eXp delivers a profitable second quarter — and adds agents
The company reported a net income of $9.4 million, slightly below expectations, while its agent count grew by 7%.
The real estate brokerage eXp announced slightly lower-than-expected numbers for the second quarter, although the data seems to indicate the company is successfully navigating the current real estate slowdown.
The company, which is based in Bellingham, Washington, reported a net income of $9.4 million, with earnings of 6 cents per diluted shares. That's a little off from the consensus forecast of 8 cents per share.
Despite the sluggish market, eXp continues to find ways to add to its agent count. The company reported having more than 88,000 agents, up 7% from a year ago.
Founder and CEO Glenn Sanford attributes some of that growth to new compensation tactics. During this slower housing market, the company has deployed several new agent support systems, including an initiative to pay its agents faster.
During the earnings call, Sanford was optimistic about their churn rate and future company growth. According to data from eXp, 75% of those who left the company had two or fewer annual sales, while only 1.5% of the attrition came from agents with more than 21 sales.
He noted that a few dynamics are contributing to lower-than-expected attrition in spite of a slowdown in transactions, including a robust economy that is allowing agents to have another income while holding onto their real estate licenses. Still, Sanford foresees overall agent counts dropping as the market remains cool.
"I do expect that there's going to be fewer agents in the industry in the next 12 months," Sanford said.
Revenue: $1.2 billion in the second quarter, down 13% year over year.
Cash and cash equivalents: $124.7 million in the second quarter, up slightly from the previous quarter. The company repurchased about $38.8 million in common stock in Q2.
Gross profit: $96.5 million in the second quarter, down 10% from the previous year.
Net income: $9.4 million in the second quarter, up $1.5 million from the first quarter.
EBITDA (earnings before interest, taxes, depreciation and amortization): $24.7 million in the second quarter, up $13.3 million from Q1.
Transactions: Closed transactions for the quarter decreased 9% from a year prior to 137,199.
Agent count: 88,248 at the end of June, up 7% compared to a year ago.
What eXp is saying
"We are optimistic that lower mortgage rates will unleash significant pent-up demand as affordability improves and buyers can once again meet seller price objectives," said Jeff Whiteside, chief financial officer at eXp World Holdings.
During a "State of the Union" presentation in June, Sanford noted that the company has been pursuing partnerships with Homes.com, Realty.com and others. He also highlighted the launch of eXp's proprietary "My link, my lead" tool that allows agents to share listings via personalized links.
In April, the company named Carolyn Merchant chief marketing officer of eXp Realty and Carrie Lysenko CEO of eXP subsidiary, Canadian-based Zoocasa.