Q3 2022 Revenue Increased 12% Year over Year to $1.2 Billion With Agent Growth of 30%
Company Declares Cash Dividend for Q4 2022 of $0.045 per Share of Common Stock
Repurchases Approximately $60 Million of Common Stock During the Third Quarter
BELLINGHAM, Wash., Nov. 02, 2022 (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 third quarter ended Sept. 30, 2022.
Third Quarter 2022 Financial Highlights as Compared to the Same Year-Ago Quarter:
- Revenue increased 12% to $1.2 billion.
- Gross profit increased 17% to $93.1 million.
- Net income of $4.4 million, compared to net income of $23.8 million in the year-ago quarter. Earnings per diluted share of $0.03, compared to earnings per diluted share of $0.15 in the year-ago quarter.
- Adjusted EBITDA (a non-GAAP financial measure) of $12.3 million.
- As of Sept. 30, 2022, cash and cash equivalents totaled $134.5 million, compared to $98.1 million as of Sept. 30, 2021. The Company repurchased approximately $59.8 million of common stock during the third quarter of 2022.
- The Company paid a cash dividend for the third quarter of 2022 of $0.045 per share of common stock on Aug. 29, 2022. On Oct. 27, 2022, the Company’s Board of Directors declared a cash dividend of $0.045 per share of common stock for the fourth quarter of 2022, expected to be paid on Nov. 28, 2022 to stockholders of record on Nov. 14, 2022.
Management Commentary
“We continue to grow revenue and gain market share despite an increasingly challenging market,” said Glenn Sanford, Founder, Chairman and CEO of eXp World Holdings. “The third quarter reflects eXp’s resilient model and ability to grow through any market. We continued to strengthen our agent value proposition with new services, including Revenos and eXp Luxury as well as initiatives led by SUCCESS®, SUCCESS Health™ and SUCCESS Coaching™.”
He continued, “Our scale enables us to provide a differentiated platform for agents with the extensive resources and tools they need to be successful, both professionally and personally. eXp continues to be an attractive model for leading teams and independent brokerages and we were pleased to welcome several during the quarter, helping drive agent count to over 85,000 today.”
“eXp delivered a record third quarter with 12% revenue growth and continued to deliver positive cash flow and earnings, reflecting the agility of our business model,” said Jeff Whiteside, CFO and Chief Collaboration Officer of eXp World Holdings. “We continue to gain market share and drive growth while focusing on increasing operating efficiencies for our business and our agents. Our industry-leading efficiency enables us to be the most agent-centric brokerage on the planet and positions us to increase our market leadership in a changing landscape. As we head into a seasonally slower quarter, we remain confident in our ability to deliver market share growth over the long term.”
Third Quarter 2022 Operational Highlights as Compared to the Same Year-Ago Quarter:
- eXp Realty named Michael Valdes Chief Growth Officer.
- SUCCESS Enterprises strengthened its leadership team, appointing Courtney Keating as Chief Operating Officer in addition to her role as Chief Marketing Officer, eXp World Holdings; and welcoming Tristan Ahumada as Chief Marketing Officer, SUCCESS.
- Agents and brokers on the eXp Realty platform increased 30% to 84,911 as of Sept. 30, 2022.
- Real estate transactions closed increased 6% to 138,354.
- Real estate transaction volume increased 8% to $50.4 billion.
- eXp Realty expanded into Chile and Poland in the third quarter of 2022.
- eXp Realty announced new service offerings including Revenos™, to deliver high-quality buyer and seller referrals for eXp Realty agents; eXp Solutions, a marketplace for agents and their clients; eXp Luxury, enhanced customer service offerings and luxury capabilities; and eXp Referral Division, to enable agents who want to focus solely on building their referral business.
- SUCCESS Enterprises launched SUCCESS Health, to provide eXp agents and consumers the health and wellness tools and resources that help them excel in their personal and professional lives.
- eXp Realty ended the third quarter of 2022 with a global Net Promoter Score of 71, a measure of agent satisfaction as part of the Company’s intense focus on improving the agent experience.
Third Quarter 2022 Results – Virtual Fireside Chat
The Company will hold a virtual fireside chat and investor Q&A on Wednesday, Nov. 2, 2022 at 8 a.m. PT / 11 a.m. ET with:
- Glenn Sanford, Founder, Chairman and CEO, eXp World Holdings
- Jeff Whiteside, CFO and Chief Collaboration Officer, eXp World Holdings
The discussion will be moderated by Tom White, Managing Director and Senior Research Analyst, D. A. Davidson.
The investor Q&A is open to investors, current shareholders and anyone interested in learning more about eXp World Holdings and its companies.
Date: Wednesday, Nov. 2, 2022
Time: 8 a.m. PT / 11 a.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 85,000 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, and Poland 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. Such forward-looking statements speak only as of the date hereof, and the company undertakes no obligation to revise or update them. 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 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
Managing Partner, Hayflower Partners
investors@expworldholdings.com
| EXP WORLD HOLDINGS, INC. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (In thousands, except share amounts) | ||||||||
| September 30, 2022 | December 31, 2021 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 134,545 | $ | 108,237 | ||||
| Restricted cash | 52,652 | 67,673 | ||||||
| Accounts receivable, net of allowance for credit losses of $2,786 and $2,198, respectively | 119,822 | 133,489 | ||||||
| Prepaids and other assets | 13,167 | 9,916 | ||||||
| TOTAL CURRENT ASSETS | 320,186 | 319,315 | ||||||
| Property, plant, and equipment, net | 17,689 | 15,902 | ||||||
| Operating lease right-of-use assets | 2,217 | 2,482 | ||||||
| Other noncurrent assets | 1,614 | 2,827 | ||||||
| Intangible assets, net | 8,975 | 7,528 | ||||||
| Deferred tax assets | 63,672 | 52,827 | ||||||
| Goodwill | 26,514 | 12,945 | ||||||
| TOTAL ASSETS | $ | 440,867 | $ | 413,826 | ||||
| LIABILITIES AND EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | 9,911 | $ | 7,158 | ||||
| Customer deposits | 52,652 | 67,673 | ||||||
| Accrued expenses | 117,605 | 111,672 | ||||||
| Current portion of lease obligation – operating lease | 202 | 311 | ||||||
| TOTAL CURRENT LIABILITIES | 180,370 | 186,814 | ||||||
| Long-term payable | 2,714 | 2,714 | ||||||
| Long-term lease obligation – operating lease, net of current portion | 720 | 765 | ||||||
| TOTAL LIABILITIES | 183,804 | 190,293 | ||||||
| EQUITY | ||||||||
| Common Stock, $0.00001 par value 900,000,000 shares authorized; 168,562,464 issued and 152,702,078 outstanding in 2022; 155,516,284 issued and 148,764,592 outstanding in 2021 | 2 | 1 | ||||||
| Additional paid-in capital | 567,594 | 401,479 | ||||||
| Treasury stock, at cost: 15,860,386 and 6,751,692 shares held, respectively | (344,844 | ) | (210,009 | ) | ||||
| Accumulated earnings | 34,616 | 30,510 | ||||||
| Accumulated other comprehensive income(loss) | (1,474 | ) | 188 | |||||
| Total eXp World Holdings, Inc. stockholders’ equity | 255,894 | 222,169 | ||||||
| Equity attributable to noncontrolling interest | 1,169 | 1,364 | ||||||
| TOTAL EQUITY | 257,063 | 223,533 | ||||||
| TOTAL LIABILITIES AND EQUITY | $ | 440,867 | $ | 413,826 | ||||
| EXP WORLD HOLDINGS, INC. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (In thousands, except share amounts and per share data) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended September 31, | Nine Months Ended September 31, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenues | $ | 1,238,975 | $ | 1,110,480 | $ | 3,664,766 | $ | 2,694,200 | ||||||||
| Operating expenses | ||||||||||||||||
| Commissions and other agent-related costs | 1,145,853 | 1,030,937 | 3,380,930 | 2,481,254 | ||||||||||||
| General and administrative expenses | 89,460 | 64,615 | 256,173 | 171,636 | ||||||||||||
| Sales and marketing expenses | 3,636 | 3,761 | 11,546 | 8,701 | ||||||||||||
| Total operating expenses | 1,238,949 | 1,099,313 | 3,648,649 | 2,661,591 | ||||||||||||
| Operating income | 26 | 11,167 | 16,117 | 32,609 | ||||||||||||
| Other (income) expense | ||||||||||||||||
| Other (income) expense, net | (78 | ) | 239 | 394 | 159 | |||||||||||
| Equity in (income) losses of unconsolidated affiliates | 329 | (2 | ) | 1,213 | 5 | |||||||||||
| Total other (income) expense, net | 251 | 237 | 1,607 | 164 | ||||||||||||
| Income (loss) before income tax expense | (225 | ) | 10,930 | 14,510 | 32,445 | |||||||||||
| Income tax benefit | (4,627 | ) | (12,884 | ) | (8,115 | ) | (33,258 | ) | ||||||||
| Net income | 4,402 | 23,814 | 22,625 | 65,703 | ||||||||||||
| Net income attributable to noncontrolling interest | – | 7 | 18 | 14 | ||||||||||||
| Net income attributable to eXp World Holdings, Inc. | $ | 4,402 | $ | 23,821 | $ | 22,643 | $ | 65,717 | ||||||||
| Earnings per share | ||||||||||||||||
| Basic | 0.03 | 0.16 | 0.15 | 0.45 | ||||||||||||
| Diluted | 0.03 | 0.15 | 0.14 | 0.42 | ||||||||||||
| Weighted average shares outstanding | ||||||||||||||||
| Basic | 151,826,315 | 146,862,978 | 150,622,845 | 145,610,008 | ||||||||||||
| Diluted | 155,915,307 | 157,345,924 | 156,434,440 | 157,838,134 | ||||||||||||
| EXP WORLD HOLDINGS, INC. | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
| Nine Months Ended September 31, | ||||||||
| 2022 | 2021 | |||||||
| OPERATING ACTIVITIES | ||||||||
| Net income | $ | 22,625 | $ | 65,703 | ||||
| Reconciliation of net income to net cash provided by operating activities: | ||||||||
| Depreciation expense | 5,699 | 3,572 | ||||||
| Amortization expense – intangible assets | 1,455 | 939 | ||||||
| Loss on dissolution of consolidated affiliates | 361 | – | ||||||
| Allowance for credit losses on receivables/bad debt on receivables | 588 | 22 | ||||||
| Equity in loss of unconsolidated affiliates | 1,213 | 5 | ||||||
| Agent growth incentive stock compensation expense | 22,828 | 18,129 | ||||||
| Stock option compensation | 10,872 | 9,608 | ||||||
| Agent equity stock compensation expense | 131,230 | 101,691 | ||||||
| Deferred income taxes, net | (10,845 | ) | (36,020 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 13,603 | (52,913 | ) | |||||
| Prepaids and other assets | (3,003 | ) | (1,510 | ) | ||||
| Customer deposits | (16,135 | ) | 41,625 | |||||
| Accounts payable | 1,952 | 4,597 | ||||||
| Accrued expenses | 4,770 | 44,561 | ||||||
| Long term payable | – | (150 | ) | |||||
| Other operating activities | 111 | (1,446 | ) | |||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 187,324 | 198,413 | ||||||
| INVESTING ACTIVITIES | ||||||||
| Purchases of property, plant and equipment | (9,222 | ) | (9,159 | ) | ||||
| Acquisition of businesses, net of cash acquired | (9,668 | ) | (1,500 | ) | ||||
| Investments in unconsolidated affiliates | – | (3,004 | ) | |||||
| NET CASH (USED IN) INVESTING ACTIVITIES | (18,890 | ) | (13,663 | ) | ||||
| FINANCING ACTIVITIES | ||||||||
| Repurchase of common stock | (139,635 | ) | (142,103 | ) | ||||
| Proceeds from exercise of options | 2,221 | 2,695 | ||||||
| Transactions with noncontrolling interests | (425 | ) | 19 | |||||
| Dividends declared and paid | (18,537 | ) | (5,755 | ) | ||||
| NET CASH USED IN FINANCING ACTIVITIES | (156,376 | ) | (145,144 | ) | ||||
| Effect of changes in exchange rates on cash, cash equivalents and restricted cash | (771 | ) | (60 | ) | ||||
| Net change in cash, cash equivalents and restricted cash | 11,287 | 39,546 | ||||||
| Cash, cash equivalents and restricted cash, beginning balance | 175,910 | 127,924 | ||||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ENDING BALANCE | $ | 187,197 | $ | 167,470 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: | ||||||||
| Cash paid for interest | ||||||||
| Cash paid for income taxes | $ | 2,933 | $ | 1,060 | ||||
| SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Termination of lease liabilities | – | 346 | ||||||
| Issuance of treasury stock, for acquisition | 4,800 | – | ||||||
| Lease liabilities arising from obtaining right-of-use assets | – | 2,381 | ||||||
| Property, plant and equipment purchases in accounts payable | 20 | 150 | ||||||
| US-GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA RECONCILIATION | ||||||||||||||||
| (In thousands) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended September 31, | Nine Months Ended September 31, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Net income | $ | 4,402 | $ | 23,814 | $ | 22,625 | $ | 65,703 | ||||||||
| Other expense, net | 251 | 237 | 1,607 | 164 | ||||||||||||
| Income tax benefit | (4,627 | ) | (12,884 | ) | (8,115 | ) | (33,258 | ) | ||||||||
| Depreciation and amortization(1) | 2,767 | 1,694 | 7,154 | 4,511 | ||||||||||||
| Stock compensation expense(2) | 5,800 | 6,817 | 22,828 | 18,129 | ||||||||||||
| Stock option expense | 3,756 | 3,376 | 10,872 | 9,608 | ||||||||||||
| Adjusted EBITDA | $ | 12,349 | $ | 23,054 | $ | 56,971 | $ | 64,857 | ||||||||
| (1)Amortization of stock liability is included in the “Other expense (income)” line item. | ||||||||||||||||
| (2)This includes agent growth incentive stock compensation expense and stock compensation expense related to business acquisitions. | ||||||||||||||||
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