eXp reports a 12% increase in revenue despite rocky real estate market
CEO Glenn Sanford says he’s pleased by the company’s performance this quarter, but believes the industry will continue to struggle amid high interest rates.
- The company is looking for additional revenue opportunities such as escrow and title services.
- While the number of eXp agents grew, Sanford expects many low-producing agents to leave the industry.
- The company is focusing on high-producing agents and offering coaching and certification.
EXp World Holdings, Inc. (EXPI) on Thursday reported a third-quarter gross profit of $93.1 million, up 17% from the same period last year.
The holding company for cloud-based brokerage eXp Realty, Virbela (an immersive 3D platform) and media company SUCCESS Enterprises said revenue increased 12% to $1.2 billion year over year.
Net income was $4.4 million, down from $23.8 million in the third quarter of 2021. Glenn Sanford, founder, chairman and CEO of eXp World Holdings, cited higher investments and lower tax benefits as reasons for the lower net income.
"We obviously had a great quarter, considering what's going on in the economy," Sanford said. But the real estate industry will continue to struggle, he said, presenting growing challenges.
To maintain a healthy balance sheet, Sanford said eXp has cut costs and done some restructuring.
Jeff Whiteside, CFO and chief collaboration officer of eXp World Holdings, said eXp is also "looking for other revenue opportunities," such as escrow and title services, across the country. The company already offers mortgage services.
The company repurchased $59.8 million in common stock during the third quarter. As of Sept. 30, 2022, cash and cash equivalents totaled $134.5 million, compared to $98.1 million at the same time in the third quarter of 2021.
While eXp's worldwide agent count grew from 65,269 in the third quarter of 2021 to nearly 85,000 in the third quarter this year, Sanford said he expected low-producing agents to drop out as high interest rates continue to lock many potential property buyers out of the market.
"We're in a market that's dramatically slowing," said Whiteside. To retain agents and help them improve sales, eXp has begun offering coaching and certification programs. Sanford said eXp will focus on "high-quality, productive agents."
"Those who can figure out how to do drum up business are going to do just fine," he said.