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Virtual brokerage leader EXp World Holdings’ revenue rose 5 percent year over year to $1.295 billion during the second quarter, according to an earnings release on Wednesday.
The company was profitable for the quarter with its net income rising 3 percent to $11.8 million, despite higher taxes on continuing operations. The second-quarter adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) also experienced a boost, rising 22 percent year over year to $32.8 million.
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EXp Realty seemed to begin turning the tide on agent loss in Q2, with the number of agents and brokers on the brokerage’s platform declining 1 percent year over year to 87,111 — an improvement from Q1, when the agent count slid 2 percent compared to the previous year.
Although 87,111 is far from eXp World Holdings founder, chairman and CEO Glenn Sanford’s bold five-year goal of reaching 500,000 agents by 2026, the brokerage said the drop in agents is due to the company offloading less productive members. Those measures were reflected in eXp’s real estate transactions and sales volume, which grew 1 percent year over year to 120,613 and 7 percent year over year to $51.9 billion, respectively.
Glenn Sanford, eXp World Holdings
“The power of the eXp platform is paying off for our agents and eXp worldwide,” Sanford said in a prepared statement ahead of the company’s earnings fireside chat. “We believe the investments we’ve made to provide our agents with the best tools, technology and training during this downturn are helping them outpace the industry in productivity while increasing our agent NPS score.”
“It’s clear that we have established the winning playbook for agents in the U.S. while our international segment is an untapped opportunity where I have taken a more active role guiding our ongoing growth,” he added. “Moving forward, we will continue to relentlessly pursue our core objective of being the most agent-centric real estate brokerage on the planet.”
Leo Pareja
EXp Realty CEO Leo Pareja said the brokerage’s performance during the quarter reflects its investment in agent initiatives, such as the launch of eXp Elevate Coaching and the decision to instantly release vested shares to heirs upon agent death through the eXtend A Hand program.
“After gathering feedback from agents during my first quarter as eXp Realty CEO, it is clear that our initiatives to support agent productivity are gaining traction,” he said in a written statement. “Agents love the expanded learning and development options, faster payouts and Gen AI-based self-service capabilities we have introduced, and they are eager for what’s to come.”
“I remain committed to seeking new ways to leverage technology to operate more efficiently, which will both fund our investments in agent productivity and drive agent satisfaction as increasingly automated processes enable agents to devote more of their time to serving their clients,” he added.
In the company’s Wednesday evening fireside chat (i.e. earnings call), Sanford and Pareja discussed the brokerage’s performance and highlighted the impressive growth outside of the U.S. and Canada. International revenues grew a startling 69 percent year over year during Q2, as the company focused on recruiting experienced agents for eXp Global.
“There was a strong performance in both sales, volume and productivity,” Sanford said of eXp Global. “Our agent count really didn’t change a whole bunch overall, but that’s because a lot of our agents that were in international in the initial launch into international were nonproductive.”
“We actually changed it to looking at agents who have two years or more experience are the ones that we’re actually bringing over to eXp now,” he added. “And that’s really changed the trajectory internationally.”
Sanford said the focus on expanding eXp’s global footprint means there’s a recruitable agent pool of roughly 20 million agents. That number, he said, has reignited the brokerage’s growth goals. EXp could have 1 million agents worldwide by 2034 — double the goal he set in late 2021.
“We’re really excited about that long-term vision — we’ll just say 10-year vision of where we’re going,” he said. And even more recently, I’ve been working directly with the international team, personally bringing a lot of the startup culture into international and working with various team leaders, country leaders and our existing amazing team that we’ve got growing [internationally].”
Although there are plenty of tailwinds pushing eXp’s sails, Pareja took time to address two primary headwinds. The first, he said, are current market trends, such as sticky mortgage rates, worsening affordability and weak existing-home sales.
The second is the looming Aug. 17 deadline for several landmark procedural changes connected to the National Association of Realtors’ buyer-broker commission lawsuit settlement. These include the removal of offers of compensation to buyer’s agents in Realtor-affiliated multiple listing services and the requirement that buyers’ brokers sign representation agreements with buyers before taking them on a home tour.
EXp has already made a push to be ahead of the curve with the rollout of a new listing agreement that said the company “does not share commissions with a buyer’s broker.” However, the agreement does leave room for homebuyers to request concessions from homesellers, which could be used to compensate a buyer broker.
The brokerage said it’s training its agents on how to discuss the new listing agreement and comply with the new rules. “All of our goals with listing agreements are to interpret the rules that are going to be enforced by the MLS,” Pareja said in a previous Inman article. “Our position as of right now is we’re going to make sure we’re going to reflect that broker-to-broker commission sharing on the MLS is no longer allowed.”
In the call, Pareja said there will be “an adjustment period” after the Aug. 17 deadline and that eXp leadership is prepared to help agents and brokers navigate challenges through continued rallies, virtual calls and educational toolkits.
“We’ve been providing as much education and tools through our regional rallies, virtual meetings and as many places as we can communicate with our agents,” he said. “Our buyer representation toolkit, which includes a buyer-broker representation agreement that the [Consumer Federation of America] recently recognized as much simpler, clearer and pro-consumer than any other agreement that’s been created recently, is something we’ve open-sourced so all agents in the industry have access to what’s being considered the best-in-class documents in order to make this transition as smooth as possible.”
EXp’s stock (NASDAQ: EXPI) rose in after-hours trading, with the price per share reaching $14.49 — 0.9 percent higher than the closing price of $14.36.
The company’s market cap stands at $2.22 billion.
Update: This story was updated on July 31 with additional details from eXp’s earnings call. The story was also corrected on Aug. 2 with the correct revenue for the quarter, which was $1,295 million (i.e. $1.295 billion) instead of $1.295 million. We apologize for the mistake.
