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eXp World Holdings Reports Q4 and Full-Year 2023 Results

2024-02-22 16:15 ET - News Release

BELLINGHAM, Wash., Feb. 22, 2024 (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 fourth quarter and fiscal year ended Dec. 31, 2023.

Fourth Quarter and Full-Year 2023 Consolidated Financial Highlights as Compared to the Same Year-Ago Period:

  • Full-year revenue decreased (7)% to $4.3 billion in 2023 with revenue of $983 million in the fourth quarter of 2023.
  • Full-year gross profit decreased (12)% to $324.1 million in 2023 with gross profit of $70.9 million in the fourth quarter of 2023.
  • Full-year net loss of $(9.0) million in 2023 with net loss of $(21.2) million in the fourth quarter of 2023. Fourth quarter net loss included a $9.2 million impairment charge for goodwill and amortizable intangible assets related to the Virbela segment.
  • Full-year loss per diluted share of $(0.06) in 2023 with a loss per diluted share of $(0.14) in the fourth quarter of 2023.
  • Full-year adjusted EBITDA1 (a non-GAAP financial measure) of $57.5 million in 2023. Adjusted EBITDA was $0.5 million in the fourth quarter of 2023.
  • As of Dec. 31, 2023, cash and cash equivalents totaled $126.9 million, compared to $121.6 million as of Dec. 31, 2022.
  • Distributed $189.1 million to shareholders in fiscal 2023, including approximately $160.6 million of common stock repurchases and $28.5 million of cash dividends.
  • The Company paid a cash dividend for the fourth quarter of 2023 of $0.05 per share of common stock on Nov. 30, 2023. On Feb. 14, 2024, the Company’s Board of Directors declared a cash dividend of $0.05 per share of common stock for the first quarter of 2024, expected to be paid on March 29, 2024 to stockholders of record on March 8, 2024.

Management Commentary

“eXp delivered solid revenue in the fourth quarter, despite continued weakness in the United States residential real estate market, thanks to our global base of highly productive agents,” said Glenn Sanford, Founder, Chairman and CEO of eXp World Holdings. “Our agent-centric model and value proposition, scale and superior efficiency enable us to invest in the success of our agents.

“In fact, agent loyalty, as measured by agent Net Promoter Score (aNPS), reached record levels for both the fourth quarter and full-year 2023. We will continue to iterate on the agent value proposition through our ongoing commitment to agent-centric innovation, with a particular focus on enhancing agent support and reducing time spent on non-revenue-generating, repetitive tasks. From onboarding, to support, to real-time payments and more, we are utilizing next-generation technologies such as artificial intelligence to streamline core business processes to enable our agents to reach their goals faster than ever before.”

“Despite a challenged real estate market, we continued to gain market share during the fourth quarter of 2023 and maintained positive Adjusted EBITDA1,” said Kent Cheng, Principal Financial Officer of eXp World Holdings. “And while our decision to offboard a significant number of unproductive agents during the fourth quarter resulted in a decrease in our agent count quarter-over-quarter, the retention of our most productive agent cohorts remained excellent, and our fourth quarter revenue increased 5% year-over-year. In the fourth quarter, we also took several strategic actions to improve our profitability, with expected benefits to revenue and operating expenses in 2024. Our automation and other cost savings initiatives, combined with recent revenue enhancements, represent a potential $20 million annualized benefit to our future operating results. We will remain vigilant on costs and focused on increasing our operational flexibility in light of current uncertainties in the industry.

“Looking ahead, we plan to fund continued investments in agent productivity through ongoing efficiency initiatives. I am confident that eXp will emerge from the current market downturn in a strong position to capitalize on future market growth opportunities and deliver accelerated growth as the residential real estate market recovers.”

Fourth Quarter and Full-Year 2023 Operational Highlights as Compared to the Same Year-Ago Period:

  • eXp ended the fourth quarter of 2023 with a global agent Net Promoter Score of 77, up from 73 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 increased 2% year-over-year to 87,515 as of Dec. 31, 2023.
  • Transactions decreased 3% to 494,408 in 2023 and increased 6% year-over-year to 115,424 in the fourth quarter of 2023.
  • Transaction volume decreased 10% to $169.2 billion in 2023 and increased 3% year-over-year to $38.9 billion in the fourth quarter of 2023.
  • Launched eXp Luxury™ in Australia, New Zealand, South Africa and the United Kingdom on Dec. 7, 2023.
  • Announced eXp Luxury™ soared past 1,100 members, fueling global growth, on Nov. 21, 2023.

Fourth Quarter and Full-Year 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, eXp Realty Chief Strategy Officer Leo Pareja and eXp World Holdings Principal Financial Officer Kent Cheng on Thursday, Feb. 22, 2024 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: Thursday, Feb. 22, 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®, Virbela® and SUCCESS® Enterprises.

eXp Realty is the largest independent real estate company in the world with more than 87,000 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 Virbela and Frame technologies, 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 press release includes references to Adjusted EBITDA and Adjusted Operating Cash Flow, which are non-U.S. GAAP financial measures that may be different than 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 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. The Company defines the non-U.S. GAAP financial measure of Adjusted Operating Cash Flow to mean net cash provided by operating activities, excluding the change in customer deposits. Adjusted EBITDA and Adjusted Operating Cash Flow 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 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. 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:

  • 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, 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 future cost saving measures; the continued growth of our agent and broker base; improvements in technology and operational processes; revenue growth; dividends; financial performance; and growth in market share. 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 December 31, Year Ended December 31,
   2023   2022   2023   2022 
Revenues $983,049  $933,395  $4,281,105  $4,598,161 
Operating expenses        
Commissions and other agent-related costs  912,196   850,332   3,957,054   4,231,262 
General and administrative expenses  86,277   89,959   319,153   346,132 
Sales and marketing expenses  3,121   3,813   12,156   15,359 
Impairment expense  9,203   -   9,203   - 
Total operating expenses  1,010,797   944,104   4,297,566   4,592,753 
Operating (loss) income  (27,748)  (10,709)  (16,461)  5,408 
Other (income) expense        
Other (income) expense, net  (1,527)  (1,198)  (4,414)  (804)
Equity in losses of unconsolidated affiliates  549   411   1,388   1,624 
Total other (income) expense, net  (978)  (787)  (3,026)  820 
Income (loss) before income tax expense  (26,770)  (9,922)  (13,435)  4,588 
Income tax (benefit) expense  (5,573)  (2,721)  (4,462)  (10,836)
Net (loss) income  (21,197)  (7,201)  (8,973)  15,424 
Net (loss) income attributable to noncontrolling interest  -   -   -   18 
Net (loss) income attributable to eXp World Holdings, Inc. $(21,197) $(7,201) $(8,973) $15,442 
(Loss) earnings per share        
Basic  (0.14)  (0.05)  (0.06)  0.10 
Diluted  (0.14)  (0.05)  (0.06)  0.10 
Weighted average shares outstanding        
Basic  153,725,911   152,316,335   153,232,129   151,036,110 
Diluted  153,725,911   155,158,879   153,232,129   156,220,165 
         

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

SEGMENT REVENUES
(In thousands)
 
  Three Months Ended December 31,  Year Ended December 31,
Revenues     2023      2022   2023      2022 
North American Realty $965,397  $920,662  $4,220,063  $4,552,938 
International Realty  16,287   9,776   53,931   35,924 
Virbela  1,590   2,304   7,284   8,485 
Other Affiliated Services  1,073   1,786   4,802   5,084 
Revenues reconciliation:        
Segment eliminations  (1,298)  (1,133)  (4,975)  (4,270)
Consolidated revenues $983,049  $933,395  $4,281,105  $4,598,161 
         


ADJUSTED SEGMENT EBITDA
(In thousands)
 
  Three Months Ended December 31,  Year Ended December 31,
      2023      2022   2023      2022 
North American Realty $8,605  $12,140  $91,101  $103,255 
International Realty  (3,552)  (4,124)  (13,657)  (13,708)
Virbela  (1,936)  (958)  (5,725)  (9,642)
Other Affiliated Services  (1,028)  (461)  (3,795)  (2,600)
Corporate expenses and other  (1,547)  (3,019)  (10,376)  (16,756)
Consolidated Adjusted EBITDA $542  $3,578  $57,548  $60,549 
         


CONSOLIDATED US-GAAP NET INCOME TO ADJUSTED EBITDA RECONCILIATION
(In thousands)
 
  Three Months Ended December 31,  Year Ended December 31,
      2023      2022   2023      2022 
Net income $(21,197) $(7,201) $(8,973) $15,424 
Other (income) expense, net  (978)  (787)  (3,026)  820 
Income tax (benefit) expense  (5,573)  (2,721)  (4,462)  (10,836)
Depreciation and amortization  2,744   2,684   10,892   9,838 
Impairment expense  9,203      9,203    
Stock compensation expense (1)  13,266   8,033   43,178   30,861 
Stock option expense  3,077   3,570   10,736   14,442 
Adjusted EBITDA $542  $3,578  $57,548  $60,549 
         
(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 December 31,  Year Ended December 31,
      2023      2022   2023     2022 
Net Cash Provided by Operating Activities $32,615  $23,211  $209,131 $210,535 
Less: Customer Deposits  (9,660)  (14,863)  6,761  (30,998)
Adjusted Operating Cash Flow $42,275  $38,074  $202,370 $241,533 
         


EXP WORLD HOLDINGS, INC.
 CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
     
  December 31, 2023 December 31, 2022
     
ASSETS    
CURRENT ASSETS    
Cash and cash equivalents $126,864  $121,594 
Restricted cash  44,020   37,789 
Accounts receivable, net of allowance for credit losses of $2,303 and $4,014, respectively  85,969   87,262 
Prepaids and other assets  9,622   8,468 
TOTAL CURRENT ASSETS  266,475   255,113 
Property, plant, and equipment, net  12,978   18,151 
Operating lease right-of-use assets  10   2,127 
Other noncurrent assets  7,400   1,703 
Intangible assets, net  10,481   8,700 
Deferred tax assets  71,342   68,676 
Goodwill  16,982   27,212 
TOTAL ASSETS $385,668  $381,682 
LIABILITIES AND EQUITY    
CURRENT LIABILITIES    
Accounts payable $8,898  $10,391 
Customer deposits  44,550   37,789 
Accrued expenses  88,182   78,944 
Current portion of lease obligation - operating lease  10   175 
TOTAL CURRENT LIABILITIES  141,640   127,299 
Long-term payable  20   4,697 
Long-term lease obligation - operating lease, net of current portion  -   694 
TOTAL LIABILITIES  141,660   132,690 
EQUITY    
Common Stock, $0.00001 par value 900,000,000 shares authorized; 183,606,708 issued and 154,669,037 outstanding at December 31, 2023; 171,656,030 issued and 152,839,239 outstanding at December 31, 2022  2   2 
Additional paid-in capital  804,833   611,872 
Treasury stock, at cost: 28,937,671 and 18,816,791 shares held, respectively  (545,559)  (385,010)
Accumulated earnings  (16,769)  20,723 
Accumulated other comprehensive income  332   236 
Total eXp World Holdings, Inc. stockholders' equity  242,839   247,823 
Equity attributable to noncontrolling interest  1,169   1,169 
TOTAL EQUITY  244,008   248,992 
TOTAL LIABILITIES AND EQUITY $385,668  $381,682 
     


EXP WORLD HOLDINGS, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
  Year Ended December 31,
   2023   2022 
OPERATING ACTIVITIES    
Net (loss) income $(8,973) $15,424 
Reconciliation of net income to net cash provided by operating activities:    
Depreciation expense  8,352   7,934 
Amortization expense - intangible assets  2,540   1,904 
Impairment expense  9,203   - 
Loss on disposition of business  472   361 
Allowance for credit losses on receivables/bad debt on receivables  (1,711)  1,816 
Equity in loss of unconsolidated affiliates  1,388   1,624 
Agent growth incentive stock compensation expense  43,178   30,861 
Stock option compensation  10,736   14,442 
Agent equity stock compensation expense  135,226   164,104 
Deferred income taxes, net  (2,666)  (15,848)
Changes in operating assets and liabilities:    
Accounts receivable  3,474   44,935 
Prepaids and other assets  (1,263)  1,652 
Customer deposits  6,761   (30,998)
Accounts payable  (1,491)  2,432 
Accrued expenses  8,424   (32,239)
Long term payable  (4,677)  1,983 
Other operating activities  158   148 
NET CASH PROVIDED BY OPERATING ACTIVITIES  209,131   210,535 
INVESTING ACTIVITIES    
Purchases of property, plant, equipment  (5,363)  (12,051)
Proceeds from sale of business  330   - 
Acquisition of business, net of cash acquired  -   (9,910)
Investments in unconsolidated affiliates  (5,876)  (500)
Capitalized software development costs in intangible assets  (2,594)  - 
NET CASH USED IN INVESTING ACTIVITIES  (13,503)  (22,461)
FINANCING ACTIVITIES    
Repurchase of common stock  (160,550)  (179,473)
Proceeds from exercise of options  4,980   612 
Transactions with noncontrolling interests  -   (424)
Dividends declared and paid  (28,519)  (25,229)
NET CASH USED IN FINANCING ACTIVITIES  (184,089)  (204,514)
Effect of changes in exchange rates on cash, cash equivalents and restricted cash  (38)  (87)
Net change in cash, cash equivalents and restricted cash  11,501   (16,527)
Cash, cash equivalents and restricted cash, beginning balance  159,383   175,910 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ENDING BALANCE $170,884  $159,383 
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:    
Cash paid for income taxes  2,731   3,406 
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:    
Termination of lease obligation - operating lease  859   - 
Issuance of treasury stock, for acquisition  -   4,554 
Contingent consideration for disposition of business  1,209   - 
Property, plant and equipment increase due to transfer of right-of-use lease asset  1,100   - 
Property, plant and equipment purchases in accounts payable  63   63 
     

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/88f88607-73f8-42b1-a002-ee50982e0c39

1 A reconciliation of non-GAAP results to the most directly comparable GAAP measures and a discussion of why management believes these non-GAAP results are useful are included below.

 


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eXp World Holdings Reports Q4 and Full-Year 2023 Results

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 fourth quarter and fiscal year ended Dec. 31, 2023.

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