AGNT share price drops despite revenue, agent gains in Q3
Though the company’s revenue is up year-over-year, net income swung from a gain this time last year to a $4.3 million loss in Q3, while adjusted EBITDA fell 3%.
In what seems to be a theme developing with real estate companies as they report their Q3 earnings results, after-hours trading on Nov. 5 suggested AGNT investors found reasons for concern in the company's latest quarterly report despite the eXp Realty parent posting revenue gains.
Revenue was in the $1.4 billion range in the third quarter, up 6% compared to a year earlier. But AGNT also posted a net income loss of $4.3 million, a significant swing from the $3.5 million gain it reported this time last year.
AGNT shares dropped nearly 8% soon after Thursday's earnings announcement, settling around $3.61 a share after starting the day at $4.27. Other companies in the industry have similarly experienced share price dips in after-hours trading following their earnings announcements. Compass emerged as an exception, with its share price rising slightly after the company reported its Q3 earnings on Thursday.
What eXp had to say
Market to 'stay difficult for a while': Investors' concerns are reflective of the challenging housing market, which saw many potential homebuyers pushed to the sidelines in September as 30-year mortgage rates rose sharply above 7% in September. Leo Pareja, who stepped into the CEO role at AGNT in October after Founder Glenn Sanford stepped down, addressed those concerns, saying the company is planning accordingly.
"We should expect this market to stay difficult for a while, and we've said this to our agents," Pareja said in a Thursday call with investors. "But we also want to make it clear about how we see it. This is not a market that's broken. It's a market that's resetting to normal after two record booms warped expectations."
Enduring agents are 'survivors of the process': One bright spot for eXp is agent growth, which got a boost through the firm's acquisition of NextHome earlier this year. Pareja noted that 44% of new joiners are part of teams, which he said are statistically more productive than individual agents.
Pareja said he also expects the churn of agents leaving the company to lessen going forward. "I feel like a lot of the inherent churn happened over the last three years and the folks who are here are kind of survivors of the process," Pareja said.
Key numbers
Revenue: $1.4 billion in Q3, up 6% compared to a year ago and virtually unchanged from Q2.
Cash and cash equivalents: $111.4 million at the end of Q3, down slightly from $112.8 million a year earlier.
Net income/loss: A loss of $4.3 million, worse than the $3.5 million gain reported a year earlier.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization): $17.1 million in Q3, a 3% decrease from $17.7 million a year ago.
Transactions: 131,546 in Q3, up 8% year-over-year and down slightly from 132,497 in Q2.
Agent count: 87,457 as of Sept. 30, up 5% compared to a year ago and up slightly from 87,338 at the end of June.
Q4 outlook: AGNT expects to report revenue between $1 billion and $1.2 billion in Q4. The company's full-year revenue forecast — $4.85 billion to $5.05 billion — was mostly unchanged from its Q1 earnings report, though AGNT narrowed its full-year adjusted EBITDA guidance to a range of $40 million to $47 million, down from the $50 million to $60 million range given last quarter.
Notable moves
The Q3 update served as AGNT's first earnings report since Sanford left his CEO role to focus on the company's long-term vision as chairman. Pareja has been with the company since 2022 and has been eXp's CEO since 2024.
In other recent company news, AGNT, eXp and Sanford reached a settlement last month in a sexual assault lawsuit involving former eXp agents. The deal was reached shortly before a trial was scheduled to begin, bringing an end to years of litigation.
On the technology front, eXp announced two new tools — ShowGo and MCP First — aimed at helping agents with showings and workflows at its annual conference last month and, weeks later, said its "Coming Soon" listings would soon land on the lead follow-up platform RealScout.
The brokerage also recently announced a partnership with Newrez LLC. The goal of the forthcoming Revenos Mortgage rollout is to give agents more products and tools to support their clients, eXp said at the time, with the end goal of creating a more seamless experience through all phases of the homebuying transaction.