Real EstateBrokerage

Mo’ money, mo’ agents: eXp continued growing in Q1

The company continues to be modestly profitable amid questions about a housing downturn

After steady gains, National Association of Realtors membership has recently dropped, hitting 1.54 million members in April compared to 1.55 million members at the end of 2021.

Agent count, though, is not a problem for eXp World Holdings, which recently surpassed 80,000 agents. In fact, eXp has “the fastest-growing agent base in the history of real estate,” claimed Glenn Sanford, the company’s CEO and founder on an earnings call Wednesday.

More agents have meant more sales for the Bellingham, Washington-based outfit, which catapulted from 239,000 deals in 2020 to 356,000 transaction sides, according to RealTrends figures.

These agent count and deal numbers have, more or less, also translated into higher year-over-year revenue.

On the firm’s first quarter 2022 earnings call with investors on Wednesday, eXp executives reported that the firm recorded $1.0 billion in gross revenue, compared to $583 million in gross revenue for quarter one 2021.

The revenue figure incorporates the agent’s commissions as eXp’s. Once commission and other related expenses are taken out, revenue that stayed with the brokerage was $83 million, compared to $53 million in quarter one 2021.

Also, eXp did post $8.9 million in net income, its latest modestly profitable quarter. The brokerage reported $4.6 million in quarter one 2021 net income.

One theme on Wednesday’s call was international expansion.

Of the brokerages roughly 80,000 agents, 88% are based in the U.S. and 12% are international. During the call, executives expressed their desire in expanding eXp Realty into more global markets.

So far eXp has launched in two new international markets this year, the Dominican Republic and Greece, with the New Zealand operation set to launch later this month. On Tuesday, the brokerage announced that it is establishing operations in Chile and Dubai.

On the call, executives said they expect to announce more international launches in the coming months.

Despite this level of positivity and optimism, uncertainty about the future of the housing market was still noticeable on the call.

“With the Fed projecting additional increases in interest rates and the desire to cool down the housing market at the federal level, I think that does definitely play into things, if they are serious about it,” Sanford said on the call. “We are definitely going to see a slow down in the market in Q3 and Q4, but I think it is actually healthy for the market to slow down a bit. We are still hearing reports of many consumers that are in multiple offer situations and can’t buy the home that they’re looking for because there might be 30 offers on that home. That has reduced a little bit, so now it might be 10 or 12 offers, but it’s not enough. We’re not in a balanced market.”

Executives said eXp will be able to weather the storm.

“eXp was built to thrive in all market conditions,” said Jason Gesing CEO of eXp Realty (as opposed to eXp World Holdings, which Sanford helms). “In fact, I founded the company really during and in response to the Great Recession and designed the operating models flexibility to be adaptable and to thrive in downturns and strong markets…..We’re in a very unique and strong position to grow as a company but also to help brokerage owners who aren’t in such a strong position remain in the business.”

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