year ago quarter.
  • Adjusted EBITDA (a non-GAAP financial measure) of $13.3 million.
  • As of March 31, 2023, cash and cash equivalents totaled $122.8 million, compared to $130.1 million as of March 31, 2022. The company repurchased approximately $29.9 million of common stock during the first quarter of 2023.
  • The Company paid a cash dividend for the first quarter of 2022 of $0.045 per share of common stock on March 31, 2023. On April 27, 2023, the Company’s Board of Directors declared a cash dividend of $0.045 per share of common stock for the second quarter of 2023, expected to be paid on May 31, 2023 to stockholders of record on May 12, 2023.

Management Commentary

“In 2009, we successfully launched the cloud-based, agent-centric brokerage model, which is now the model for many newer brokerage firms across the industry. As we iterate on the agent value proposition, our focus is to modernize our infrastructure for the next generation of real estate agents,” said Glenn Sanford, Founder, Chairman and CEO of eXp World Holdings. “Our cloud-based model and solid financial foundation enable us to continue investing in synergistic products and technologies that lay the groundwork for the future, while delivering an enhanced agent experience today.

“We continue to grow our agent-centric culture by amplifying our agents’ voices across the organization through our Agent Advisory Councils, masterminds and our strong usage of the Net Promoter® System (NPS), which captures ongoing agent and employee feedback. We’re excited to meet in person at our 9th Annual Shareholder Summit in Orlando from May 17-20, where eXp Realty agents and SUCCESS® coaches will be the main speakers for the event."

"During the first quarter, the financial benefits of our variable cost model were apparent as we generated positive net income and over $39 million of operating cash flow(1) despite the global residential real estate market downturn," said Jeff Whiteside, CFO and Chief Collaboration Officer of eXp World Holdings. "Our International Realty segment had a record revenue quarter with 52% year-over-year growth, and we remain focused on driving durable, profitable growth across the eXp World Holdings portfolio."

First Quarter 2023 Operational Highlights as Compared to the Same Year-Ago Period:

  • Announced partnership with Realty.com, a listings platform that connects qualified sellers and buyers directly with real estate agents, including exclusive enhanced services and pricing.
  • Appointed Peggie Pelosi to the Company’s Board of Directors, effective Jan. 26, 2023.
  • Announced Amy Somerville as Chief Executive Officer, SUCCESS Enterprises.
  • Agents and brokers on the eXp Realty platform increased 12% to 87,327 as of March 31, 2023.
  • Real estate transactions closed decreased 10% to 102,305.
  • Real estate transaction volume decreased 20% to $33.2 billion.
  • eXp Realty ended the first quarter of 2023 with a global Net Promoter Score of 70, a measure of agent satisfaction, as part of the Company’s intense focus on improving the agent experience.

(1) Operating cash flow presented is net cash provided by operating activities excluding change in customer deposits.

First Quarter 2023 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 and CFO Jeff Whiteside on Tuesday, May 2, 2023 at 2 p.m. PT / 5 p.m. ET.

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

Date: Tuesday, May 2, 2023

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

Location: EXPI Campus. Join at https://expworldholdings.com/contact/download/

Livestream: expworldholdings.com/events

About eXp World Holdings, Inc.
eXp World Holdings, Inc. (Nasdaq: EXPI) is the holding company for eXp Realty®, Virbela and SUCCESS® Enterprises. eXp Realty is the fastest-growing real estate company in the world with more than 87,000 agents in the United States, Canada, the United Kingdom, Australia, South Africa, India, Mexico, Portugal, France, Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Panama, Germany, 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 its innovative residential and commercial brokerage model, professional services, collaborative tools and personal development. The cloud-based brokerage is powered by Virbela, an immersive 3D platform that is 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.

Use of Non-GAAP Financial Measures

To provide investors with additional information regarding our financial results, this press release includes references to Adjusted EBITDA, which is a non-U.S. GAAP financial measure and may be different than similarly titled measures used by other companies. It is 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 Adjusted EBITDA provides useful information about financial performance, enhances the overall understanding of past performance and future prospects, and allows for greater transparency with respect to a key metric used by management for financial and operational decision-making. Adjusted EBITDA helps identify underlying trends in the business that otherwise could be masked by the effect of the expenses that are 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 the non-U.S. GAAP financial measure of Adjusted EBITDA to mean net income (loss), excluding other income (expense), income tax benefit (expense), depreciation, amortization, impairment charges, stock-based compensation expense, and stock option expense. Adjusted EBITDA may assist investors in seeing financial performance through the eyes of management, and may provide an additional tool for investors to use in comparing core financial performance over multiple periods with other companies in the industry.

Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP. There are a number of limitations related to the use of Adjusted EBITDA compared to Net Income (Loss), the closest comparable U.S. GAAP measure. Some of these limitations are that:

  • Adjusted EBITDA excludes stock-based compensation expense and stock option expense, which have been, and will continue to be for the foreseeable future, significant recurring expenses in the business and an important part of the compensation strategy; and
  • Adjusted EBITDA excludes certain recurring, non-cash charges such as depreciation of fixed assets, amortization of acquired intangible assets, and impairment charges related to these long-lived assets, and, although these are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future.

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 the continued growth of our agent and broker base; expansion of our residential real estate brokerage business into foreign markets; and revenue growth 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; 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,
 2023 2022
Revenues$850,616  $1,010,731 
Operating expenses   
Commissions and other agent-related costs 777,559   927,267 
General and administrative expenses 71,767   75,322 
Sales and marketing expenses 2,963   3,700 
Total operating expenses 852,289   1,006,289 
Operating (loss) income (1,673)  4,442 
Other (income) expense   
Other (income) expense, net (880)  410 
Equity in losses of unconsolidated affiliates 342   317 
Total other (income) expense, net (538)  727 
(Loss) income before income tax expense (1,135)  3,715 
Income tax benefit (2,588)  (5,149)
Net income 1,453   8,864 
Net income attributable to noncontrolling interest -   18 
Net income attributable to eXp World Holdings, Inc.$1,453  $8,882 
Earnings per share   
Basic 0.01   0.06 
Diluted 0.01   0.06 
Weighted average shares outstanding   
Basic 152,546,766   149,226,166 
Diluted 155,668,712   156,842,721 

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

SEGMENT REVENUES
(In thousands)
 
 Three Months Ended March 31,
Revenues2023 2022
North American Realty$837,114  $1,001,880 
International Realty 10,758   7,094 
Virbela 2,163   1,813 
Other Affiliated Services 1,677   838 
Revenues reconciliation:   
Segment eliminations (1,096)  (894)
Consolidated revenues$850,616  $1,010,731 


ADJUSTED SEGMENT EBITDA
(In thousands)
 
 Three Months Ended March 31,
 2023
 2022
North American Realty$21,203  $28,770 
International Realty (3,676)  (1,956)
Virbela (1,296)  (2,771)
Other Affiliated Services (681)  (829)
Corporate expenses and other (2,223)  (5,505)
Consolidated Adjusted EBITDA$13,327  $17,709 


CONSOLIDATED US-GAAP NET INCOME TO ADJUSTED EBITDA RECONCILIATION
(In thousands)
 
 Three Months Ended March 31,
 2023
 2022
Net income$1,453  $8,864 
Other (income) expense, net (538)  727 
Income tax benefit (2,588)  (5,149)
Depreciation and amortization 2,579   1,958 
Stock compensation expense(1) 9,660   7,798 
Stock option expense 2,761   3,511 
Adjusted EBITDA$13,327  $17,709 
    
(1)This includes agent growth incentive stock compensation expense and stock compensation expense related to business acquisitions.


EXP WORLD HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
    
 March 31, 2023 December 31, 2022
    
ASSETS   
CURRENT ASSETS   
Cash and cash equivalents$122,769  $121,594 
Restricted cash 55,365   37,789 
Accounts receivable, net of allowance for credit losses of $2,224 and $4,014, respectively 99,860   87,262 
Prepaids and other assets 12,253   8,468 
TOTAL CURRENT ASSETS 290,247   255,113 
Property, plant, and equipment, net 14,075   18,151 
Operating lease right-of-use assets 2,075   2,127 
Other noncurrent assets 1,711   1,703 
Intangible assets, net 11,565   8,700 
Deferred tax assets 68,399   68,676 
Goodwill 27,261   27,212 
TOTAL ASSETS$415,333  $381,682 
LIABILITIES AND EQUITY   
CURRENT LIABILITIES   
Accounts payable$9,080  $10,391 
Customer deposits 55,171   37,789 
Accrued expenses 97,137   78,944 
Current portion of lease obligation - operating lease 159   175 
TOTAL CURRENT LIABILITIES 161,547   127,299 
Long-term payable 5   4,697 
Long-term lease obligation - operating lease, net of current portion 694   694 
TOTAL LIABILITIES 162,246   132,690 
EQUITY   
Common Stock, $0.00001 par value 900,000,000 shares authorized; 174,532,043 issued and 153,442,421 outstanding at March 31, 2023; 171,656,030 issued and 152,839,239 outstanding at December 31, 2022 2   2 
Additional paid-in capital 650,383   611,872 
Treasury stock, at cost: 21,089,622 and 18,816,791 shares held, respectively (414,926)  (385,010)
Accumulated earnings 15,580   20,723 
Accumulated other comprehensive income 879   236 
Total eXp World Holdings, Inc. stockholders' equity 251,918   247,823 
Equity attributable to noncontrolling interest 1,169   1,169 
TOTAL EQUITY 253,087   248,992 
TOTAL LIABILITIES AND EQUITY$415,333  $381,682 


EXP WORLD HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
 Three Months Ended March 31,
 2023 2022
OPERATING ACTIVITIES   
Net income$1,453  $8,864 
Reconciliation of net income to net cash provided by operating activities:   
Depreciation expense 2,067   1,616 
Amortization expense - intangible assets 512   342 
Loss on dissolution of consolidated affiliates -   361 
Allowance for credit losses on receivables/bad debt on receivables (1,790)  219 
Equity in loss of unconsolidated affiliates 342   317 
Agent growth incentive stock compensation expense 9,660   7,798 
Stock option compensation 2,761   3,511 
Agent equity stock compensation expense 26,775   38,500 
Deferred income taxes, net 277   (5,901)
Changes in operating assets and liabilities:   
Accounts receivable (10,808)  (9,846)
Prepaids and other assets (3,722)  496 
Customer deposits 17,382   49,266 
Accounts payable (1,310)  74 
Accrued expenses 17,200   15,854 
Long term payable (4,692)  - 
Other operating activities 37   36 
NET CASH PROVIDED BY OPERATING ACTIVITIES 56,144   111,507 
INVESTING ACTIVITIES   
Purchases of property, plant, equipment & intangible assets (1,432)  (4,684)
Investments in unconsolidated affiliates (350)  - 
NET CASH USED IN INVESTING ACTIVITIES (1,782)  (4,684)
FINANCING ACTIVITIES   
Repurchase of common stock (29,916)  (29,956)
Proceeds from exercise of options 307   498 
Transactions with noncontrolling interests -   (426)
Dividends declared and paid (6,596)  (5,859)
NET CASH USED IN FINANCING ACTIVITIES (36,205)  (35,743)
Effect of changes in exchange rates on cash, cash equivalents and restricted cash 594   41 
Net change in cash, cash equivalents and restricted cash 18,751   71,121 
Cash, cash equivalents and restricted cash, beginning balance 159,383   175,910 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ENDING BALANCE$178,134  $247,031 
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:   
Cash paid for income taxes$1,089  $483 
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:   
Property, plant and equipment purchases in accounts payable -   246 

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/29f2a7b0-1a5f-4c6f-9a7b-68d7bc2f7131

 

 


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eXp World Holdings Reports Q1 2023 Results

Positive Net Income of $1.5 Million; Agent Count Grew 12% Year Over Year to More Than 87,000 Agents in 24 Global Markets; International Achieves Record Revenue, Increasing 52% Year Over Year

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