Q2 2022 Revenue Increased 42% Year over Year to $1.4 Billion With Agent Growth of 42%
Company Declares Cash Dividend for Q3 2022 of $0.045 per Share of Common Stock
Repurchases $50 Million of Common Stock During the Second Quarter
BELLINGHAM, Wash., Aug. 03, 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 second quarter ended June 30, 2022.
Second Quarter 2022 Financial Highlights as Compared to the Same Year-Ago Quarter:
- Revenue increased 42% to $1.4 billion.
- Gross profit increased 34% to $107.3 million.
- Net income of $9.4 million, compared to net income of $37.0 million in the year-ago quarter. Year over year tax expense increased $22.3 million due to one-time VA allowance release in 2021 and reduction in excess stock based compensation tax benefit. Earnings per diluted share of $0.06, compared to earnings per diluted share of $0.24 in the year-ago quarter.
- Adjusted EBITDA (a non-GAAP financial measure) of $26.9 million.
- As of June 30, 2022, cash and cash equivalents totaled $134.9 million, compared to $107.4 million as of June 30, 2021. The Company repurchased approximately $50 million of common stock during the second quarter of 2022.
- The Company paid a cash dividend for the second quarter of 2022 of $0.04 per share of common stock on May 31, 2022. On July 29, 2022, the Company’s Board of Directors declared a cash dividend of $0.045 per share of common stock for the third quarter of 2022, a 13% increase, expected to be paid on Aug. 29, 2022 to shareholders of record on Aug. 12, 2022.
Management Commentary
“During the second quarter, eXp continued to increase its market share and revenue to record levels, reinforcing that our model was built for all market conditions and that our agent value proposition resonates around the world,” said Glenn Sanford, Founder, Chairman and CEO of eXp World Holdings. “We are focused on strengthening our platform to provide even better support to our agents through technology, operations, training, coaching and community. In the third quarter, we acquired Zoocasa, providing an exponential boost to Canadian agents that we expect to expand to a broader group of agents and real estate customers. We also further strengthened our management team with world-class hires focused on affiliated services and innovation of our proprietary technologies. We are leveraging our core strengths of agent satisfaction and innovation as we continue to redefine the real estate industry.”
“eXp delivered another record quarter with 42% revenue growth and solid profitability while returning a record $56 million to our shareholders through share repurchases and dividends,” said Jeff Whiteside, CFO and Chief Collaboration Officer of eXp World Holdings. “Looking ahead, we expect our agile model to result in ongoing market share gains as we navigate more challenging market conditions. We expect our focus on affiliated services and technology will further strengthen our agent and customer value proposition. Simultaneously, we will focus on increasing operating efficiencies for our business and our agents’ businesses. We remain confident in our ability to deliver profitable, sustainable growth over the long term.”
Second Quarter 2022 Operational Highlights as Compared to the Same Year-Ago Quarter:
- eXp World Holdings and eXp Realty strengthened the leadership team with Shoeb Ansari, Chief Information Officer; Leo Pareja, President of Affiliated Services
- Patrick O’Neill appointed Chief Operating Officer, eXp Realty beginning Aug. 4, 2022. Patrick brings more than 25 years of experience and a proven track record of building and optimizing high-growth technology businesses. More details to come.
- Agents and brokers on the eXp Realty platform increased 42% to 82,856 as of June 30, 2022.
- Real estate transactions closed increased 30% to 150,032.
- Real estate transaction volume increased 44% to $57.9 billion.
- eXp Realty expanded into New Zealand in the second quarter of 2022.
- eXp Realty ended the second quarter of 2022 with a global Net Promoter Score of 68, a measure of agent satisfaction as part of the Company’s intense focus on improving the agent experience.
Second Quarter 2022 Results – Virtual Fireside Chat
The Company will hold a virtual fireside chat and investor Q&A on Wednesday, Aug. 3, 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
- Shoeb Ansari, Chief Information Officer, eXp World Holdings
- Leo Pareja, President of Affiliated Services, eXp Realty
The discussion will be moderated by Justin Ages, Equity Research Analyst at Berenberg Capital Markets.
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, Aug. 3, 2022
Time: 8 a.m. PT / 11 a.m. ET
Location: EXPI Campus. Join at http://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 83,000 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 and New Zealand 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) | |||||||||
| June 30, 2022 | December 31, 2021 | ||||||||
| (Unaudited) | |||||||||
| ASSETS | |||||||||
| CURRENT ASSETS | |||||||||
| Cash and cash equivalents | $ | 134,898 | $ | 108,237 | |||||
| Restricted cash | 105,883 | 67,673 | |||||||
| Accounts receivable, net of allowance for credit losses of $2,806 and $2,198, respectively | 154,997 | 133,489 | |||||||
| Prepaids and other assets | 7,822 | 9,916 | |||||||
| TOTAL CURRENT ASSETS | 403,600 | 319,315 | |||||||
| Property, plant, and equipment, net | 19,906 | 15,902 | |||||||
| Operating lease right-of-use assets | 2,265 | 2,482 | |||||||
| Other noncurrent assets | 1,943 | 2,827 | |||||||
| Intangible assets, net | 7,071 | 7,528 | |||||||
| Deferred tax assets | 59,719 | 52,827 | |||||||
| Goodwill | 12,945 | 12,945 | |||||||
| TOTAL ASSETS | $ | 507,449 | $ | 413,826 | |||||
| LIABILITIES AND EQUITY | |||||||||
| CURRENT LIABILITIES | |||||||||
| Accounts payable | $ | 5,971 | $ | 7,158 | |||||
| Customer deposits | 93,566 | 67,673 | |||||||
| Accrued expenses | 147,393 | 111,672 | |||||||
| Current portion of lease obligation – operating lease | 213 | 311 | |||||||
| TOTAL CURRENT LIABILITIES | 247,143 | 186,814 | |||||||
| Long-term payable | 2,714 | 2,714 | |||||||
| Long-term lease obligation – operating lease, net of current portion | 720 | 765 | |||||||
| TOTAL LIABILITIES | 250,577 | 190,293 | |||||||
| EQUITY | |||||||||
| Common Stock, $0.00001 par value 900,000,000 shares authorized; 163,286,570 issued and 151,798,879 outstanding in 2022; 155,516,284 issued and 148,764,592 outstanding in 2021 | 2 | 1 | |||||||
| Additional paid-in capital | 509,476 | 401,479 | |||||||
| Treasury stock, at cost: 11,487,691 and 6,751,692 shares held, respectively | (289,829 | ) | (210,009 | ) | |||||
| Accumulated earnings | 37,007 | 30,510 | |||||||
| Accumulated other comprehensive income (loss) | (953 | ) | 188 | ||||||
| Total eXp World Holdings, Inc. stockholders’ equity | 255,703 | 222,169 | |||||||
| Equity attributable to noncontrolling interest | 1,169 | 1,364 | |||||||
| TOTAL EQUITY | 256,872 | 223,533 | |||||||
| TOTAL LIABILITIES AND EQUITY | $ | 507,449 | $ | 413,826 | |||||
| EXP WORLD HOLDINGS, INC. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (In thousands, except share amounts and per share data) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenues | $ | 1,415,060 | $ | 999,887 | $ | 2,425,791 | $ | 1,583,720 | ||||||||
| Operating expenses | ||||||||||||||||
| Commissions and other agent-related costs | 1,307,810 | 919,970 | 2,235,077 | 1,450,317 | ||||||||||||
| General and administrative expenses | 91,391 | 60,721 | 166,713 | 107,021 | ||||||||||||
| Sales and marketing expenses | 4,210 | 2,683 | 7,910 | 4,940 | ||||||||||||
| Total operating expenses | 1,403,411 | 983,374 | 2,409,700 | 1,562,278 | ||||||||||||
| Operating income | 11,649 | 16,513 | 16,091 | 21,442 | ||||||||||||
| Other (income) expense | ||||||||||||||||
| Other (income) expense, net | 62 | 54 | 472 | (80 | ) | |||||||||||
| Equity in losses of unconsolidated affiliates | 567 | 1 | 884 | 7 | ||||||||||||
| Total other (income) expense, net | 629 | 55 | 1,356 | (73 | ) | |||||||||||
| Income before income tax expense | 11,020 | 16,458 | 14,735 | 21,515 | ||||||||||||
| Income tax (benefit) expense | 1,661 | (20,585 | ) | (3,488 | ) | (20,374 | ) | |||||||||
| Net income | 9,359 | 37,043 | 18,223 | 41,889 | ||||||||||||
| Net income attributable to noncontrolling interest | – | 7 | 18 | 7 | ||||||||||||
| Net income attributable to eXp World Holdings, Inc. | $ | 9,359 | $ | 37,050 | $ | 18,241 | $ | 41,896 | ||||||||
| Earnings per share | ||||||||||||||||
| Basic | 0.06 | 0.25 | 0.12 | 0.29 | ||||||||||||
| Diluted | 0.06 | 0.24 | 0.12 | 0.27 | ||||||||||||
| Weighted average shares outstanding | ||||||||||||||||
| Basic | 150,783,418 | 145,584,495 | 150,049,170 | 144,973,139 | ||||||||||||
| Diluted | 155,816,038 | 157,288,672 | 156,579,590 | 158,096,735 | ||||||||||||
| EXP WORLD HOLDINGS, INC. | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
| Six Months Ended June 30, | ||||||||
| 2022 | 2021 | |||||||
| OPERATING ACTIVITIES | ||||||||
| Net income | $ | 18,223 | $ | 41,889 | ||||
| Reconciliation of net income to net cash provided by operating activities: | ||||||||
| Depreciation expense | 3,570 | 2,196 | ||||||
| Amortization expense – intangible assets | 817 | 621 | ||||||
| Loss on dissolution of consolidated affiliates | 361 | – | ||||||
| Allowance for credit losses on receivables/bad debt on receivables | 608 | (208 | ) | |||||
| Equity in loss of unconsolidated affiliates | 884 | 7 | ||||||
| Agent growth incentive stock compensation expense | 17,028 | 11,312 | ||||||
| Stock option compensation | 7,121 | 6,239 | ||||||
| Agent equity stock compensation expense | 86,835 | 59,853 | ||||||
| Deferred income taxes, net | (6,892 | ) | (15,329 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (22,269 | ) | (57,095 | ) | ||||
| Prepaids and other assets | 2,236 | (4,466 | ) | |||||
| Customer deposits | 25,893 | 65,981 | ||||||
| Accounts payable | (1,152 | ) | 2,354 | |||||
| Accrued expenses | 31,961 | 54,231 | ||||||
| Long term payable | – | (160 | ) | |||||
| Other operating activities | 74 | – | ||||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 165,298 | 167,425 | ||||||
| INVESTING ACTIVITIES | ||||||||
| Purchases of property, plant and equipment | (8,077 | ) | (5,609 | ) | ||||
| Acquisition of businesses | – | (1,500 | ) | |||||
| NET CASH (USED IN) INVESTING ACTIVITIES | (8,077 | ) | (7,109 | ) | ||||
| FINANCING ACTIVITIES | ||||||||
| Repurchase of common stock | (79,820 | ) | (88,912 | ) | ||||
| Proceeds from exercise of options | 780 | 1,757 | ||||||
| Transactions with noncontrolling interests | (425 | ) | 19 | |||||
| Dividends declared and paid | (11,744 | ) | – | |||||
| NET CASH USED IN FINANCING ACTIVITIES | (91,209 | ) | (87,136 | ) | ||||
| Effect of changes in exchange rates on cash, cash equivalents and restricted cash | (1,141 | ) | 71 | |||||
| Net change in cash, cash equivalents and restricted cash | 64,871 | 73,251 | ||||||
| Cash, cash equivalents and restricted cash, beginning balance | 175,910 | 127,924 | ||||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ENDING BALANCE | $ | 240,781 | $ | 201,175 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: | ||||||||
| Cash paid for interest | ||||||||
| Cash paid for income taxes | $ | 2,444 | $ | 702 | ||||
| SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Termination of lease liabilities | – | 120 | ||||||
| Property, plant and equipment purchases in accounts payable | 246 | 7 | ||||||
| US-GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA RECONCILIATION | ||||||||||||||||
| (In thousands) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Net income | $ | 9,359 | $ | 37,043 | $ | 18,223 | $ | 41,889 | ||||||||
| Other (income) expense, net | 629 | 55 | 1,356 | (73 | ) | |||||||||||
| Income tax (benefit) expense | 1,661 | (20,585 | ) | (3,488 | ) | (20,374 | ) | |||||||||
| Depreciation and amortization (1) | 2,429 | 1,507 | 4,387 | 2,817 | ||||||||||||
| Stock compensation expense (2) | 9,230 | 5,840 | 17,028 | 11,312 | ||||||||||||
| Stock option expense | 3,606 | 3,128 | 7,121 | 6,239 | ||||||||||||
| Adjusted EBITDA | $ | 26,914 | $ | 26,988 | $ | 44,627 | $ | 41,810 | ||||||||
| (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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