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Second-quarter revenue for virtual brokerage leader EXp World Holdings increased 5% year-on-year to $1.295 million, according to an earnings report released on Wednesday.
Despite higher taxes from continuing operations, the company was still profitable in the quarter, with net income rising 3% to $11.8 million. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) also grew in the second quarter, up 22% year-on-year to $32.8 million.
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EXp Realty appears to be starting to turn around agent attrition in the second quarter, with the number of agents and brokers on the brokerage’s platform falling 1% year over year to 87,111, an improvement from the first quarter, when the number of agents was higher than in the first quarter. A quarterly decline of 2% year-on-year.
While 87,000 brokers is still far from eXp World Holdings founder, chairman and CEO Glenn Sanford’s bold five-year goal of 500,000 brokers by 2026, the brokerage said brokers The decline was due to the company laying off less productive members. These measures were reflected in eXp’s real estate transaction volume and sales volume, which increased 1% year over year to 120,613 units and 7% year over year to $51.9 billion.
Glenn Sanford, eXp World Holdings
“The power of the eXp platform is paying dividends for our agents and eXp globally,” Sanford said in a prepared statement ahead of the company’s earnings fireside chat. “We believe the investments we have made to provide our agents with the best tools, technology and training during this economic downturn are helping them outperform the industry in productivity while improving our agents’ NPS scores. “
“It’s clear that we have a winning strategy for our U.S. agents, and our international business is an untapped opportunity in which I take a more active role in guiding our continued growth,” he added. “Going forward, we will continue to relentlessly pursue our core goal of becoming the most agent-centric real estate agency in the world.”
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EXp Realty CEO Leo Pareja said the brokerage’s results for the quarter reflected its investments in agent programs, such as the launch of eXp Elevate Coaching and the decision to immediately release vested shares to heirs upon an agent’s death through the eXtend A Hand program.
“After collecting agent feedback during my first quarter as CEO of eXp Realty, it’s clear that our initiatives to support agent productivity are gaining traction,” he said in a written statement. “Agents love us. Expanded learning and development options, faster payments, and Gen AI-based self-service capabilities are being rolled out, and they’re eager for what’s to come.”
He added: “I remain committed to finding new ways to leverage technology to operate more efficiently, which will both fund our investments in agent productivity and improve agent satisfaction as increasingly automated processes Ability to devote more time to customer service.
During the firm’s fireside chat, or earnings call, Wednesday night, Sanford and Pareja discussed the brokerage’s performance and highlighted impressive growth outside the U.S. and Canada. As the company focused on recruiting experienced agents for eXp Global, second-quarter international revenue grew an astonishing 69% compared to the same period last year.
“Both sales, sales and productivity have been strong,” Sanford said of eXp Global. “Our agent numbers haven’t really changed overall, but that’s because many of our agents initially launched internationally. The agents in the international market are not productive.”
“We actually changed that to looking for agents with two years or more of experience, and we’re actually bringing that into eXp now,” he added. “This really changes the trajectory of international development.”
Sanford said the focus on expanding eXp’s global footprint means the pool of agents available to recruit is about 20 million agents. He said the figure reignited the brokerage’s growth ambitions. By 2034, EXp could have 1 million agents worldwide – double the target he set at the end of 2021.
“We’re very excited about this long-term vision – we’re only going to talk about our vision for the next ten years,” he said. Lately, I’ve been working directly with international teams, personally bringing a lot of startup culture internationally, and working with individual team leaders, country leaders, and the existing amazing teams that we’re growing [internationally]”.
While there were many tailwinds to get eXp off the ground, Pareja took the time to address two major headwinds. First, he said, are current market trends such as sticky mortgage rates, worsening affordability and weak existing home sales.
The second is the upcoming Aug. 17 deadline, which will involve several landmark procedural changes related to the National Association of Realtors Buyer’s Brokers Council lawsuit settlement. These include the elimination of compensation provided to buyer’s agents in multiple listing services affiliated with real estate agents and a requirement that buyer’s agents sign a representation agreement with a buyer before taking them to tour a home.
EXp has launched a new listing agreement that says the company “does not share commissions with buyer’s agents” in an effort to stay ahead of the curve. However, the agreement does provide room for the homebuyer to request concessions from the home seller, which concessions can be used to compensate the buyer’s agent.
The brokerage said it is training its agents on how to discuss the new listing agreement and comply with the new rules. “Our current position is that we will ensure that we will no longer allow brokers to compete with Brokers share commissions on the MLS.”
Pareja said on the call that there will be an “adjustment period” after the Aug. 17 deadline and that eXp leadership is ready to help agents and brokers navigate the challenges through ongoing gatherings, virtual calls and educational toolkits.
“We have been communicating with our agents through regional gatherings, virtual meetings and in as many places as possible to provide as much education and tools as possible,” he said. “Our Buyer Representation Toolkit, which includes a Buyer Broker Representation Agreement, [Consumer Federation of America] Considered simpler, clearer and more consumer-friendly than any other protocol created recently, we are making this transition open source so all agents in the industry have access to what is considered to be best-in-class documentation in order to make this transition as possible as possible smoothly.
Shares of EXp (NASDAQ: EXPI ) were higher in after-hours trading, hitting $14.49 per share, up 0.9% from the closing price of $14.36.
The company has a market capitalization of $2.22 billion.
Update: This article has been updated with additional details from eXp’s earnings call since publication.
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