eXp World Holdings, Inc. Reports Record Second Quarter 2017 Financial Results

Q2 2017 Revenues Increase 198% to Record $39.6 Million; Drives Net Income of $3.2 Million or $0.05 per Diluted Share

BELLINGHAM, WA – August 14, 2017 – eXp World Holdings, Inc. (OTCQB: EXPI), the holding company for eXp Realty, LLC, The Agent-Owned Cloud Brokerage®, has provided a corporate update and its financial results for the second quarter ended June 30, 2017.

Second Quarter 2017 Company Highlights:

Management Commentary

“Our rapid growth has continued unabated as we move through 2017, evidenced by our 198% revenue growth to a record $39.6 million in the second quarter, as well as our recently achieved 4,300-plus agent milestone,” said Glenn Sanford, founder, chairman and CEO of eXp World Holdings, Inc. “We expect the pace of growth to continue in the second half of 2017, as we leverage the viral growth aspect of the eXp Realty model and growing our brand throughout North America. We believe our investments into core infrastructure and software development should also offer greater economies of scale and a notably increased capacity to onboard new agents to the eXp Realty platform moving forward.

“We also remain committed to keeping eXp Realty the most agent-centric real estate brokerage available. The creation of the Agent Advisory Council, as well as the recent naming of Suzy Truax, an eXp Realty real estate agent, to the Board of Directors, underscores our promise to ensure the agent’s ‘voice’ is heard as we grow our organization.

“We believe that eXp World Holdings can create significant value for its shareholders, which will be accelerated by potentially introducing an affiliated services program. This offering could include services such as mortgage origination, homeowners insurance, and title and escrow services; however, we will continue to focus on our core infrastructure investments in further scaling the business for the foreseeable future. I am extremely proud of our team for their hard work, dedication and continued focus on maintaining the agent-centric culture that has made eXp Realty a great place to do business.”

Second Quarter 2017 Financial Results

Revenues increased 198% to a record $39.6 million in the second quarter of 2017, compared to $13.3 million in the second quarter of 2016. Sequentially, revenues increased 80% when compared to revenue of $22.0 million in the first quarter of 2017. This growth is a direct result of the increased agent count and corresponding higher revenues realized by the company’s real estate brokerage division, eXp Realty.

In the second quarter of 2017, eXp Realty added 800 agents and brokers to its platform, an increase of 169% when compared to 297 agents and brokers added in the second quarter of 2016. This represents a sequential increase of 11.5% when compared to 717 agents added in the first quarter of 2017. eXp Realty ended the second quarter of 2017 with 3,913 real estate professionals on its platform across 45 states, the District of Columbia, and Alberta and Ontario, Canada. As of August 13, 2017, eXp Realty had 4,326 agents on its platform.

During the second quarter of 2017, net income from operations was $3.3 million, compared to a net loss from operations of $6.0 million in the second quarter of 2016. This improvement was primarily due to the change of intrinsic value options, which resulted in a $5.5 million non-cash benefit recognized in the second quarter of 2017.

Net income in the second quarter of 2017 was $3.2 million, or $0.05 per diluted share, compared to a net loss of $6.0 million, or $(0.12) per diluted share, in the second quarter of 2016. This improvement was primarily attributed to the aforementioned increase in revenue, as well as a $0.6 million decrease in non-cash expenses.

Adjusted EBITDA (a non-GAAP financial measure) in the second quarter of 2017 increased 166% to $1.6 million, compared to $0.6 million in the second quarter of 2016.

Cash and cash equivalents as of June 30, 2017 were $1.6 million, compared to $1.8 million as of March 31, 2017.

About eXp World Holdings, Inc.
eXp World Holdings, Inc. (OTCQB: EXPI) is the holding company for eXp Realty, LLC, the Agent-Owned Cloud Brokerage®. As a full-service real estate brokerage, eXp Realty provides 24/7 access to collaborative tools, training, and socialization for real estate brokers and agents through its 3-D, fully-immersive, cloud office environment. eXp Realty, LLC and eXp Realty of Canada, Inc. also feature an attractive revenue sharing program that pays agents a percentage of gross commission income earned by fellow real estate professionals who they attract into the company.

As a publicly traded company, eXp World Holdings, Inc. uniquely offers real estate professionals within its ranks opportunities to earn company stock for production and contributions to overall company growth.

For more information, please visit the company’s Twitter, LinkedIn, Facebook, YouTube, or visit www.eXpRealty.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, a non-GAAP financial measure. We view Adjusted EBITDA as an operating performance measure and, as such, we believe that the GAAP financial measure most directly comparable to it is net income (loss). We define Adjusted EBITDA as net income excluding interest, income taxes, depreciation, amortization, and stock based compensation. We believe that Adjusted EBITDA provides us an important measure of operating performance and enhances comparability while providing investors with useful insight into the underlying trends of the business. Our use of Adjusted EBITDA has limitations as an analytical tool, and this measure should not be considered in isolation or as a substitute for an analysis of our results as reported under GAAP, as the excluded items may have significant effects on our operating results and financial condition. Additionally, our measure of Adjusted EBITDA may differ from other companies’ measure of Adjusted EBITDA. When evaluating our performance, Adjusted EBITDA should be considered with other financial performance measures, including various cash flow metrics, net income and other GAAP results. In the future, we may disclose different non-GAAP financial measures in order to help our investors and others more meaningfully evaluate and compare our future results of operations to our previously reported results of operations.

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 company’s expansion, revenue growth, operating results, financial performance and net income changes. 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 Annual Report on Form 10-K.

Investor Relations Contact:

Greg Falesnik

Managing Director

MZ Group – MZ North America

949-385-6449

[email protected]

www.mzgroup.us

 

EXP WORLD HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

June 30,

December 31,

2017

2016
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,564,220 $ 1,684,608
Restricted cash 1,116,117 481,704
Accounts receivable, net of allowance $170,811 and $133,845, respectively 8,442,372 3,015,767
Prepaids and other assets 434,342 383,563
TOTAL CURRENT ASSETS

11,557,051

5,565,642
OTHER ASSETS
Fixed assets, net 1,088,748 538,405
TOTAL OTHER ASSETS

1,088,748

538,405
TOTAL ASSETS $ 12,645,799 $ 6,104,047
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable $ 472,162 $ 317,420
Customer deposits 1,116,117 481,704
Accrued expenses 7,165,071 2,742,119
Notes payable 9,116 35,778
TOTAL CURRENT LIABILITIES 8,762,466 3,577,021
Commitments and contingencies – –
STOCKHOLDERS’ EQUITY
Common Stock, $0.00001 par value 220,000,000 shares authorized;
53,139,694 shares and 52,316,679 shares issued and outstanding at
June 30, 2017 and December 31, 2016, respectively 527 523
Additional paid-in capital 32,716,439 34,526,859
Accumulated deficit (28,840,651) (32,004,561)
Accumulated other comprehensive income (loss) 7,018 4,205
TOTAL STOCKHOLDERS’ EQUITY 3,883,333 2,527,026
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 12,645,799 $ 6,104,047
– –

The accompanying notes are an integral part of these condensed consolidated financial statements.

EXP WORLD HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

2017

2016
Net revenues

$ 39,574,311

$ 13,282,028

$ 61,585,548

$ 20,424,840
Operating expenses
Cost of revenues 35,048,967 11,463,125 54,328,593 17,574,112
General and administrative 600,420 7,565,698 2,709,772 8,990,856
Professional fees 318,383 130,018 682,843 273,393
Sales and marketing 348,823 122,285 650,045 199,428
Total expenses 36,316,593 19,281,126 58,371,253 27,037,789
Net income (loss) from operations 3,257,718 (5,999,098) 3,214,295 (6,612,949)
Other income and (expenses)
Other income – 439 – 446
Interest expense (3,762) – (2,047) –
Total other income and (expenses) (3,762) 439 (2,047) 446
Income (loss) from before income tax expense 3,253,956 (5,998,659) 3,212,248 (6,612,503)
Income tax expense (23,747) (13,968) (48,338) (25,571)
Net income (loss) 3,230,209 (6,012,627) 3,163,910 (6,638,074)
Net loss attributable to non-controlling interest in subsidiary – 6,720 – 12,300
Net income (loss) attributable to common shareholders $ 3,230,209 $ (6,005,907) $ 3,163,910 $ (6,625,774)
Net income (loss) per share attributable to common shareholders
Basic from continuing operations

$ 0.06

$ (0.12)

$ 0.06

$ (0.13)
Diluted from continuing operations

$ 0.05

$ (0.12)

$ 0.05

$ (0.13)
Weighted average shares outstanding
Basic 52,749,086 50,940,460 52,583,658 50,779,114
Diluted 59,640,200 50,940,460 59,750,835 50,779,114

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

US-GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA RECONCILIATION

Quarter Ended,
Adjusted EBITDA reconciliation

Jun-16

Jun-17
Net Income / (Loss) $ (6,012,627) $ 3,230,209
Interest – 3,762
Taxes 13,968 23,747
Depreciation & Amortization 12,929 81,437
Stock Compensation 482,984 2,229,767
Stock Option 6,117,510 (3,932,894)
Adjusted EBITDA $ 614,764 $ 1,636,028

 

 

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