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Q3 2020 Revenues Increase 100% to $564 Million, Drives Net Income of $14.9 Million

BELLINGHAM, Wash., Nov. 09, 2020 (GLOBE NEWSWIRE) — eXp World Holdings, Inc. (NASDAQ: EXPI), the parent company for eXp Realty and Virbela, today announced financial results for the third quarter ended September 30, 2020.

Third Quarter 2020 Financial Summary

Management Commentary

“The third quarter of 2020 was highlighted by our record-breaking financial results, driving the most profitable quarter in the company’s history by our continual focus on being the most agent-centric brokerage on the planet,” said Glenn Sanford, Founder, Chairman and CEO of eXp World Holdings. “Despite the unprecedented in-person business restrictions related to COVID-19, our agents were able to continue leveraging our virtual platform to conduct business as usual and close a record number of transactions this quarter. Our continued success is a testament to our long-held, agent-first and cloud-based approach to business, which has enabled us to uniquely thrive in the current environment. Not surprisingly, Virbela—our virtual business platform that supports our entire agent base—is also experiencing a sustained increase in adoption by companies, universities and government agencies seeking remote work and distance learning alternatives.”

“Our clear financial incentives continue to drive successful agents to our platform, as we added more agents than ever before in the third quarter, which now totals more than 38,000 globally. As we look ahead throughout the remainder of the year and into 2021, we expect to continue adding agents at a rapid pace and growing our overall residential real estate business, both domestically and abroad,” concluded, Sanford.

Third Quarter 2020 Operational Highlights

“The momentum we saw in agent and revenue growth in the third quarter is expected to continue into the fourth quarter of 2020 and beyond,” said Jeff Whiteside, CFO and Chief Collaboration Officer of eXp World Holdings. “We’re particularly excited about a few key growth areas taking shape by the end of 2020. Not only do we expect to continue our international expansion efforts by launching brokerage operations in key markets, including South Africa, India and Mexico, but we are also moving forward with the rollout of eXp Commercial and our continued introduction of affiliated services, which ultimately, we expect to drive long-term value for our shareholders.”

Third Quarter 2020 Financial Results – Virtual Fireside Chat

The company will hold a virtual fireside chat and investor Q&A session with eXp World Holdings Founder and CEO, Glenn Sanford, and CFO, Jeff Whiteside, on Tuesday, November 10, 2020 to discuss third quarter financial results and recent achievements.

Date: Tuesday, November 10, 2020
Time: 11:00 a.m. EST (8:00 a.m. PST)
Location: Virbela Open Campus in the Auditorium (Join at www.virbela.com)
Livestream Link: expworldholdings.com/events

About eXp World Holdings

eXp World Holdings, Inc. (NASDAQ: EXPI) owns eXp Realty and Virbela.

eXp Realty, The Real Estate Cloud Brokerage, is one of the fastest-growing, global residential real estate companies with more than 38,000 agents in the United States, Canada, the United Kingdom Australia and South Africa. 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 www.virbela.com.

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:

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 economic and social effects of the COVID-19 pandemic; continued growth of our agent and broker base; expansion of our residential real estate brokerage business into foreign markets; demand for remote working and distance learning solutions and virtual events; development of our new commercial brokerage and our ability to attract commercial real estate brokers; and revenue growth and financial performance. 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 Quarterly Report on Form 10-Q and Annual Report on Form 10-K.

Investor Relations Contact:

Greg Falesnik or Brooks Hamilton
MZ Group–MZ North America
[email protected]

Media Relations Contact:

eXp Realty
[email protected]

EXP WORLD HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
         
    September 30, 2020   December 31, 2019
    (unaudited)    
ASSETS        
CURRENT ASSETS        
Cash and cash equivalents   $ 91,871     $ 40,087  
Restricted cash     22,115       6,987  
Accounts receivable, net of allowance for credit losses of $1,346 and allowance for bad debt of $137, respectively     93,482       28,196  
Prepaids and other assets     3,056       3,549  
TOTAL CURRENT ASSETS     210,524       78,819  
Property, plant, and equipment, net     6,751       5,428  
Operating lease right-of-use assets     839       1,264  
Other noncurrent assets     7       16  
Intangible assets, net     3,521       2,677  
Goodwill     10,558       8,248  
TOTAL ASSETS   $ 232,200     $ 96,452  
LIABILITIES AND EQUITY        
CURRENT LIABILITIES        
Accounts payable   $ 2,610     $ 2,593  
Customer deposits     22,115       6,987  
Accrued expenses     91,333       31,034  
Current portion of long-term payable     1,492       916  
Current portion of lease obligation – operating lease     720       435  
TOTAL CURRENT LIABILITIES     118,270       41,965  
Long-term payable, net of current portion     2,749       1,530  
Long-term lease obligation – operating lease, net of current portion     118       829  
TOTAL LIABILITIES     121,137       44,324  
EQUITY        
Common Stock, $0.00001 par value 220,000,000 shares authorized; 72,321,867 issued and 69,952,115 outstanding in 2020; 66,199,308 issued and 65,273,944 outstanding in 2019     1       1  
Additional paid-in capital     187,675       130,682  
Treasury stock, at cost: 2,369,752 and 925,364 shares held, respectively     (29,953 )     (8,623 )
Accumulated deficit     (46,883 )     (70,293 )
Accumulated other comprehensive income     71       200  
Total eXp World Holdings, Inc. stockholders’ equity     110,911       51,967  
Equity attributable to noncontrolling interest     152       161  
TOTAL EQUITY     111,063       52,128  
TOTAL LIABILITIES AND EQUITY   $ 232,200     $ 96,452  

EXP WORLD HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands, except share amounts and per share data)
         
    Three Months Ended September 30,   Nine Months Ended September 30,
      2020     2019       2020     2019  
Revenues   $ 564,017   $ 282,179     $ 1,188,963   $ 705,918  
Operating expenses                
Commissions and other agent-related costs     517,169     259,141       1,079,739     646,270  
General and administrative expenses     30,130     23,597       82,145     66,503  
Sales and marketing expenses     1,495     1,083       3,326     3,043  
Total operating expenses     548,794     283,821       1,165,210     715,816  
Operating income (loss)     15,223     (1,642 )     23,753     (9,898 )
Other expense                
Other expense, net     80     173       129     198  
Equity in losses of unconsolidated affiliates               34      
Total other expense, net     80     173       163     198  
Income (loss) before income tax expense     15,143     (1,815 )     23,590     (10,096 )
Income tax expense     225     32       295     243  
Net income (loss)     14,918     (1,847 )     23,295     (10,339 )
Net loss attributable to noncontrolling interest     52           115      
Net income (loss) attributable to eXp World Holdings, Inc.   $ 14,970   $ (1,847 )   $ 23,410   $ (10,339 )
                 
Earnings (loss) per share                
Basic   $ 0.22   $ (0.03 )   $ 0.35   $ (0.17 )
Diluted   $ 0.20   $ (0.03 )   $ 0.32   $ (0.17 )
Weighted average shares outstanding                
Basic     69,256,733     63,197,495       67,603,551     61,834,376  
Diluted     75,653,407     63,197,495       73,548,056     61,834,376  

US-GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA RECONCILIATION
(In thousands)
                 
    Three Months Ended September 30,   Nine Months Ended September 30,
      2020     2019       2020     2019  
Net income (loss)   $ 14,918   $ (1,847 )   $ 23,295   $ (10,339 )
Other expense, net     80     173       163     198  
Income tax expense     225     32       295     243  
Depreciation & amortization expense (1)     1,005     642       2,785     1,616  
Stock compensation expense     3,711     3,503       10,476     10,760  
Stock option expense     1,879     1,060       4,179     4,106  
Adjusted EBITDA   $ 21,818   $ 3,563     $ 41,193   $ 6,584  
                 
(1) Note, stock payable amortization is included in other expense as such is not included in this amortization expense

 

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Michael Valdes

Valdes brings more than 25 years of expertise in global real estate and finance to eXp Realty. Most recently, he was Senior Vice President of Global Servicing for all Realogy Corporation brands, including Better Homes & Gardens, Century 21, Coldwell Banker, Corcoran, ERA and Sotheby’s International Realty. In his role, he oversaw the international servicing platform for all Realogy brands across more than 100 countries and opened more than 70 countries during his tenure.

Randall Miles

For over 25 years Mr. Miles has held senior leadership positions in global financial services, financial technology and investment banking companies. His extensive investment banking background at bulge bracket, regional and boutique firms advising financial services companies on strategic and financial needs has crossed many disciplines. Mr. Miles’ transactional and advisory experience is complemented by leadership of public and private equity backed financial technology, specialty finance and software companies including Chairman and CEO at LIONMTS where he was nominated for the Ernst & Young Entrepreneur of the Year award, CEO at Syngence Corporation, COO of AtlasBanc Holdings Corp. and CEO of Advantage Funding / NAFCO Holdings which grew to in excess of $1 billion. Mr. Miles is currently Managing Partner at SCM Capital Group, a global strategic and financial advisory firm and Senior Managing Director at Tigress Financial Partners, a full service institutional broker dealer where is he is head of Investment Banking.

Most recently, Mr. Miles served as Senior Managing Director, Head of FIG and COO, Investment Banking at Cantor Fitzgerald & Co. Mr. Miles has held senior leadership roles at Oppenheimer & Co., D.A. Davidson and & Co., The First Boston Corporation (Credit Suisse) Meridian Capital and Greenwich Capital Markets. Mr. Miles has broad public, private and nonprofit board experience and has been active for many years in leadership roles with the Make-A-Wish Foundation. He presently serves on the boards of Kuity, Corp. and Posiba, Inc. as Vice Chairman and Chairman respectively. Mr. Miles holds a BBA from the University of Washington and holds FINRA licenses Series 7, 24, 63 and 79.

Darren Jacklin

For over 23 years, Darren Jacklin has travelled 4 continents and personally trained and developed over 1 million people in over 46 countries.

He has mentored entrepreneurs and business owners on specific and measurable strategies. These strategies have then been implemented into businesses to increase income, transform obstacles into cash flow and turn passion into profits. Darren has an uncanny ability to increase wealth and success by uncovering hidden assets, overlooked opportunities and undervalued possibilities. His talent has captured the attention of Tiger 21, Family Offices, The Wall Street Journal, Yahoo Finance, NBC TV, CBS TV, CTV, CBC, Global TV, international radio stations, magazines and newspapers, movie producers, best-selling authors, CEO’s and business experts worldwide. Darren is featured as an international celebrity in the 2015 movie The Treasure Map.

Darren Jacklin currently sits on paid international boards of directors and advisory boards of public and private companies and with this experience has advised and successfully helped a company list to the NASDAQ. He has also personally trained 157 Fortune 500 companies such as Microsoft, AT&T, Black & Decker, Barclays Bank, as well as high school, college, and university students and lastly, professional athletes.

Darren Jacklin is the co-founder of Solaris Resort & Estates Ultra Luxury Private Islands and is also very passionate about being a humanitarian and is currently building a new primary Daystar School for Kindergarten to Grade 12 in the slums of Kampala, Uganda, East Africa.

His experience has connected him with people in more than 130 countries Globally.

Fee Gentry

Fee Gentry currently is an eXp Realty agent in Texas, and co-chair and one of the original founders of ONE eXp, eXp Realty’s initiative for diversity and inclusion. She has more than 15 years of experience in the real estate industry, including being named a top local agent in her first year. Gentry also started several businesses in the rehab, fitness and sports training industries. She has a masters from Our Lady of Lake University in San Antonio where she focused on entrepreneurship and marketing.

Gene Frederick

After serving as Controller for Texas Instruments, in 1984 Gene left the corporate world for a career in Real Estate. He first sold for two small companies that were bought out by Coldwell Banker. Three years later he joined Re/Max, and soared to become one of the Top 20 Realtors in Texas. In 1989, Gene started Phoenix-based Realty Executives in Dallas, TX. In 1994 he sold this franchise and hired on with Keller Williams in Dallas as one of the first 10 agents at the Dallas Preston Road Market Center.

Gene has extensive management experience in residential real estate. Prior to joining eXp Realty, LLC., and his appointment to the eXp Board of Directors, he had served over the past two decades in various management capacities at Keller Williams. Among his many accomplishments during his tenure with Keller Williams began when Gene and his wife, Susan, became Team Leaders of the Dallas Preston Road Market Center in 1999 -2006 and grew that office from 100 to 533 agents! Both Gene and Susan were installed into the Keller Williams Team Leader Hall of Fame in 2009.

Gene was the top Team Leader for Keller Williams in recruiting for 4 of the last 11 years, including 2005, 2006, 2012, and 2013. Gene served with Keller Williams most recently out of the Austin NW Market Center as Team Leader, where he grew the office from 320 agents to 641 in 4 years! Prior to that Gene was Regional Director of Keller Williams Virginia from 2007-2009 where he was #1 Nationally in franchise sales for 2007 and 2008.

Gene and Susan currently reside in Austin, Texas, have 5 grown children and 4 grandchildren.

Dan Cahir

Dan has more than 10 years of experience managing public and private equity investments across a variety of industries. Currently, he is the Chief Executive Officer and Chief Investment Officer of Amherst Ave Capital. Previously, he was the portfolio manager at Long Light Capital and a member of the investment teams at Ziff Brothers Investments and Madrone Capital Partners. Dan began his career with Bain & Co., where he advised Fortune 500 and private equity clients on M&A, growth and efficiency initiatives.

Dan holds a Bachelor of Arts in Economics, summa cum laude, from Claremont McKenna College and holds a Master of Business from the Harvard Business School, where he graduated with distinction.

Mike Vein

Mike is an integral part of driving the overall culture and organizational philosophy of eXp Realty. He has more than 20 years of experience strengthening the link between people, technology and corporate strategies for high-growth companies. His areas of expertise are in building scalable HR infrastructures with a focus on culture and organizational growth for rapidly expanding companies.

Prior to eXp Realty, Mike led Human Resources and Talent Acquisition at CloudCraze, a Salesforce company. He currently serves on the Chief Human Resources Officers (CHRO) committee for the Human Resources Management Association of Chicago (HRMAC), an association of strategic HR leaders in the Chicago area.

Glenn Sanford

Since early 2002, Glenn Sanford has been actively involved in the online real estate space. In early 2007, Glenn launched BuyerTours Realty, LLC which, using a combination of web and traditional bricks and mortar, grew to three offices and into two states. After the drop off of the market in late 2008, Glenn and his executive team went back and rewrote the entire business model in recognition of the “perfect storm” of lower revenues, fixed or rising overhead costs, and a consumer with more information and access than ever before. eXp Realty, LLC was launched in October 2009 as the first truly cloud-based national real estate brokerage which meant giving up the traditional bricks and mortar environment and moving to a fully-immersive 3D virtual office environment where agents, brokers and staff collaborate across borders while learning and transacting business from anywhere in the world. In 2013, eXp Realty became a subsidiary of eXp Realty International Corp.

From 2004 to 2007, Glenn ran a large mega-agent team and consulted to Keller Williams International as a member of the Agent Technology Council in the areas of online client acquisition, client conversion and technology. Glenn also was a significant contributor to Keller Williams Internet Lead Generation Masterminds.

Prior to real estate, Glenn was active at the executive level with a number of technology-related companies. In 1998, he founded and served as President for eShippers.com, an online e-commerce and logistics company.

Stacey Onnen

Stacey has more than 19 years of real estate industry experience, and also is a professional speaker, trainer and certified continuing education instructor. Most recently, she was a designated broker and regional manager at a national real estate brokerage, overseeing more than 2,500 agents.

At eXp Realty, Stacey is responsible for eXp Realty U.S. brokerage operations, including compliance, risk management and state license laws.

Dave Conord

As Co-President, Dave leads the U.S. growth and onboarding teams. Dave has more than 18 years of experience in the real estate industry. He was an owner/partner of multiple Keller Williams Realty market centers throughout the Mid-Atlantic and led one of the regions to No. 1 in the company for growth within three years. He also was one of the top recruiters at the company for nine years. At Long & Foster Companies, Dave developed professional and leadership training for sales managers and agents.

Jason Gesing

Jason is Chief Executive Officer, eXp Realty, and a member of the Board of Directors for eXp World Holdings. He has been a critical part of eXp Realty since joining the company in March 2010 and has served in a number of capacities, including Chief Executive Officer, managing broker of multiple states, General Counsel and President. Currently, Jason supports the company’s larger enterprise by evaluating and developing complementary ventures outside of the more traditional residential real estate vertical.

Alex Howland, Ph.D.

Alex founded VirBELA, a social virtual reality platform focused on education and team development with clients in various industries from government to retail. The VirBELA team developed eXp Realty’s cloud-based campus, called eXp World. eXp World Holdings, eXp Realty’s parent company, acquired VirBELA’s core group of products and services in November 2018.

As President of eXp World Technologies, an eXp World Holdings company, Alex leads the development of VirBELA’s products and services to expand the offering to agents, teams and others who could benefit from their own, always-available environments for collaboration.

In the development of VirBELA, Alex was awarded financial support from the Graduate Management Admissions Council, the National Science Foundation, the National Institute of Health, the Laura Arrillaga-Andreessen Foundation and the American Psychological Association to support some of innovations and research.

Alex has a bachelors in organization psychology from Providence College and a doctorate in philosophy from Alliant International University, San Diego Scripps Ranch.

Kent Cheng

Kent is responsible for leading and developing the organization’s global accounting, finance practices and procedures. He also ensures the preparation and analysis of all financial reports comply with all applicable regulations. These vital financial functions enable eXp to continue its rapid growth trajectory and quickly expand its international footprint. He has decades of finance expertise in global finance, accounting and information technology functions in large, complex and geographically dispersed multi-billion-dollar international businesses.

James Bramble

James Bramble is an authority in real estate law, a leader in the housing industry and advocate for acting with integrity. As eXp World Holdings Chief Legal Counsel, General Counsel and Corporate Secretary, James oversees the company’s legal affairs, including corporate governance, litigation and compliance. James has over 20 years of international business experience and has transformed eXp’s legal and compliance functions to empower an agent-centric, globally-scaled organization. James champions eXtend a Hand, eXp’s charitable foundation and is an active member of the Association of Corporate Counsel (ACC) and is a licensed real estate agent.

Courtney Chakarun

As Chief Marketing Officer, Courtney is responsible for amplifying the eXp World Holdings’ brands and overseeing all areas of marketing, including driving digital strategy for growth and enhancing eXp’s value proposition. A recognized thought leader in consumer lending, housing and digital transformation, Courtney was named a HousingWire Rising Star in 2016 and a Woman of Influence in 2019. Courtney has over two decades of marketing and innovation experience and has held various leadership roles at Roostify, CoreLogic and General Electric.

John Tobison

As Chief Information Officer, John Tobison leads software engineering, product management, information technology, product launch, project management, data services and innovation for eXp World Holdings and its companies.

John brings more than 30 years of experience in business and information technology management, helping companies scale products, business processes and staff capabilities for rapid growth.

Previously, he was a key member of the executive leadership teams that grew three successful technology companies from early stage to market leaders. As COO of OutMatch, John led the development of two new software products, helped significantly grow the company through a private equity-funded acquisition of a larger company and developed a new technology road map for the merged company. Before that, he was the Chief Information Officer of CommerceHub, where he re-engineered customer implementation and scaled up IT operations in a high-availability 24x7x365-transaction-processing environment, and MapInfo Corporation, where he ran international IT operations and was part of the management team that took the company public.

Jeff Whiteside

As the Chief Financial & Collaboration Officer, Jeff works closely with Glenn across EXPI and the teams in Realty, finance, technology, marketing, legal, human resources, new business development/M&A, international markets, investor relations, and VirBELA.

He has more than 30 years of experience in global finance and operational leadership including executive positions at General Electric, CommerceHub, Pitney Bowes Software, and RM Sotheby’s Auctions.