BELLINGHAM, Wash., Aug. 08, 2019 (GLOBE NEWSWIRE) -- eXp World Holdings, Inc. (NASDAQ: EXPI), the holding company for eXp Realty and eXp World Technologies, today reported financial results for the second quarter ended June 30, 2019.
Second-Quarter 2019 Financial and Operational Summary
| Q2 2019 | Q2 2018 | Year-over-Year Change | ||
| Revenue | $266.7 million | $130.5 million | 104% | |
| Gross Profit | $22.1 million | $12.4 million | 78% | |
| Net Loss | $(2.2) million | $(1.9) million | 16% | |
| Adjusted EBITDA | $3.8 million | $3.4 million | 10% | |
| Cash Flow from Operations | $18.1 million | $7.7 million | 134% | |
| Agent Count | 20,162 | 11,856 | 70% | |
| Transaction Sides | 35,837 | 19,903 | 80% | |
| Transaction Volume | $10.3 billion | $5.3 billion | 94% | |
Management Commentary
“The second quarter of 2019 was highlighted by the continued growth and productivity by agents in our cloud-based brokerage,” said Glenn Sanford, CEO, Chairman and Founder of eXp World Holdings. “We grew revenues 104% to a record $267 million in the second quarter, which was driven by a record number of transactions and agents at eXp Realty.
“We consistently strive to ensure eXp is the most agent-centric brokerage, both economically and culturally. As a result of this focus, we hit a major milestone in the second quarter, surpassing 20,000 agents. As agents join eXp Realty and build their business, we’ve noticed a steady increase in productivity, especially for agents who have been with us for over a year, driven by top agents and teams joining the company as well as the development and training programs we offer to all agents. eXp Realty also has continued to expand geographically, announcing openings in New York City and Quebec, and plans to expand into Australia and the United Kingdom during the fourth quarter, which will be the first time we operate outside of North America.
“We’ve also taken charge on several other initiatives to grow revenue and profitability as we move forward, such as expanding VirBELA’s engineering team and beginning to test a software-as-a-service cloud coworking space as well as developing our affiliated services platform that is expected to launch in the third quarter of 2019, including mortgage, title and home warranty. Taken together, we will continue to execute upon our growth strategy while methodically investing back into our platform to ultimately support a much larger, more mature organization. I look forward to executing upon the incredible opportunity in front of eXp today while creating long-term value for our shareholders.”
Recent Highlights
- Continued development toward affiliated services, including mortgage, title and home warranty, which will launch in the third quarter of 2019.
- eXp World Technologies’ virtual reality company, VirBELA, expanded their engineering team and began testing a software as a service cloud coworking space.
- Announced the company’s first expansion outside of North America in the United Kingdom and Australia, which will launch in the fourth quarter of 2019.
- eXp Realty opened in Saskatchewan and Quebec, and plans to expand into Newfoundland and Nova Scotia in summer 2019. With these additions, eXp Realty will operate in seven Canadian provinces.
- eXp World Holdings CEO and Founder Glenn Sanford was named a Top CEO in Glassdoor’s Employees’ Choice Awards for 2019 and received the T3 Sixty 2019 Visionary Award.
- Dave Conord and Stacey Onnen took on the expanded leadership roles of eXp Realty Co-presidents.
- Mitch Robinson was named Chief Marketing Officer of eXp World Holdings, where he will continue to lead and advise eXp Realty marketing and communications, while also focusing on other initiatives of eXp World Holdings.
- eXp Realty’s agent Net Promoter Score, which measures agent satisfaction, remains strong at 64 in the second quarter.
- eXp World Holdings’ common stock was added to the Russell 2000, a capitalization-weighted index that measures the performance of the bottom two-thirds of the Russell 3000 Index, which is made up of 3,000 of the largest, publicly traded U.S. stocks.
About eXp World Holdings
eXp World Holdings, Inc. (NASDAQ: EXPI) owns eXp Realty and eXp World Technologies, LLC, which operates VirBELA.
eXp Realty, The Real Estate Cloud Brokerage™, is the largest residential real estate brokerage by geography in North America. It is one of the fastest growing real estate brokerage firms in North America with more than 21,000 agents, as of July 31, 2019, across 50 U.S. states, the District of Columbia and five Canadian provinces. The company recently announced expansion into the United Kingdom and Australia. As a subsidiary of a publicly traded company, eXp Realty uniquely offers real estate professionals within its ranks opportunities to earn eXp World Holdings stock for production and contributions to overall company growth.
VirBELA offers a modern, cloud-based environment focused on education and team development with clients in various industries from government to retail. VirBELA developed eXp Realty’s current cloud campus, which provides 24/7 access to collaborative tools, training and socialization for the company’s agents and staff.
For more information, please visit the company’s website at www.expworldholdings.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, which is a non-U.S. GAAP financial measure and may be different than similarly titled measures used by other companies. It is presented to enhance investors’ overall understanding of the company’s financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP.
The company’s Adjusted EBITDA provides useful information about financial performance, enhances the overall understanding of past performance and future prospects, and allows for greater transparency with respect to a key metric used by management for financial and operational decision-making. Adjusted EBITDA helps identify underlying trends in the business that otherwise could be masked by the effect of the expenses that are excluded in Adjusted EBITDA. In particular, the company believes the exclusion of stock and stock option expenses, provides a useful supplemental measure in evaluating the performance of operations and provides better transparency into results of operations.
The company defines the non-U.S. GAAP financial measure of Adjusted EBITDA to mean net income (loss), excluding other income (expense), income tax expense, depreciation and amortization; stock-based compensation expense, and stock option expense. Adjusted EBITDA may assist investors in seeing financial performance through the eyes of management, and may provide an additional tool for investors to use in comparing core financial performance over multiple periods with other companies in the industry.
Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP. There are a number of limitations related to the use of Adjusted EBITDA compared to Net Income (Loss), the closest comparable U.S. GAAP measure. Some of these limitations are that:
- Adjusted EBITDA excludes stock-based compensation expense not related to the agent equity program (and related payroll tax expense) and stock option expense, which have been, and will continue to be for the foreseeable future, significant recurring expenses in the business and an important part of the compensation strategy; and
- Adjusted EBITDA excludes certain recurring, non-cash charges such as depreciation of fixed assets and amortization of acquired intangible assets and, although these are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future.
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, 2019 | December 31, 2018 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 31,523,012 | $ | 20,538,057 | ||||
| Restricted cash | 6,165,740 | 2,502,591 | ||||||
| Accounts receivable, net of allowance $484,843 and $484,441, respectively | 50,788,908 | 17,428,091 | ||||||
| Prepaids and other assets | 1,914,258 | 1,857,988 | ||||||
| TOTAL CURRENT ASSETS | 90,391,918 | 42,326,727 | ||||||
| Fixed Assets, net | 3,801,834 | 2,739,525 | ||||||
| Operating lease right-of-use assets | 285,435 | - | ||||||
| Intangible assets, net | 2,698,132 | 2,531,669 | ||||||
| Goodwill | 8,248,107 | 8,248,107 | ||||||
| TOTAL ASSETS | $ | 105,425,426 | $ | 55,846,028 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | 1,713,213 | $ | 1,758,377 | ||||
| Customer deposits | 6,165,740 | 2,502,591 | ||||||
| Accrued expenses | 53,873,562 | 18,976,435 | ||||||
| Current portion of long-term payable | 974,659 | 974,659 | ||||||
| Current portion of lease obligation - operating lease | 44,516 | - | ||||||
| TOTAL CURRENT LIABILITIES | 62,771,690 | 24,212,062 | ||||||
| Long-term payable, net of current portion | 1,754,065 | 1,654,337 | ||||||
| Long-term lease obligation - operating lease | 241,045 | - | ||||||
| TOTAL LIABILITIES | 64,766,800 | 25,866,399 | ||||||
| STOCKHOLDERS' EQUITY | ||||||||
| Common Stock, $0.00001 par value 220,000,000 shares authorized; | ||||||||
| 63,120,641 issued and 62,302,796 outstanding at June 30, 2019, | ||||||||
| 60,609,102 issued and 60,609,102 outstanding at December 31, 2018 | 631 | 606 | ||||||
| Additional paid-in capital | 118,408,532 | 90,755,616 | ||||||
| Treasury stock, at cost: 817,845 shares held at June 30, 2019 | (8,545,052 | ) | - | |||||
| Accumulated deficit | (69,256,830 | ) | (60,765,266 | ) | ||||
| Accumulated other comprehensive income (loss) | 51,345 | (11,327 | ) | |||||
| TOTAL STOCKHOLDERS' EQUITY | 40,658,626 | 29,979,629 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 105,425,426 | $ | 55,846,028 | ||||
| EXP WORLD HOLDINGS, INC. | |||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
| (UNAUDITED) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 30, | June 30, | ||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Revenue | $ | 266,704,945 | $ | 130,542,808 | $ | 423,738,577 | $ | 192,505,339 | |||||||
| Expenses | |||||||||||||||
| Commission and other agent-related costs | 244,586,510 | 118,119,212 | 387,128,915 | 173,820,728 | |||||||||||
| General and administrative | 23,204,363 | 13,585,616 | 42,905,135 | 29,866,729 | |||||||||||
| Sales and marketing | 1,071,101 | 710,368 | 1,959,951 | 1,356,165 | |||||||||||
| Total expenses | 268,861,974 | 132,415,196 | 431,994,001 | 205,043,622 | |||||||||||
| Operating income (loss) | (2,157,029 | ) | (1,872,388 | ) | (8,255,424 | ) | (12,538,283 | ) | |||||||
| Other income (expenses) | |||||||||||||||
| Other income (expense) | (37,212 | ) | - | (118,188 | ) | - | |||||||||
| Interest income | 46,955 | - | 93,200 | - | |||||||||||
| Total other income (expense), net | 9,743 | - | (24,988 | ) | - | ||||||||||
| Loss before income tax expense | (2,147,286 | ) | (1,872,388 | ) | (8,280,412 | ) | (12,538,283 | ) | |||||||
| Income tax expense | (48,455 | ) | (14,270 | ) | (211,152 | ) | (44,720 | ) | |||||||
| Net loss | $ | (2,195,741 | ) | $ | (1,886,658 | ) | $ | (8,491,564 | ) | $ | (12,583,003 | ) | |||
| Net loss per share | |||||||||||||||
| Basic | $ | (0.04 | ) | $ | (0.03 | ) | $ | (0.14 | ) | $ | (0.22 | ) | |||
| Diluted | $ | (0.04 | ) | $ | (0.03 | ) | $ | (0.14 | ) | $ | (0.22 | ) | |||
| Weighted average shares outstanding | |||||||||||||||
| Basic | 61,526,466 | 56,877,099 | 61,137,671 | 56,427,515 | |||||||||||
| Diluted | 61,526,466 | 56,877,099 | 61,137,671 | 56,427,515 | |||||||||||
| US-GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA RECONCILIATION | ||||||||
| For the Three Months Ended | ||||||||
| June 30, 2019 | June 30, 2018 | |||||||
| Net income / (loss) | $ | (2,195,741 | ) | $ | (1,886,658 | ) | ||
| Other (income) / expense | (9,743 | ) | - | |||||
| Taxes | 48,455 | 14,270 | ||||||
| Depreciation & Amortization | 533,853 | 147,558 | ||||||
| Agent growth incentive stock compensation expense | 3,587,465 | 3,989,603 | ||||||
| Stock option expense | 1,830,508 | 1,181,969 | ||||||
| Adjusted EBITDA | $ | 3,794,797 | $ | 3,446,742 | ||||
| - | - | |||||||
| For the Six Months Ended | ||||||||
| June 30, 2019 | June 30, 2018 | |||||||
| Net income / (loss) | $ | (8,491,564 | ) | (12,583,003 | ) | |||
| Other (income) / expense | 24,988 | — | ||||||
| Taxes | 211,152 | 44,720 | ||||||
| Depreciation & Amortization | 974,131 | 330,879 | ||||||
| Agent growth incentive stock compensation expense | 7,256,786 | 12,268,713 | ||||||
| Stock option expense | 3,045,956 | 2,483,671 | ||||||
| Adjusted EBITDA1 | $ | 3,021,449 | 2,544,980 | |||||
| 1 Adjusted EBITDA is not a measurement of our financial performance under U.S. GAAP and should not be considered as an alternative to net income, operating income or any other measures derived in accordance with U.S. GAAP. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, see “Non-U.S. GAAP Financial Measure.” | ||||||||
Media Relations Contact:
Cynthia Nowak
Vice president, marketing and communications, eXp Realty
360.419.5285 ext. 116
cynthia.nowak@exprealty.net
Investor Relations Contact:
Greg Falesnik
Managing director, MZ Group – MZ North America
949.385.6449
greg.falesnik@mzgroup.us