eXp World Holdings Second-Quarter 2019 Revenue Up 104% to Record $267 Million - eXp World Holdings
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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

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:

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            
[email protected] 

Investor Relations Contact:
Greg Falesnik
Managing director, MZ Group – MZ North America
949.385.6449
[email protected] 

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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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

Darren Jacklin

For over 25 years, Darren Jacklin has travelled 4 continents and personally trained and developed over 1 million people in over 50 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, Royal 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 Jacklin currently sits on paid international boards of directors and advisory boards of public and private companies internationally. 

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. 

Passionate about making a difference in people’s lives, today, Darren also contributes time to his Global Philanthropy Foundation called Leaders Yielding to New Knowledge (LY2NK) to support the new LY2NK Leadership Academy sustainable schools in the slums of Liberia, West Africa and Uganda, East Africa.

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.