Revenue Accelerates to $130.5 Million, 235% Year-over-year Increase
BELLINGHAM, WASH. — Aug. 13, 2018 — eXp World Holdings (NASDAQ: EXPI), the holding company for eXp Realty, the largest residential real estate brokerage by geography in North America, today announced financial results for the second quarter ended June 30, 2018.
“We received a number of industry honors this quarter due to our amazing agents as they continue to deliver top production numbers, including this quarter’s record transaction and volume levels,” said eXp World Holdings CEO, Chairman and Founder Glenn Sanford. “We are proud to be on this journey together, providing superior technology and agent support. This quarter also marked a pivotal day in the history of eXp Realty as we moved to Nasdaq.”
Second Quarter 2018 Financial Summary
- Revenue increased 235% in the second quarter to a record $130.5 million, compared to $39 million in the second quarter of 2017. This represents sequential growth of 111%, compared to $62 million in the first quarter of 2018.
- Gross margin grew 193% in the second quarter of 2018 to $12.4 million, compared to $4.2 million in the second quarter of 2017.
- Net loss was $1.9 million, or $(0.03) per diluted share in the second quarter of 2018, compared to net loss of $2.1 million, or $(0.04) per diluted share, in the second quarter of 2017.
- Adjusted EBITDA (a non-GAAP financial measure) significantly increased to $3.4 million in the second quarter of 2018, compared to a ($155,000) in the second quarter of 2017.
- Cash flow from operations significantly increased to $8.6 million in the second quarter of 2018, compared to $475,065 in the second quarter of 2017.
Second Quarter 2018 Consolidated Operating and Business Highlights
- Residential transaction sides closed in the second quarter of 2018 was 19,903, an increase of 214%, compared to 6,331 during the second quarter of 2017. This represents 110% sequential growth, compared to 9,473 during the first quarter of 2018.
- Residential transaction volume closed in the second quarter of 2018 was $5.3 billion, an increase of 251%, compared to $1.5 billion during the second quarter of 2017. This represents 128% sequential growth, compared to $2.3 billion during the first quarter of 2018.
- Agent count was 11,856 at the end of the second quarter of 2018, an increase of 203%, compared to 3,913 in the second quarter of 2017. This represents 28% sequential growth, compared to 9,290 at the end of the first quarter of 2018. During the early part of the third quarter, the Company made modifications to internal tracking of agent count. This led to a discrepancy in reporting during the month of June. The discrepancy has been identified and remedied and the Company is on track to end the year with an agent count between 16,000 and 20,000. As of July 31, 2018, the number of eXp Realty agents totaled 12,551.
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.
About eXp World Holdings
eXp World Holdings, Inc. (NASDAQ: EXPI) is the holding company for eXp Realty, LLC, the largest residential real estate brokerage by geography in North America. eXp Realty (exprealty.com) is changing the way that agents, brokers and consumers work together in an adaptive, sustainable environment. As the leading, national, cloud-based real estate brokerage, eXp Realty provides 24/7 access to collaborative tools, training and socialization for real estate brokers and agents through its virtual campus environment. It is one of the fastest growing real estate brokerage firms in North America operating in 49 U.S. states, the District of Columbia and three Canadian provinces. 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 website at www.eXpRealty.com.
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.
Reported Consolidated Results
| EXP WORLD HOLDINGS, INC. | |||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
| (UNAUDITED) | |||||||||
| June 30, 2018 | December 31, 2017 | ||||||||
| ASSETS | |||||||||
| CURRENT ASSETS | |||||||||
| Cash and cash equivalents | $ | 15,567,430 | $ | 4,672,034 | |||||
| Restricted cash | 2,894,294 | 923,193 | |||||||
| Accounts receivable, net of allowance $189,240 and $179,759, respectively | 22,974,140 | 6,912,657 | |||||||
| Prepaids and other assets | 679,465 | 591,034 | |||||||
| TOTAL CURRENT ASSETS | 42,115,329 | 13,098,918 | |||||||
| OTHER ASSETS | |||||||||
| Fixed assets, net | 1,978,362 | 1,538,213 | |||||||
| TOTAL OTHER ASSETS | 1,978,362 | 1,538,213 | |||||||
| TOTAL ASSETS | $ | 44,093,691 | $ | 14,637,131 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||
| CURRENT LIABILITIES | |||||||||
| Accounts payable | $ | 1,022,514 | $ | 635,087 | |||||
| Customer deposits | 2,894,294 | 923,193 | |||||||
| Accrued expenses | 25,217,704 | 8,818,180 | |||||||
| TOTAL CURRENT LIABILITIES | 29,134,512 | 10,376,460 | |||||||
| STOCKHOLDERS’ EQUITY | |||||||||
| Common Stock, $0.00001 par value 220,000,000 shares authorized; | |||||||||
| 57,475,022 and 54,962,535 shares issued and outstanding at | |||||||||
| June 30, 2018 and December 31, 2017, respectively | 575 | 550 | |||||||
| Additional paid-in capital | 60,121,007 | 36,848,041 | |||||||
| Accumulated deficit | (45,179,377 | ) | (32,596,374 | ) | |||||
| Accumulated other comprehensive income (loss) | 16,974 | 8,454 | |||||||
| TOTAL STOCKHOLDERS’ EQUITY | 14,959,179 | 4,260,671 | |||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 44,093,691 | $ | 14,637,131 | |||||
| EXP WORLD HOLDINGS, INC. | ||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||
| (UNAUDITED) | ||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||||
| Revenues | $ | 130,542,808 | $ | 38,980,941 | $ | 192,505,339 | $ | 60,509,124 | ||||||||||
| Operating expenses | ||||||||||||||||||
| Cost of revenues | 118,119,212 | 34,740,874 | 173,820,728 | 53,701,009 | ||||||||||||||
| General and administrative | 12,988,835 | 5,692,647 | 28,677,583 | 10,468,528 | ||||||||||||||
| Professional fees | 596,781 | 318,383 | 1,189,146 | 682,843 | ||||||||||||||
| Sales and marketing | 710,368 | 348,823 | 1,356,165 | 650,045 | ||||||||||||||
| Total expenses | 132,415,196 | 41,100,727 | 205,043,622 | 65,502,425 | ||||||||||||||
| Net loss from operations | (1,872,388 | ) | (2,119,786 | ) | (12,538,283 | ) | (4,993,301 | ) | ||||||||||
| Other income and (expenses) | ||||||||||||||||||
| Interest expense | – | (3,762 | ) | – | (5,477 | ) | ||||||||||||
| Total other income and (expenses) | – | (3,762 | ) | – | (5,477 | ) | ||||||||||||
| Loss before income tax expense | (1,872,388 | ) | (2,123,548 | ) | (12,538,283 | ) | (4,998,778 | ) | ||||||||||
| Income tax expense | (14,270 | ) | (23,747 | ) | (44,720 | ) | (48,338 | ) | ||||||||||
| Net loss | $ | (1,886,658 | ) | $ | (2,147,295 | ) | $ | (12,583,003 | ) | $ | (5,047,116 | ) | ||||||
| Net loss per share attributable to common shareholders | ||||||||||||||||||
| Basic from continuing operations | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.22 | ) | $ | (0.10 | ) | ||||||
| Diluted from continuing operations | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.22 | ) | $ | (0.10 | ) | ||||||
| Weighted average shares outstanding | ||||||||||||||||||
| Basic | 56,877,099 | 52,749,086 | 56,427,515 | 52,583,658 | ||||||||||||||
| Diluted | 56,877,099 | 52,749,086 | 56,427,515 | 52,583,658 | ||||||||||||||
| US-GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA RECONCILIATION |
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| Quarter to Date |
|||||||||||||||||||
| Adjusted EBITDA Reconciliation, QTD | Mar-17 | Jun-17 | Sep-17 | Dec-17 | Mar-18 | Jun-18 | |||||||||||||
| Net Income / (Loss) | $ | (2,899,821 | ) | $ | (2,147,296 | ) | $ | (5,314,737 | ) | $ | (11,769,111 | ) | $ | (10,696,345 | ) | $ | (1,886,658 | ) | |
| Interest | 1,715 | 3,762 | 58 | (3,458 | ) | – | – | ||||||||||||
| Taxes | 24,591 | 23,747 | 3,277 | 45,619 | 30,450 | 14,270 | |||||||||||||
| Depreciation & Amortization | 13,265 | 81,437 | 112,487 | 146,040 | 183,321 | 147,558 | |||||||||||||
| Stock Compensation | 646,232 | 757,145 | 2,357,877 | 7,200,377 | 8,279,109 | 3,989,602 | |||||||||||||
| Stock Option (benefit) | 1,467,735 | 1,126,195 | 1,971,394 | 2,290,705 | 1,301,702 | 1,181,969 | |||||||||||||
| Agent equity program | |||||||||||||||||||
| Adjusted EBITDA | (746,283 | ) | (155,010 | ) | (869,644 | ) | (2,089,829 | ) | (901,763 | ) | 3,446,741 | ||||||||
In prior quarters, when disclosing adjusted EBITDA, the Company included non-cash expenses related to its Agent Equity Program (AEP), a program whereby the Company grants awards of the Company’s common stock to agents for meeting certain achievements. Including the expense related to the AEP was incorrect and, as such, it has been excluded from the US-GAAP Net Income (Loss) To Adjusted EBITDA Reconciliation table above, resulting in a reduction to adjusted EBITDA as reported in the first quarter of 2018.
Connect with eXp Realty and eXp World Holdings:
- Facebook – Canada, United States, investor relations
- Twitter – United States, investor relations
- LinkedIn – Canada and United States
Media Relations Contact:
Cynthia Nowak
Vice president of marketing and communications, eXp Realty
360.419.5285 ext. 116
[email protected]
Investor Relations Contact:
Greg Falesnik
Managing director, MZ Group – MZ North America
949.385.6449
[email protected]
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