EXp posts revenue uptick in Q4 — but not enough to turn a profit

The moment has arrived — the moment to take charge. This summer, at Inman Connect Las Vegas, July 30-Aug 1, 2024, experience the complete reinvention of the most important event in real estate. Join your peers and the industry’s best as we shape the future — together. Learn more.

EXp World Holdings on Thursday revealed that its revenue rose during the fourth quarter of last year, but a difficult market still took a toll on the firm — leading to a net loss and very slow growth in agent headcount.

In total, the company — which is the parent of brokerage eXp Realty — brought in $983 million in revenue between October and December, according to a newly published earnings report. That’s up from $933 million during the fourth quarter of 2022. However, despite that uptick, the company lost $21.2 million, a significant jump from the $7 million loss one year earlier.

The report notes that the Q4 2023 loss includes a “$9.2 million impairment charge for goodwill and amortizable intangible assets related to the Virbela segment.” However, even subtracting that figure, the quarter’s losses were higher than those of Q4 2022.

Glenn Sanford

In the report, eXp World Holdings founder, chairman and CEO Glenn Sanford pointed to last year’s difficult housing market.

“EXp delivered solid revenue in the fourth quarter, despite continued weakness in the United States residential real estate market, thanks to our global base of highly productive agents,” Sanford said. “Our agent-centric model and value proposition, scale and superior efficiency enable us to invest in the success of our agents.”

Market weakness notwithstanding, though, total transactions in Q4 rose 6 percent year over year 115,424.

During a call with investors Thursday afternoon, Sanford added that “2023 has been a difficult year.”

In an apparent first for the industry, the call was held within eXp’s virtual world — which is typically just for agents and eXp personnel — and streamed on YouTube along with a slide show that helpfully included various stats about the company’s performance.

The report also includes numbers for all of 2023. Over the entire year, eXp brought in $4.3 billion in revenue, a 7 percent drop compared to 2022. The company also lost about $9 million, which is a reversal from the $15.4 million profit it turned a year earlier.

Transactions dipped 3 percent year over year to 494,408 in 2023.

Heading into Thursday’s earnings, shares in eXp were trading in the low $11 range. That was up slightly for the day, but down compared to the more than $16 shares were fetching at the beginning of 2024.

EXp shares dipped in after hours trading following the publication of Thursday’s earnings report, but mostly recovered during the company’s investor call.

Credit: Google

EXp had a market cap of about $1.7 billion as of Thursday afternoon.

EXp shares have been somewhat volatile over the past year. Last February they were trading in the mid $13 range, but ultimately shot up to more than $25 in late summer 2023. Another minor pop happened in December, but generally the company’s share price has been trending down since that summer high point.

EXp last reported earnings in November. At the time, the company revealed that it brought in $1.2 billion in revenue between July and September of 2023. That number represented a 2 percent year-over-year dip, but was still enough for the brokerage to turn a profit of $1.3 million.

In addition to revenue and profits, Thursday’s report also reveals that eXp finished the year with 87,515 agents. That’s a 2 percent year-over-year increase, which is notable given that the overall number of total Realtors in the U.S. officially went into decline earlier in 2023.

However, the company’s year-end agent count was also down 1.8 percent compared to the previous quarter. During his investor call, Sanford said that Q4 was the “first time in history our agent count has declined quarter over quarter” — though he added that agent attrition is mostly happening among the least productive agents who do only one or two deals per year.

The agent growth numbers are notable because eXp Realty, more than perhaps any other brokerage, has historically been known for its rapid headcount growth. Back in 2021 when eXp had about 68,000 agents, for instance, Sanford cited the growth rate of that time and predicted the company would soon have 100,000 agents in the U.S. and 500,000 worldwide.

“We think that 100,000 [agents in the United States] is almost a fait accompli in the next few years,” Sanford said at the time.

The market turn of 2022 and 2023 — which was driven by higher mortgage rates and low inventory — has so far thwarted that ambition, which Sanford acknowledged last year at Inman Connect New York. And more broadly, it has shifted the conversation about big real estate companies away from headcount numbers and toward the competition for top talent that can close deals in tougher conditions.

Sanford’s comments during Thursday’s investor call highlighted that shift. He celebrated that the company is recruiting and retaining highly productive agents, as well as teams. And he noted that eXp grew its market share from 3.9 percent in 2022 to 4.2 percent in 2023.

While discussing agent count, Sanford also said during the call “we’re going back to the drawing board over a few different things.” He didn’t provide further details, but noted that going forward “we expect our agent count to return to growth over time.”

Sanford additionally revealed on the call that he hasn’t given up on having a vastly larger number of agents under the eXp banner. When asked about 2024 headcounts, he noted the company has experienced strong growth in international markets such as South Africa, Dubai, France and the U.K. Sanford estimated that there are 20 million agents in the world, and if eXp can “get to the same market penetration” across the globe as it has in the U.S. and Canada, the company could have “potentially a million agents.”

Sanford didn’t say how long it might take for eXp to reach that size. But he did say that international markets are likely to offer the brokerage its greatest growth opportunities in the coming years.

Ultimately, Sanford concluded on the call that eXp is operating right now from a “position of strength.”

“We’re entering 2024,” he said during the call, “with very strong momentum.”

Update: This story was updated after publication with additional details from eXp’s earnings report and commentary from the company’s investor call. 

Email Jim Dalrymple II