eXp World Holdings Reports First-Quarter Financial Results
Achieved Positive Net Income for Second Quarter in a Row
Revenue Up 73% Year-over-year to $271 Million
Announces First Virtual Annual Shareholder Event
BELLINGHAM, Wash., May 05, 2020 (GLOBE NEWSWIRE) — eXp World Holdings, Inc. (Nasdaq: EXPI), the holding company for eXp Realty and VirBELA, today announced financial results for the first quarter ended March 31, 2020 and that this year’s eXp shareholder event will be held May 12 in its virtual campus for the first time.
The company reported its second profitable quarter in a row with net income of $0.2 million in the first quarter. In addition, quarterly revenue grew 73 percent versus the prior year driven by continued rapid agent growth and increased transactions. eXp Realty continues to attract agents at the highest rate in the industry because the cloud-based remote model is very appealing to agents and independent brokerages, especially during this challenging time.
“Our performance in the first quarter was outstanding,” said eXp World Holdings CEO, Chairman and Founder Glenn Sanford. “We recorded GAAP positive net income in the first quarter of 2020, achieving back-to-back quarters with positive GAAP earnings for the first time. This milestone represents continued progress around the benefits of scale, operating as a fully remote organization, while at the same time investing in the underlying VirBELA platform to create similar benefits for other companies who are now trying to figure out how to operate in the current and post global pandemic world.
“As we move deeper into 2020, it will no doubt be a volatile year for many industries. The backdrop of the global health crisis will change how people will work together and even how they socialize. It has the potential of changing how consumers approach the home-buying and -selling process. And beyond real estate, there will be a number of enterprises that adopt a virtual workplace in the way the global eXp family already works together, which we are excited about.”
First-Quarter 2020 Financial Results Summary
- Revenue increased 73% in the first quarter of 2020 to $271 million, compared to $157 million in the first quarter of 2019.
- Gross profit grew 93% to $28.0 million in the first quarter of 2020, compared to $14.5 million in the first quarter of 2019. Gross profit is calculated as revenues less commission and other agent-related costs.
- Net income was $0.2 million in the first quarter of 2020, compared to a net loss of $6.3 million in the first quarter of 2019.
- Adjusted EBITDA (a non-GAAP financial measure) was $5.7 million in the first quarter of 2020, compared to ($0.7) million in the first quarter of 2019.
- Cash flow from operations increased approximately 163% to $17.5 million in the first quarter of 2020, compared to $6.7 million in the first quarter of 2019.
“As we navigate and eventually emerge from this crisis, eXp is uniquely positioned to adapt,” said eXp World Holdings CFO and Chief Collaboration Officer Jeff Whiteside. “In VirBELA, we have one of the few platforms that supports people and teams working together seamlessly without ever needing to leave their homes. VirBELA has experienced a dramatic increase in use and adoption due to its effectiveness in supporting remote work and virtual events during this time of social distancing. We anticipate accelerated growth opportunities as companies embrace the new normal for how business is conducted as the need and desire for physical distancing takes center stage.
“For eXp Realty, the company anticipates revenue growth and home transaction sides to slow compared to the prior year as the impacts from COVID-19 continue to affect the economy and housing market. However, we anticipate that eXp Realty will continue to add agents at levels above competing national brokerages.”
First-Quarter 2020 Operating and Business Highlights
- The number of agents and brokers on the eXp Realty platform increased 59% to 28,449 at the end of the first quarter of 2020, compared to 17,929 a year ago.
- Residential transaction sides closed in the first quarter of 2020 were 37,882, an increase of 70%, compared to 22,307 during the first quarter of 2019.
- Residential transaction volume closed in the first quarter of 2020 was $11.0 billion, an increase of 90%, compared to $5.8 billion during the first quarter of 2019.
- By focusing on the agent experience, eXp Realty earned a 70 agent Net Promoter Score, which measures agent satisfaction, in the first quarter.
- VirBELA’s net additional customers were the highest reached in its history.
eXp Shareholder Event
The eXp shareholder event is for current and potential shareholders. Attendees will receive an update on eXp World Holdings and its companies, and hear from company leadership and members of the board of directors as well as eXp Realty agents, brokers and partners.
- Date: Tuesday, May 12, 2020
- Time: 8 a.m. PT / 11 a.m. ET – 1:15 p.m. PT / 4:15 p.m. ET.
- Watch live: http://devexpworld.wpengine.com/expshareholdersummit2020/
- Replay: devexpworld.wpengine.com/events
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 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.
About eXp World Holdings
eXp World Holdings, Inc. (Nasdaq: EXPI) houses eXp Realty and VirBELA.
eXp Realty, The Real Estate Cloud Brokerage, is the fastest-growing, global residential real estate company with more than 28,000 agents in the United States, Canada, 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 is an immersive technology platform for business, events and education. Its modern, cloud-based environment provides a virtual experience for workers, attendees, students and more to communicate, collaborate, meet and socialize. For more information, visit the company’s website at virbela.com.
For more information, please visit the company’s website at www.devexpworld.wpengine.com.
Connect with eXp World Holdings and its companies: http://devexpworld.wpengine.com/social
Reported Consolidated Results
| EXP WORLD HOLDINGS, INC. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (In thousands) | ||||||||
| March 31, 2020 | December 31, 2019 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 44,279 | 40,087 | |||||
| Restricted cash | 9,829 | 6,987 | ||||||
| Accounts receivable | 34,773 | 28,333 | ||||||
| Less: Allowance for credit losses | (193 | ) | (137 | ) | ||||
| Accounts receivable, net | 34,580 | 28,196 | ||||||
| Prepaids and other assets | 3,997 | 3,549 | ||||||
| TOTAL CURRENT ASSETS | 92,685 | 78,819 | ||||||
| Property, plant, and equipment, net | 5,885 | 5,428 | ||||||
| Operating lease right-of-use assets | 1,118 | 1,264 | ||||||
| Other noncurrent assets | – | 16 | ||||||
| Intangible assets, net | 2,729 | 2,677 | ||||||
| Goodwill | 8,248 | 8,248 | ||||||
| TOTAL ASSETS | $ | 110,665 | $ | 96,452 | ||||
| LIABILITIES AND EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | 3,886 | $ | 2,593 | ||||
| Customer deposits | 9,829 | 6,987 | ||||||
| Accrued expenses | 37,322 | 31,034 | ||||||
| Current portion of long-term payable | 950 | 916 | ||||||
| Current portion of lease obligation – operating lease | 424 | 435 | ||||||
| TOTAL CURRENT LIABILITIES | 52,411 | 41,965 | ||||||
| Long-term payable, net of current portion | 1,560 | 1,530 | ||||||
| Long-term lease obligation – operating lease | 694 | 829 | ||||||
| TOTAL LIABILITIES | 54,665 | 44,324 | ||||||
| EQUITY | ||||||||
| Common Stock, $0.00001 par value 220,000 shares authorized; 69,028 issued and 67,112 outstanding in 2020; 66,199 issued and 65,274 outstanding in 2019 | 1 | 1 | ||||||
| Additional paid-in capital | 144,928 | 130,682 | ||||||
| Treasury stock, at cost: 1,916 and 925 shares held, respectively | (18,928 | ) | (8,623 | ) | ||||
| Accumulated deficit | (70,128 | ) | (70,293 | ) | ||||
| Accumulated other comprehensive (loss) income | (97 | ) | 200 | |||||
| Total eXp World Holdings, Inc, stockholders’ equity | 55,776 | 51,967 | ||||||
| Equity attributable to noncontrolling interest | 224 | 161 | ||||||
| TOTAL EQUITY | 56,000 | 52,128 | ||||||
| TOTAL LIABILITIES AND EQUITY | $ | 110,665 | $ | 96,452 | ||||
| EXP WORLD HOLDINGS, INC. | |||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
| (UNAUDITED) | |||||||
| (In thousands, except per share data) | |||||||
| Three Months Ended March 31, | |||||||
| 2020 | 2019 | ||||||
| Revenues | $ | 271,421 | $ | 157,034 | |||
| Operating expenses | |||||||
| Commissions and other agent-related costs | 243,406 | 142,542 | |||||
| General and administrative expenses | 26,860 | 19,701 | |||||
| Sales and marketing expenses | 944 | 889 | |||||
| Total operating expenses | 271,210 | 163,132 | |||||
| Operating income (loss) | 211 | (6,098 | ) | ||||
| Other expense (income) | |||||||
| Other expense (income), net | 38 | 35 | |||||
| Equity in losses (earnings) of unconsolidated affiliates | 21 | – | |||||
| Total other expense (income), net | 59 | 35 | |||||
| Income (loss) before income tax expense | 152 | (6,133 | ) | ||||
| Income tax expense | 11 | 163 | |||||
| Net income (loss) | 141 | (6,296 | ) | ||||
| Net loss attributable to noncontrolling interest | 24 | – | |||||
| Net income (loss) attributable to eXp World Holdings, Inc. | $ | 165 | $ | (6,296 | ) | ||
| Earnings per share | |||||||
| Basic | $ | 0.00 | $ | (0.10 | ) | ||
| Diluted | $ | 0.00 | $ | (0.10 | ) | ||
| Weighted average shares outstanding | |||||||
| Basic | 65,890 | 60,749 | |||||
| Diluted | 71,593 | 60,749 | |||||
| US-GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA RECONCILIATION | ||||||||
| (In thousands) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2020 | 2019 | |||||||
| Net income (loss) | $ | 141 | $ | (6,296 | ) | |||
| Other expense (income), net | 59 | 35 | ||||||
| Income tax expense | 11 | 163 | ||||||
| Depreciation & amortization expense | 924 | 503 | (1) | |||||
| Stock compensation expense | 3,519 | 3,669 | ||||||
| Stock option expense | 1,073 | 1,215 | ||||||
| Adjusted EBITDA | $ | 5,727 | $ | (711 | ) | |||
| (1) Reclass of $62K for long-term payable amortization | ||||||||
Media Relations Contact:
Cynthia Nowak
Vice president, marketing and communications, eXp Realty
360.419.5285 ext. 116
[email protected]
Investor Relations Contact:
Raymond “RJ” Jones
Executive Vice President, finance and growth, eXp World Holdings
360.761.4393
[email protected]
