Glenn Sanford, Founder, Chairman and CEO, eXp World Holdings CEO and eXp Realty.
Illustration by Lanette Behiry/Real Estate News

eXp looks to international growth as profits fall 

CEO Glenn Sanford acknowledged the challenging market, but said eXp has increased market share and added agents even as revenue remains flat.

November 3, 2023
4 minutes

eXp saw mixed results in the third quarter, focusing on the positive news during its earnings call: International growth was strong, and various incentive programs aimed at attracting existing teams and brokerages seem to be working, as the company reported increases in both transactions and agent count.

But revenue was flat, and net income fell significantly. CEO Glenn Sanford highlighted eXp's resilience during a down market, particularly as existing sales continued to drop while mortgage rates continued to climb throughout the quarter. 

"It's no secret that we continue to operate in a challenging market," Sanford explained on the call. "While industry transactions have decreased year-over-year and in the third quarter, we've maintained a market share of 4.2% in the U.S., which really means we've increased our market share by around 8.7% on a transaction basis."

While eXp was not a defendant in the landmark Sitzer/Burnett case, the company — along with a slew of other brokerages — has been named in the Gibson lawsuit filed this week. The suit mirrors other major commissions class action cases.

Key numbers

Revenue: $1.2 billion, representing a 2% decrease from the same period last year and unchanged from the previous quarter.

Cash and cash equivalents: $120 million, which is slightly lower than $124.7 million in the second quarter. However, eXp execs noted during the earnings call that the company is running on "zero debt."

Gross profit: $83.6 million, or a 10% decrease from the same period last year and a drop from $96.5 million reported for the second quarter.

Net income: $1.3 million, which is down significantly from $9.4 million in the second quarter and less than a third of the $4.4 million the company posted in the third quarter last year. 

EBITDA (earnings before interest, taxes, depreciation and amortization): $19 million, up from $12.3 million a year ago, but down from $24.7 million in Q2.

Transactions: 139,480, which is up from 137,199 last quarter and a 1% increase from Q3 2022.

Agent count: 89,156 at the end of September, up from 88,248 at the end of Q2 and an increase of 5% year-over-year.

What eXp had to say

Sanford pointed to international growth as a silver lining for the business as the U.S. market continues to reel from low inventory and high borrowing costs.

"Our success in North America enables us to expand in international markets, where we operate in 24 markets today," he said. "We see international as the largest driver of future growth for the company. And this quarter, we grew our [international] revenues by 47% and reached a record $15 million in revenue."

While other major industry leaders, including the CEOs of Zillow and Redfin, have addressed the Sitzer/Burnett verdict head-on, Sanford only touched on the topic during the Q&A portion of the call and kept his responses concise. He did, however, say he believes buyer agency is "very valuable" for consumers.

"I'm concerned, quite frankly, about what this might mean to buyers who may not be able to afford representation, if things change up too much," Sanford said. "So, it's definitely something that's top of mind because I believed in buyer agency for all of my career in the industry."

As far as any impacts on eXp operations or practices as a result of the verdict, Sanford said it's still "too soon to comment" on how the brokerage will navigate the changing residential brokerage landscape.

Notable moves

eXp execs continued to tout the company's incentive programs aimed at luring high-volume, high-value teams and independent brokerages to its platform. 

In addition to the success it had with its "Boost" program and bringing over New England's Bean Group, which it said produces $1.5 billion in volume, eXp also highlighted the addition of EQTY Forbes Global Property Affiliates and Canada's Justin Havre & Associates.

eXp also announced its "Thrive" program, which offers equity incentives for existing teams who move to eXp. It is the company's third incentive program launched this year. 

Additionally, eXp announced the appointment of Bryon Ellington as the company's first Chief Learning Officer this past quarter. Ellington is now responsible for developing eXp's agent training and coaching.

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