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Douglas Elliman Inc. reported revenue of $266.3 million and a net loss of $27.2 million during a third-quarter earnings call with investors on Thursday to cap off a quarter in which the brokerage enacted sweeping leadership changes amidst increased pressure from its board.
Revenue during the third quarter of 2024 was $266.3 million, up from $251.5 million the previous year. Revenue during Q2 2024 was $285.8 million.
The company saw a net loss of $27.2 million or $0.33 per diluted common share, up from $4.9 million during Q3 2023. During the second quarter of 2024, its net loss was just $1.7 million. Douglas Elliman attributed this in part to a $20.2 million no-cash charge for changes in fair value of derivatives embedded within convertible debt, which was related to a $50 million growth investment that Kennedy Lewis made into the firm in July, and which accounting standards required the company to convert into debt.
“I’m honored to have been named chairman and CEO of Douglas Elliman” Michael Liebowitz, the company’s chairman and chief executive officer, said during an investor call Thursday morning, adding that he was excited for “a new era.”
“We’re expanding our company culture of connectivity and entrepreneurialism and executing a clear plan to grow and diversify the business to deliver long-term value to all stakeholders,” Liebowitz added in a statement. “As part of this, we’ve created a strategic M&A and business development unit to explore complementary acquisitions in ancillary businesses — such as title, escrow, staging, insurance brokerage and property management — while remaining opportunistic in our core brokerage business. In fact, we’re already in discussions to expand our property management business into Florida. We’re also analyzing all investments to ensure they hit our ROI targets. By doing this, we will build Douglas Elliman into a profitable growth engine for the benefit of our stockholders, agents, staff and clients.”
Liebowitz’s statement about diversification and looking for additional revenue streams addressed anxiety that some investors had experienced in recent years, as the company saw a string of losses.
“Our brand, in my view, is one of the most recognizable in luxury real estate,” he added.
Bryant Kirkland, the company’s chief financial officer, said in a statement that the company had “delivered strong revenue growth this quarter and year-to-date.”
“We continue to lead the industry in reported average sales price per transaction, reflecting the strength of our luxury markets, our best-in-class agents, and the gradual stabilization of home purchasing activity,” Kirkland continued. “With fresh perspectives, a strong balance sheet and an entrepreneurial spirit, we are positioning Douglas Elliman for long-term success as the real estate market recovers.”
During the three months ending Sept. 30, 2024, Douglas Elliman Realty closed gross transaction value of approximately $9.8 billion, up from $9.3 billion the previous year.
The company’s cash and cash equivalents were $151.4 million as of Sept. 30, 2024.
“The best days at Douglas Elliman are truly ahead of us,” Liebowitz added.
During the company’s earnings call, Liebowitz noted that with Donald Trump about to take a second term in the White House come January, that they expect an improvement in the market next year, and likely lower interest rates.
“You’ve got a real estate guy in the White House … which spurs activity,” Liebowitz said.
He also added that while the company has hopes to drive agent growth in the coming year, they plant to “be smart and disciplined” about recruitment, and not simply bolster agent headcount for the sake of having higher numbers.
“When we look at the agents that we have, they’re some of the top agents,” Liebowitz noted.
Less than two weeks before the earnings call, Douglas Elliman had terminated former brokerage President and CEO Scott Durkin, according to a filing with the Securities and Exchange Commission (SEC). The news of Durkin’s firing came just days after former Elliman chairman of the board, CEO and president Howard Lorber suddenly announced his retirement.
Richard Ferrari, who had headed brokerage operations in New York City and the Northeast stepped into Durkin’s old position, and Douglas Elliman’s board director, Michael Liebowitz, took up Lorber’s role.
Although Lorber’s departure had been characterized by Elliman as a retirement, The Wall Street Journal reported that Lorber had in fact been pressured by the company’s board to resign as concerns about workplace culture mounted. In recent months, some vocal Elliman shareholders had expressed their discontent with Lorber’s performance, as the firm faced about two years of financial losses and a dropping stock price, as well as increased scrutiny over previously long-time agents Tal and Oren Alexander, who over the summer had been named in multiple lawsuits alleging sexual assault.
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