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Item 7. Management’s Discussion and Analysis

2026-02-24 compared with 2025-02-20 · 179 added, 379 removed, 110 unchanged (84% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to inform the reader about material information relevant to an assessment of the financial condition and results of operations of eXp World Holdings, Inc.

and its subsidiaries for the three-year period ended December 31, 2024.

The following discussion should be read together with our consolidated financial statements and related notes included elsewhere within this Annual Report.

This discussion contains forward-looking statements that constitute our estimates, plans and beliefs.

Our actual results could differ materially from those anticipated in these forward-looking statements.

See “Forward-Looking Statements” and “Item 1A.

– Risk Factors” included elsewhere within this Annual Report for a discussion of certain risks, uncertainties and assumptions associated with these statements.

This MD&A is divided into the following sections:

● Market Conditions and Industry Trends

● Key Business Metrics

● Recent Business Developments

● Results of Operations

● Business Segment Disclosures

● Liquidity and Capital Resources

● Critical Accounting Policies and Estimates

GAAP Financial Measures

All dollar amounts are in USD thousands except share amounts and per share data and as otherwise noted.

eXp is a diversified portfolio of service-based businesses whose operations benefit substantially from utilizing our enabling technology platform.

The Chief Operating Decision Maker (“CODM”) manages the business and allocates resources as three separate operating segments:

North American Realty;

International Realty;

and Other Affiliated Services.

See additional information in Note 11 –Segment Information to the consolidated financial statements included elsewhere in this Annual Report.

While we do not consider acquisitions a critical element of our ongoing business, we seek opportunities to expand and enhance our portfolio of solutions.

Prior to 2024, eXp managed and reported its operations in four operating business segments which included, in addition to the current business segments, a Virbela segment covering eXp’s historical application-based Virbela business, which was considered discontinued operations beginning in the first quarter of 2024.

The Company completed the disposition of Virbela during the fourth quarter of 2024.

All prior period financial statements and segment information have been reclassified to conform to the current reporting structure in this Annual Report.

See Note 4 – Discontinued Operations to the consolidated financial statements included elsewhere in this Annual Report for additional information regarding the discontinuation of Virbela.

Strategy and Company-Wide Initiatives

Our strategy is to grow organically in the North American and certain international markets by increasing our independent agent and broker network.

We continue to attract productive real estate agents and broker professionals that contribute to our growth;

we are also committed to providing agents with the tools to help them grow their business and increase their productivity.

Through our technology platform, we strive to achieve customer-focused efficiencies that allow us to increase market share and attain strong returns as we scale our business within the markets in which we operate.

By building partnerships and strategically deploying capital, we seek to grow the business and enter attractive vertical and adjacent markets.

Agent Net Promoter Score

In 2024, we continued to focus on achieving operational excellence and understanding and enhancing the experience of both our agents and employees, which we monitor using agent Net Promoter Score (“aNPS”).

NPS is a widely recognized metric for assessing satisfaction and loyalty.

NPS is calculated on a scale ranging from -100 to 100, with scores above 50 considered

Within the Company, we utilize aNPS to evaluate agent satisfaction.

In 2024, the Company achieved an aNPS of 76 for the year and 77 in the fourth quarter, reflecting strong agent alignment with our mission and values.

The NPS process is an important vehicle for delivering our core values of transparency.

While we strive for high satisfaction, it is equally important to investigate a low or unfavorable trend of NPS.

As NPS scores are often leading indicators to agents and employees’ future actions, we can learn quickly what may be a ‘pain point’ or program that is not meeting its desired objective.

We then take that information and translate it into action with an effort to remediate the specific root cause(s) driving the lower score.

During 2024, we remained focused on empowering our agents, increasing their productivity, and maintaining strong engagement through these and other agent-centric initiatives.

Other agent-centric initiatives include our improved agent eXpert Care Desk, which was expanded globally with multi-language capabilities, enhanced agent mentor/mentee offerings and improved performance tracking and management.

Additionally, in response to industry changes in response to US antitrust lawsuits, the Company led the industry by introducing new listing agreements and buyer representation forms for its agents and the industry.

These programs and efforts underscore our commitment to fostering agent success by lowering barriers, increasing earning opportunities, and creating a collaborative, growth-oriented environment.

By continually evolving to meet the needs of our agents and employees, the Company remains well-positioned to continue to drive growth.

Revenue Share Plan

A key component of our capital deployment strategy is our Sustainable Revenue Share Plan (the “Revenue Share Plan”), whereby we pay real estate professionals affiliated with the Company a portion of eXp Realty’s commission for their contribution to Company growth.

We launched the Revenue Share Plan when the Company was in its infancy as a competitive differentiator that has since disrupted the residential real estate brokerage model.

Participants in the Revenue Share Plan are eligible to receive additional income from the Company’s closed real estate transactions based on the participant’s number of frontline qualifying active (“FLQA”) agents and their downline agents.

An FLQA agent is an agent or broker whom a participant (“sponsor”) has personally attracted to the Company and who has met specific real estate transaction volume requirements.

Revenue share is paid to the sponsor from the commission earned by the Company on transactions closed by the sponsor’s FLQAs and their downline agents.

Additionally, all sponsors must adhere to eXp’s policies and procedures and may not, among other things:

(i) take actions that result in criminal liability;

(ii) engage in activities constituting harassment;

or (iii) interfere with, coerce, or otherwise unethically convince a prospective or current agent’s choice of sponsorship declaration.

The supplementary income distributed to the sponsor under the Revenue Share Plan is exclusively derived from the Company's portion of the transaction commission.

Revenue Share supplemental income is not earned on transactions for which the Company does not receive a commission (e.g., when an FLQA has reached the maximum brokerage contribution threshold (i.e., has “capped”) and earns 100% of commission on its closed transactions).

The Revenue Share Plan does not impact or reduce the commission earned by the FLQA on the transaction.

The Company’s costs incurred under the Revenue Share Plan are included as commissions and other agent-related costs in the consolidated statements of comprehensive income.

The Revenue Share Plan is integral to our growth strategy, fostering a collaborative brokerage that aligns with our core values of sustainability and collaborative success.

Regular evaluations are conducted to ensure the plan’s continued alignment with the Company's overarching objectives and for regulatory compliance.

We believed our Revenue Share Plan was crucial in attracting and retaining agents and teams, especially during a period marked by ongoing market contraction, due to lower transaction volumes and higher mortgage rates, and increased agent attrition from the industry.

To further counter these challenges in 2024, we instituted a series of significant enhancements to certain new agent revenue programs, including the ICON Incentive Program and the Revenue Share Capping Incentive Program.

Further, in 2024, we introduced REVenue Share 2.0, which simplified the earnings calculations and provided the agents with the ability to receive their revenue share payment instantly, for a small fee.

These programs were designed to enhance agent earning potential and allow more instant access to earnings.

Agent Stock Ownership

In addition to utilizing aNPS and building programs based on our agents’ feedback, the Company fosters a culture of agent stock ownership through its Agent Growth Incentive Program (“AGIP”) and Agent Equity Program (“AEP”).

Both stock programs align agents’ and brokers’ success with the Company’s performance.

Under AGIP, agents and brokers can earn awards of the Company’s common stock by achieving production and agent attraction benchmarks, reinforcing their stake in the Company’s growth and success.

The AEP further strengthens this ownership culture by allowing agents and brokers in participating jurisdictions to elect to receive 5% of their commission in Company common stock at a discounted market price.

This program not only incentivizes participation but also underscores our commitment to attracting and retaining independent agents and brokers who are invested in the Company’s long-term success.

Together, these programs are integral to our operational strategy, creating a community of stockholder-agents whose interests are aligned with the Company’s performance.

While these initiatives contribute significantly to our commission structure and operating results, they are key to building a scalable, collaborative model that drives sustainable growth.

Additional information for our AGIP and AEP programs are more fully disclosed in Note 10 – Stockholders’ Equity to the consolidated financial statements included elsewhere in this Annual Report.

Operational Excellence

In addition to agent-focused efforts, we realized substantial cost savings from initiatives implemented in 2023 and continued to optimize our operating costs to align with revenue trends in 2024.

Such initiatives included changing the annual in-person shareholders’ meeting to a virtual meeting, continuing to streamline our support organization, moving to a more decentralized, self-empowered frontline staff framework, deploying a seasonal flex offshore resource program for improved supply and demand alignment, and expanding our eXpert care level 1 support desk to include multi-language capabilities and beginning to leverage AI for mentor pairing, document reviews, and staff assistants.

Finally, we have migrated to our proprietary web-based metaverse (Frame VR.io) virtual workspace for both staff and agents with over 2 million visits in 2024.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the consolidated financial statements and accompanying notes included in Part II, Item 8 of this Annual Report.

This Item generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.

Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 are not included, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

All dollar amounts presented below are in USD thousands except share amounts and per share data and as otherwise noted.

2025 Business Developments

The Company announces new agent offerings, markets, and business updates at various times during the year.

Significant announcements during the year ended December 31, 2025 included the following:

First Quarter 2025:

● Announced expansion into Peru.

Second Quarter 2025:

● Announced expansion into Ecuador and Türkiye.

● Launched Land and Ranch Division, empowering agents serving rural, recreational, and agricultural properties.

● Launched the Co-Sponsor Program, allowing agents to name both a Primary Sponsor and a Co-Sponsor.

● Launched U.S.

open-sourced Seller Advisory:

Risks of Limited Market Exposure form .

Third Quarter 2025:

● Announced expansion into Japan.

● Appointed Jesse Hill as Chief Financial Officer of eXp World Holdings, Inc.

● Launched CRM of Choice, allowing agents to choose from three leading customer relationship management platforms.

Fourth Quarter 2025:

● Announced expansion into Romania and the Netherlands.

● Launched Sports and Entertainment Division, empowering agents serving clients in the sports and entertainment industries.

● Appointed Carrie Lysenko as Chief Technology Officer of eXp Realty and Holly Mabery as Chief Brokerage Officer of eXp Realty.

● Launched LYVVE TM , the Company’s global property search platform aggregating listings and related data across multiple countries.

Market Conditions and Industry Trends

Our business is dependent on the volume of home sales transactions and prices, which can vary based on economic conditions within the markets for which we operate.

Changes in these conditions can have a positive or negative impact on our business.

Key economic factors influencing housing markets include economic growth, inflation, interest rates, unemployment, consumer confidence, mortgage availability, and the balance of supply and demand.

In periods of economic growth, rising consumer confidence and lower interest rates, demand typically increases resulting in higher home sales transactions and home sales prices.

Conversely, in periods of economic recession, declining consumer confidence and higher interest rates, demand typically decreases, resulting in lower home sales transactions and home sale prices.

Additionally, regulations imposed by local, state and federal government agencies and geopolitical instability can also negatively impact the housing markets in which we operate.

In 2024, the U.S.

residential existing home sales market decreased 0.7% from 2023, according to preliminary data from the National Association of Realtors (“NAR”).

NAR reported that the preliminary pending home sales index decreased 5.0% in December 2024 compared to December 2023 and decreased 2.7% for the full-year ended December 31, 2024, compared to the full-year of 2023.

The pending home sales index measures housing contract activity and is based on signed real estate contracts for existing single-family homes and condos.

The Company believes that it remains well positioned for growth in the current economic climate.

Despite the challenges of the current housing market, we have a strong base of agent support, which should drive organic market share growth, retention and productivity.

Additionally, our efficient operating model, driven by our cloud-based platform and lack of brick-and-mortar locations, allows us to adapt swiftly to market changes while maintaining lower fixed costs.

We are confident in our ability to leverage our low-cost, high-engagement model.

This approach affords agents and brokers increased income and ownership opportunities while offering a scalable and resilient solution to independent brokerage owners seeking to succeed amid economic fluctuations.

National Housing Inventory

In 2024, the continued relatively higher mortgage rates and higher home prices have caused inventory levels, as measured in months of supply, to rise.

According to NAR, preliminary inventory of existing homes for sale in the U.S.

was 1.2 million or 3.3 months at December 31, 2024, compared to 990,000 or 3.1 months at December 31, 2023.

According to preliminary data from the United States Census Bureau, new construction housing starts decreased by 4.4% in 2024, compared to 2023 and new construction housing completions decreased 0.8% in 2024 on a seasonally adjusted annual rate compared to 2023.

Mortgage Rates

Persistently high mortgage rates continue to negatively impact the demand for homebuying.

Based on Freddie Mac data, the average rate for a 30-year, conventional fixed-rate mortgage was 6.85% in December 2024 compared to 6.61% in December 2023.

Housing Affordability Index

According to preliminary data from NAR, the composite housing affordability index decreased to 99.0 for November 2024 from 100.5 for December 2023.

As home prices and interest rates have increased, the housing affordability index has become unfavorable.

When the index is above 100, it indicates that a family earning the median income has sufficient income to purchase

a median-priced home, assuming a 20 percent down payment and ability to qualify for a mortgage.

The unfavorable housing affordability index is due to increased mortgage rate conditions and higher average home prices driven by inventory levels.

Existing Home Sales Transactions and Prices

According to preliminary data from NAR, existing home sale transactions for the year ended December 2024 decreased 0.7% to 4.06 million compared to 4.09 million for the year ended December 2023.

According to preliminary data from NAR, nationwide existing home sales average price for December 2024 was $404,400, up 6% from $381,400 in December 2023.

For full-year 2024 (preliminary) the nationwide existing home sales average price was $407,500, up 4.7% from $389,300 for full-year 2023.

The Company has three operating and reportable segments as follows:

North American Realty, International Realty and Other Affiliated Services.

We report corporate expenses, as further detailed below, as “Corporate expenses and other.” All segments follow the same basis of presentation and accounting policies.

See Note 2 - Summary of Significant Accounting Policies to the consolidated financial statements included elsewhere in this Annual Report for additional information about the Company’s significant accounting policies.

Corporate expenses include costs incurred to operate eXp World Holdings, Inc., including expenses incurred in connection with strategic resources provided to the agents, as well as certain other centrally managed expenses that are not allocated to the operating segments, including administrative, brokerage operations and legal functions.

The CODM uses Adjusted Segment EBITDA as a key metric to evaluate the operating and financial performance of a segment, identify trends affecting the segments, develop projections and make strategic business decisions and allocate resources.

The following discussion focuses on the operating performance of the Company for the years ended December 31, 2024, 2023, and 2022 and the financial condition of the Company as of December 31, 2024 and 2023.

Our performance is closely tied to housing market activity, which is influenced by economic conditions such as employment, consumer confidence, mortgage availability, interest rates, and the balance of supply and demand.

Periods of economic growth and lower interest rates generally support higher home sales activity, while rising rates, affordability constraints, or broader economic slowdowns may reduce transaction volumes and pricing.

Regulatory developments, geopolitical events, and shifts in consumer sentiment can also affect housing demand.

In 2025, U.S.

home sales were relatively flat compared to 2024, and home sales prices increased 1.7%, according to the NAR.

Inventory levels remain constrained, and new housing construction activity decreased during the year.

These conditions may continue to limit transaction volumes in the near term.

Despite these challenges, we believe the Company is positioned for growth with a strong base of agents, an efficient cloud-based operating model, and low fixed costs.

This structure allows us to adapt quickly to market changes while supporting long-term productivity and retention.

Key Business Metrics

Management uses our results of operations, financial condition, cash flows and key business metrics related to our business and industry to evaluate our performance and make strategic decisions.

The following table outlines the key business metrics that we periodically review to track the Company’s performance:

7 unchanged sentences

Real estate per transaction cost

Operating (loss) profit

Adjusted EBITDA (1)

(1) Adjusted EBITDA is not a measurement of our financial performance under U.S.

Gross profit (2)

Operating income (loss) (2)

Consolidated adjusted EBITDA (1)(2)

(1) Consolidated 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.

For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net (loss) income, and a discussion of why we believe Adjusted EBITDA is useful to investors, see “Non-U.S.

For a definition of consolidated adjusted EBITDA and a reconciliation of consolidated adjusted EBITDA to net income (loss), and a discussion of why we believe consolidated adjusted EBITDA is useful to investors, see “Non-U.S.

GAAP Financial Measures”.

(2) Dollar amounts are presented in thousands

Agent Net Promoter Score (“aNPS”)

aNPS is a scale-based measure of customer satisfaction and an aNPS above 50 is considered excellent.

aNPS plays a crucial role in attracting and retaining agents and teams, especially during a period marked by ongoing market contraction, due to lower transaction volumes and higher mortgage rates, and increased agent attrition from the industry.

The Company’s aNPS improved to 76 in 2024 compared to 73 in 2023.

Despite the challenging market conditions, aNPS improved due to significant investments in brokerage operations and enhancements to agent revenue programs, including ICON Incentive Program, the Revenue Share Capping Incentive Program, and REVenue Share 2.0.

One of our key strengths is continuing to attract and retain productive real estate agent and broker professionals that contribute to our growth.

We are also committed to providing agents with the tools to help them grow their business and increase their productivity.

The rate of growth of our agent and broker base is difficult to predict and is subject to many factors outside of our control, including actions taken by our competitors and macroeconomic factors affecting the real estate industry in general including interest rates, declining transaction volume in the U.S., and industry practice changes.

The number of agents declined (5.2)% in 2024, compared to 2023, as we continue to off board less productive agents.

However, we have attracted and retained productive agents in the United States and Canada through the execution of our growth strategies and the end-to-end suite of services we offer our agents.

aNPS plays a crucial role in attracting and retaining agents and teams.

Despite the challenging market conditions, aNPS was relatively flat, when compared to the prior year, and the Company continues to provide enhancements to agent programs and offerings, including the Co-Sponsor Program, CRM of Choice, and the launch of new specialized divisions.

The number of agents was relatively flat in 2025 compared to 2024.

The Company continues to attract and retain productive agents through the execution of its growth strategies and the end-to-end suite of services the Company offers its agents.

Real Estate Sales Transactions and Sales Volume

Real estate sales transactions are based on the side (buyer or seller) of each real estate transaction and are recorded when our agents and brokers represent buyers or sellers in the purchase or sale, respectively, of a home.

The number of real estate transactions is a key driver of our revenue and profitability.

Transaction volume represents the total sales value for all transactions and is influenced by several market factors, including, but not limited to, the pricing and quality of our services and market conditions that affect home sales, such as macroeconomic factors, economic growth, local inventory levels, mortgage interest rates, and seasonality.

Real estate sales transactions increased 2.7% in 2024, compared to 2023, primarily driven by increased sales volume in Canada and in our international markets.

Real estate sales volume increased 9.4% in 2024, compared to 2023 driven by increased sales prices, and to a lesser extent, increased transactions.

Transaction volume represents the total sales value for all transactions.

Real estate sales transactions increased 1% during 2025 compared to 2024, primarily driven by increased sales transactions in Canada and in our international markets.

Real estate sales volume increased 5% in 2025 compared to 2024 driven by increased sales prices in North America and in our international markets, and to a lesser extent, increased transactions.

Other real estate transactions

Other real estate transactions are recorded for leases, rentals and referrals that are undertaken by our agents and brokers.

Other real estate transactions increased 18% in 2024, compared to 2023.

The increase in other real estate transactions was primarily driven by higher mortgage rates and affordability challenges shifting demand toward rentals, strategic expansion of our referral network and leasing services, enhanced agent productivity through training and technology improvements.

Other real estate transactions are recorded for leases, rentals and referrals that are undertaken by the Company’s agents and brokers.

Other real estate transactions decreased during 2025 compared to 2024.

The decrease in other real estate transactions was primarily driven by changes in the rental market, and shift in mix toward real estate sales.

Real estate per transaction cost

Real estate per transaction cost is measured as selling, general and administrative, sales and marketing and technology and development expenses in North American Realty and International Realty segments, divided by total transactions (real estate sales transactions and other real estate transactions).

Real estate per transaction cost decreased (2.6)% in 2024, compared to 2023, primarily due to lower costs attributable to cost containment initiatives, partially offset by legal expenses related to the antitrust lawsuits.

Real estate per transaction cost increased during 2025 compared to 2024, primarily due to employee-related, technology and legal expenses.

Revenues represent the commission revenue earned by the Company for closed brokerage real estate transactions.

Revenues increased 6.9% in 2024, compared to 2023, primarily driven by increased home sale prices, and higher sales transactions.

Revenues decreased (6.9)% in 2023, compared to 2022.

Revenues decreased in 2023 primarily because of lower volume of real estate brokerage commissions, which is attributable to a decrease of overall real estate transactions and lower home sales prices in our markets, partially offset by growth in our agent base, compared to 2022.

Operating (Loss) Profit

The operating (loss) profit decreased ($19.5) million in 2024, compared to 2023.

Operating (loss) profit in 2024 includes $34.0 million related to litigation contingency accrual and $4.9 million of impairment expense Operating profit, excluding the litigation contingency accrual and the impairment expense in 2024 improved substantially due to increased revenue, net of agent commissions and other agent-related costs and lower operating costs, partially offset by legal expenses related to the antitrust lawsuits.

Our operating profit decreased ($15.8) million in 2023, compared to 2022 due to a decrease in revenues partially offset by a decrease in operating expenses.

Adjusted EBITDA

Management reviews Adjusted EBITDA, which is a non-U.S.

Revenues increased during 2025 compared to 2024, primarily driven by increased home sale prices in the U.S., and increased sales transactions in Canada and international markets.

Gross profit decreased in 2025 when compared to 2024, reflecting revenue growth, offset by increased agent capping and lower agent fees.

Operating Income (Loss)

Operating income (loss) increased in 2025, when compared to 2024, due to increased legal expenses and accruals, employee-related and other operating expenses, including expenses to support our continued technology improvements.

Operating income (loss) in 2024 includes $34.0 million related to litigation contingency accrual and $4.9 million of impairment expense.

Consolidated Adjusted EBITDA

Management reviews consolidated adjusted EBITDA, which is a non-U.S.

GAAP financial measure, to understand and evaluate our core operating performance.

Adjusted EBITDA increased $10.2 million in 2024, compared to 2023.

The improvement in Adjusted EBITDA reflects increased revenues, partially offset by legal expenses related to antitrust lawsuits and higher operating costs.

Adjusted EBITDA decreased ($6.2) million in 2023, compared to 2022, which reflects lower revenues, partially offset by lower operating costs.

RECENT BUSINESS DEVELOPMENTS

North American Realty Initiatives

The Company continues to focus on growth in the United States and Canada by attracting and retaining top-producing agents while providing growth opportunities and support for agents at all stages of their careers.

During 2024, the Company introduced various agent-focused initiatives and incentive programs designed to enhance agent earning potential and to attract culturally aligned agents, teams and independent brokerages to the Company.

These programs include the ICON Incentive Program, the Revenue Share Capping Incentive Program, and REVenue Share 2.0, which offer unique financial incentives by lowering barriers to entry, facilitating seamless transitions to eXp, and rewarding agents for contributing to growth.

Additionally, the Company launched new ancillary programs and services to support the development and success of its agents, brokers, and clients.

These initiatives include eXp Elevate Coaching, Global Agent Referral Platform, eXp Commercial Groups, new on-demand eXp University courses including the Fast Cap Training Program and Fast Start Series, and affiliate relationships with Sisu and Canva.

In 2024, the Company acquired the assets of LUXVT to enhance our eXp Luxury agent program, which experienced continued growth throughout the year.

International Realty Initiatives

We have operations in the U.K., Australia, France, India, Mexico, Portugal, South Africa, Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Panama, Germany, the Dominican Republic, Greece, New Zealand, Chile, Poland and Dubai.

During 2024, the Company announced plans to expand into Türkiye, Peru and Egypt, currently expected to be launched in 2025.

The Company continues to pursue growth opportunities and increase market share in the countries where operations began in recent years.

The Company has focused on increasing productivity throughout our international entities.

Our operations in the U.K, South Africa, and France in particular are experiencing meaningful agent and transaction growth.

During 2024, we launched the Global Agent Referral Program, which is designed to simplify and accelerate the real estate referral process and is part of our expansive set of innovative tools to empower our agents worldwide to effortlessly connect and collaborate, contributing to a robust and interconnected global marketplace.

Other Affiliated Services

In 2024, the Company strategically realigned its affiliated services to better meet the evolving needs of agents, brokers, and customers.

In response to the increasing demand for mobile and web-accessible platforms, the Company fully transitioned to FrameVR.io, our web-based immersive 3D platform that facilitates seamless virtual collaboration without the need for extensive hardware or software installations.

FrameVR.io enhances accessibility and user experience, aligning with our commitment to innovation.

After December 31, 2024, the Company’s CODM began managing the FrameVR.io business as part of the North American Realty segment.

As a result, in the first quarter of 2025, the Company reclassified FrameVR.io from the Other Affiliated Services segment to the North American Realty segment to align with this change in management approach.

SUCCESS® Enterprises LLC (“SUCCESS”) continued to empower personal and professional development through its diverse multi-media properties, including SUCCESS® magazine, SUCCESS.com, newsletters, podcasts, and the SUCCESS® speakers bureau.

The print magazine industry has experienced significant disruptions over the last several years, driven by technological advancements, evolving consumer preferences and economic pressures.

In September 2024, we launched SUCCESS+™, an all-inclusive subscription model powered by AI-driven coaching and DISC assessments, offering personalized learning experiences to our community.

The organization continues to invest in robust sales and marketing initiatives, with a focus on expanding membership, subscribers, and clients across diverse industries and global sectors.

RESULTS OF OPERATIONS

Year ended December 31, 2024 vs.

Consolidated adjusted EBITDA decreased by $42.3 million in 2025, compared to 2024.

The decrease in consolidated adjusted EBITDA reflects a decrease in operating results related to increased agent capping and lower agent fees, as well as increased employee-related, technology and legal expenses, which more than offset increased revenues.

Consolidated Operating Performance

Year Ended December 31, 2025

December 31, 2024

December 31, 2023

Year Ended December 31, 2024

Change 2025 vs.

Statement of Operations Data:

Operating expenses

Commissions and other agent-related costs

Operating expenses

General and administrative expenses

4 unchanged sentences

Total operating expenses

Operating (loss) income

Operating income (loss)

Other (income) expense

Total other (income) expense, net

Equity in losses of unconsolidated affiliates

Other (income) expense, net

Equity in (income) losses of unconsolidated affiliates

Total other (income) expense, net

(Loss) income before income tax expense

Income (loss) before income tax expense

Income tax (benefit) expense

Net (loss) income from continuing operations

Adjusted EBITDA (1)

(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.

For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, and why we believe Adjusted EBITDA is useful to investors see “Non-U.S.

GAAP Financial Measures”.

December 31, 2024

December 31, 2023

Total revenues increased 7% due to higher home sales prices and an increase in real estate transactions in 2024, driven by improved agent productivity and increased international production in previously launched markets.

December 31, 2024

December 31, 2023

Net income (loss) from continuing operations

Net income (loss) from discontinued operations

Net income (loss)

Commissions and Other Agent-Related Costs

Commissions and other agent-related costs increased 7% primarily because of the increase in real estate transactions and increased home sales prices.

Commissions and other agent-related costs include sales commissions, revenue share and stock-based compensation paid to our agents.

December 31, 2024

December 31, 2023

Commissions and other agent-related costs increased 5% primarily because of the increase in real estate transactions and increased home sales prices, as well as increased agent capping.

Commissions and other agent-related costs include sales commissions, revenue share and stock-based compensation paid to the Company’s agents.

General and Administrative Expenses

General and administrative expenses increased 2% due to increased employee-related expenses and increased legal expenses related to the antitrust lawsuits, partially offset by lower costs related to the shareholders summit in 2024, because it was conducted virtually, and lower eXpcon costs.

General and administrative expenses increased 9% due to increased employee-related expenses, including severance and increased legal expenses and accruals, and increased costs in agent-related seminars and conferences.

General and administrative expenses include costs related to wages, employee stock compensation, and other general overhead expenses.

December 31, 2024

December 31, 2023

Technology and Development Expenses

Technology and development expenses decreased (2)%, primarily due to higher capitalized technology investments.

These expenses include employee-related costs and other expenses related to the maintenance and development of the technology used by both our agents and our employees.

December 31, 2024

December 31, 2023

Technology and development expenses increased 20%, primarily due to increased technology expenses related to continued improvements in our technology offerings to our agents.

These expenses include employee-related costs and other expenses related to the maintenance and development of the technology used by both the Company’s agents and employees .

Sales and Marketing Expenses

Sales and marketing expenses decreased (1)% in 2024 compared to 2023 due to decreased advertising in the U.S.

and Canada residential real estate market.

December 31, 2024

December 31, 2023

Total other (income) expense, net

Other (income) expense, net increased 9% primarily due to increased interest income when compared to 2023.

Sales and marketing expenses decreased (11)% in 2025 compared to 2024 due to decreased lead capture and advertising expenses in the residential real estate market.

Other (Income) Expense, Net

Other (income) expense, net increased 62% primarily due to lower interest income and increased other expenses.

Other (income) expense, net includes interest income earned on cash and cash equivalents, and (earnings) losses related to equity investments.

December 31, 2024

December 31, 2023

Income Tax (Benefit) Expense

The Company’s provision for income tax (benefit) expense from continuing operations decreased $1.1 million from the year ended December 31, 2023.

The decrease in income tax (benefit) expense was primarily attributable to the decrease in excess benefit from stock-based compensation in the current year.

Refer to Critical Accounting Policies and Estimates within the MD&A and Note 13 - Income Taxes to the consolidated financial statements included elsewhere in this Annual Report for further information.

Year ended December 31, 2023 vs.

Year ended December 31, 2022

December 31, 2023

December 31, 2022

Statement of Operations Data:

Operating expenses

Commissions and other agent-related costs

General and administrative expenses

Technology and development expenses

Sales and marketing expenses

Total operating expenses

Operating (loss) income

Other (income) expense

Total other (income) expense, net

Equity in losses of unconsolidated affiliates

Total other (income) expense, net

(Loss) income before income tax expense

Income tax (benefit) expense

Net (loss) income from continuing operations

Adjusted EBITDA (1)

(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.

For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, and why we believe Adjusted EBITDA is useful to investors see “Non-U.S.

GAAP Financial Measures”.

December 31, 2023

December 31, 2022

Total revenues decreased 7%, primarily because of the lower volume of real estate brokerage commissions, which is attributable to a decrease of overall real estate transactions and lower home sales prices in our markets, partially offset by growth in our agent base, compared to 2022.

December 31, 2023

December 31, 2022

Commissions and other agent-related costs

Commissions and other agent-related costs decreased 6% primarily because of a decrease in overall real estate transactions and lower home sales prices, partially offset by growth in our agent base and an increase in agent-related stock-based compensation.

December 31, 2023

December 31, 2022

General and administrative expenses

General and administrative expenses decreased 10% due to lower reported stock compensation expense, partially offset by increased employees, increased contract labor wages and compensation and increases in seminars and conferences expenses.

December 31, 2023

December 31, 2022

Technology and development expenses

Technology and development expenses increased 10%, primarily due to increased investment in technology.

December 31, 2023

December 31, 2022

Sales and marketing expenses

Sales and marketing expenses decreased (21)% due to decreased advertising in the U.S.

and Canada residential real estate market.

December 31, 2023

December 31, 2022

Total other (income) expense, net

Other (income) expense, net increased primarily due to increased interest income when compared to 2022.

December 31, 2023

December 31, 2022

Income tax (benefit) expense

The Company’s provision for income tax (benefit) expense from continuing operations decreased $8.2 million from the year ended December 31, 2022.

The decrease in income tax benefit was primarily attributable to the decrease in excess benefit from stock-based compensation in 2023 and higher non-deductible executive compensation expenses.

The increase in income tax (benefit) expense was primarily attributable to the decrease in research and development (“R&D”) credit generation in the current year.

Refer to Critical Accounting Policies and Estimates within the MD&A and Note 12 - Income Taxes to the consolidated financial statements included elsewhere in this Annual Report for further information.

BUSINESS SEGMENT DISCLOSURES

See Note 11 – Segment Information to the consolidated financial statements included elsewhere in this Annual Report for additional information regarding our business segments.

The following table reflects the results of each of our reportable segments during the years ended December 31, 2024 and 2023:

Segment Operating Performance

The Company has three operating and reportable segments as follows:

North American Realty, International Realty and Other Affiliated Services.

We report corporate expenses, as further detailed below, as “Corporate expenses and other.” All segments

follow the same basis of presentation and accounting policies.

See Note 10 – Segment Information to the consolidated financial statements included elsewhere in this Annual Report for additional information regarding the Company’s business segments.

The following table reflects the results of each of the Company’s reportable segments for 2025 and 2024:

December 31, 2025

December 31, 2024

Change 2025 vs.

Statement of Operations Data:

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Other Affiliated Services

Segment eliminations

Corporate expenses and other

Total Consolidated Revenues

Adjusted Segment EBITDA (1)

Segment Adjusted EBITDA (1)

North American Realty

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Other Affiliated Services

Total Adjusted Segment EBITDA

Corporate expenses and other

Total Reported Adjusted EBITDA (1)

(1) Adjusted Segment EBITDA is not a measurement of our financial performance under U.S.

Total Segment Adjusted EBITDA (1)

Operating Income (Loss)

North American Realty

International Realty

Other Affiliated Services

Corporate expenses and other

Total Consolidated Operating Income (Loss)

(1) Segment 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.

For a definition of Adjusted Segment EBITDA and a reconciliation of Adjusted Segment EBITDA to net income, and a discussion of why we believe Adjusted Segment EBITDA is useful to investors, see “Non-U.S.

For a definition of segment adjusted EBITDA and a reconciliation of segment adjusted EBITDA to net income, and a discussion of why we believe segment adjusted EBITDA is useful to investors, see “Non-U.S.

GAAP Financial Measures”.

Management evaluates the operating results of each of its reportable segments based upon revenue and Adjusted Segment EBITDA.

Adjusted Segment EBITDA is defined by us as net income before depreciation and amortization, stock-based compensation expense, interest expense, net, income taxes, impairment expense and other items that are not core to the operating activities of the Company.

The Company’s presentation of Adjusted Segment EBITDA may not be comparable to similar measures used by other companies.

North American Realty revenue increased 6% in 2024 compared to 2023 primarily due to an increase in average selling price in the U.S.

and in overall real estate transactions in Canada, and improved agent productivity, partially offset by reductions in our agent base.

Adjusted Segment EBITDA increased 9% primarily due to an increase in gross profit related to the increase in real estate transactions and increased home selling prices.

International Realty revenue increased 63% in 2024 compared to 2023 primarily due to increased real estate transactions driven by increased productivity in previously launched markets.

Adjusted Segment EBITDA improved in 2024 compared to 2023 due to gross profit improvements related to increase in revenue.

Other Affiliated Services revenue increased 27% due to an increase in FrameVR.io technology revenue, partially offset by a decrease in coaching revenue.

Adjusted Segment EBITDA decreased by (28)% primarily due to an increase in personnel costs.

Management evaluates the operating results of each of its reportable segments based upon revenue, Segment adjusted EBITDA and operating income (loss).

Segment adjusted EBITDA is defined by us as net income before depreciation and amortization, interest expense, income taxes, stock compensation expense, stock option expense, and other items that are not core to the operating activities of the Company.

The Company’s presentation of segment adjusted EBITDA may not be comparable to similar measures used by other companies.

North American Realty revenue increased 3% during 2025 compared to 2024 primarily due to an increase in home sale prices in the U.S.

and in overall real estate transactions in Canada, and improved agent productivity, partially offset by reductions in the Company’s agent base.

North American Realty adjusted EBITDA as well as operating income (loss) decreased during 2025 compared to 2024 due to increased commissions and other agent-related costs as a result of increased capping and lower agent fees, as well as increased operating costs, including employee-related, technology and legal expenses.

International Realty revenue increased 67% during 2025 compared to 2024 primarily due to increased real estate transactions driven by increased productivity in previously launched markets, as well as the strategic launch of several new markets during the year.

International Realty adjusted EBITDA and operating income (loss) reflect the higher costs of entering new countries.

Other Affiliated Services revenue decreased (53)% during 2025 compared to 2024 due to lower SUCCESS® Magazine revenues.

Other Affiliated Services adjusted EBITDA decreased due to lower revenues and increased costs, including severance costs.

Operating income (loss) in 2024 includes $4.9 million of impairment expenses.

Corporate expenses and other contain the costs incurred to operate the corporate parent of eXp Realty.

Corporate expenses increased 13% in 2024 compared to 2023.

Liquidity and Capital Resources

This section generally discusses items pertaining to and comparisons of financial results between 2024 and 2023.

Discussions of 2022 items and comparisons between 2023 and 2022 liquidity and capital resources can be found in “Management’s Discussion and Analysis Liquidity and Capital Resources” in Part II, Item 7 of the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2023 (the “2023 MD&A”).

The 2023 MD&A is incorporated by reference herein from Part II, Item 7 of our annual report on Form 10-K filed on February 22, 2024 (Commission File No.

Our primary sources of liquidity are our cash and cash equivalents on hand and cash flows generated from our business operations.

Our ability to generate sufficient cash flow from operations or to access certain capital markets, including banks, is necessary to fund our operations and capital expenditures, repurchase our common stock and meet obligations as they become due.

At present, our cash and cash equivalents balances and cash flows from operations have remained positive, as we focused on cost savings initiatives and operational excellence despite the challenging market conditions of 2024.

Currently, our primary use of cash on hand is to sustain and grow our business operations, including, but not limited to, commission and revenue share payments to agents and brokers and cash outflows for operating expenses.

During 2024, we utilized our cash on hand to support our agent productivity, growth initiatives and investment in technology, and to a lesser extent, for repurchases of our common stock and quarterly cash dividends.

There can be no assurance that future cash dividends will be declared by the Board of Directors or that the stock repurchase program will be sustained or proceed at historical levels.

For information regarding the Company’s expected cash requirement related to settlement costs, see Note 14 – Commitments and Contingencies to the consolidated financial statements included elsewhere in this Annual Report .

We believe that our existing balances of cash and cash equivalents and cash flows expected to be generated from our operations will be sufficient to satisfy our normal operating requirements for at least the next 12 months.

Our future capital requirements will depend on many factors, including the outcome of pending antitrust litigation settlement, our level of investment in technology, our rate of growth into new markets and cash used to pay quarterly cash dividends and repurchase shares of the Company’s common stock.

Our capital requirements may be affected by factors which we cannot control such as the changes in the residential real estate market, interest rates and other monetary and fiscal policy changes to the manner in which we currently operate.

In order to support and achieve our future growth plans, we may need or seek advantageously to obtain additional funding through equity or debt financing.

We believe that our current operating structure will facilitate sufficient cash flows from operations to satisfy our expected long-term liquidity requirements beyond the next 12 months.

The Company believes that its existing balances of cash and cash equivalents and cash flows expected to be generated from its operations will be sufficient to satisfy its normal operating requirements for at least the next 12 months and beyond.

As of December 31, 2025, the Company’s cash and cash equivalents totaled $124.2 million.

Cash equivalents are comprised of financial

instruments with an original maturity of 90 days or less from the date of purchase, primarily money market funds.

The Company currently does not hold any other marketable securities.

We currently do not hold any bank debt, nor have we issued any debt instruments through public offerings or private placements.

As of December 31, 2024, our cash and cash equivalents totaled $113.6 million.

Cash equivalents are comprised of financial instruments with an original maturity of 90 days or less from the date of purchase, primarily money market funds.

We currently do not hold any other marketable securities.

Currently, the Company’s primary use of cash on hand is to sustain and grow its business operations, including, but not limited to, commission and revenue share payments to agents and brokers and cash outflows for operating expenses.

During 2025, the Company utilized its cash on hand to support our agent productivity, growth initiatives and investment in technology, the first payment of the litigation contingency in the antitrust lawsuits settlement and to a lesser extent, for repurchases of its common stock and quarterly cash dividends.

See Note 13 – Commitments and Contingencies to the consolidated financial statements included elsewhere in this Annual Report for further information related to the Company’s litigation.

Share Repurchase Program

The Company has an authorized share repurchase program which is currently approved by the Board up to $1.0 billion in aggregate.

The program does not obligate the Company to acquire a minimum amount of shares.

Additionally, during 2023, 2024, and 2025, the Company has paid quarterly cash dividends.

As of December 31, 2025, the Company’s quarterly cash dividend was $0.05 per share.

During 2025, the Company repurchased $56.2 million of its common stock and paid cash dividends of $30.8 million.

There can be no assurance that future cash dividends will be declared by the Board or that the stock repurchase program will be sustained or proceed at historical levels.

Legal Proceedings

For information regarding the Company’s expected cash requirement related to settlement costs, see “ Contingencies ” under Note 13 – Commitments and Contingencies to the consolidated financial statements included elsewhere in this Annual Report .

The Company’s future capital requirements will depend on many factors, including the outcome of pending antitrust litigation settlement, its level of investment in technology, its rate of growth into new markets and cash used to pay quarterly cash dividends and repurchase shares of the Company’s common stock.

The Company’s capital requirements may be affected by factors which it cannot control such as the changes in the residential real estate market, interest rates and other monetary and fiscal policy changes to the manner in which it currently operates.

In order to support and achieve the Company’s future growth plans, it may need or seek advantageously to obtain additional funding through equity or debt financing.

Net Working Capital

Net working capital is calculated as the Company’s total current assets less its total current liabilities.

The following table presents our net working capital for the periods presented:

The following table presents the Company’s net working capital for the periods presented:

December 31, 2025

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Net working capital

As of December 31, 2024, net working capital decreased ($42.7) million, or (34)%, compared to the prior year, primarily due a decrease in cash and cash equivalents of ($12.3) million and an increase in the litigation contingency accrual of $34 million related to the antitrust lawsuits, partially offset by an increase in accounts receivable of $2.3 million and a decrease in accrued expenses of ($0.8) million.

As of December 31, 2025, net working capital increased by $23.0 million, or 28%, compared to the prior year, primarily due to an increase in accounts receivable, due to the timing of revenue in December, partially offset by an increase in accrued expenses.

The following table presents our cash flows for the periods presented:

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Net cash provided by operating activities

Net cash used in investment activities

Net cash used in investing activities

Net cash used in financing activities

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Net change in cash, cash equivalents and restricted cash

For the year ended December 31, 2024, cash provided by operating activities decreased (8)% compared to the same period in 2023, primarily due to lower agent equity program participation in 2024, partially offset by an increase in gross profit net of agent commission and related expenses.

For the year ended December 31, 2024, cash used in our investing activities increased 44% compared to the same period in 2023, primarily due to an increase in cash spend of ($6.2) million in acquisitions, and an increase in purchases of property, plant, and equipment, partially offset by a decrease in investments unconsolidated subsidiaries.

For the year ended December 31, 2024, cash used in financing activities decreased by (7)%, compared to the same period in 2023, primarily related to lower repurchases of our common stock of ($19.4) million compared to 2023, partially offset by decreased proceeds from stock option exercises $3.0 million and an increase in dividend payments of $1.6 million compared to 2023.

As we continue to scale our Company by investing in people, technology and processes, we believe we are well positioned to grow productive agents and revenues in the U.S., Canada and selectively international markets.

These statements involve risks, uncertainties, assumptions and other factors that are difficult to predict and that could cause actual results to vary materially from those expressed in them.

Factors include, among others, (i) changes in demand for the Company’s services and changes in consumer behavior;

(ii) macroeconomic conditions beyond our control;

(iii) the Company’s ability to effectively maintain its infrastructure to support its operations and initiatives;

(iv) the impact of governmental regulations related to the Company’s operations;

(v) the outcome of ongoing antitrust litigation;

and (vi) other factors, as described in this Annual Report in Part II, Item 1A, “Risk Factors.”

For the year ended December 31, 2025, cash provided by operating activities decreased (38)% compared to the same period in 2024, primarily due to lower agent equity program participation, increased accounts receivable, net, due to the timing of revenue in December, as well as the first payment of $17 million related to the antitrust litigation accrual, partially offset by an increase in accrued expenses.

For the year ended December 31, 2025, cash used in our investing activities increased 21% compared to the same period in 2024, primarily due to an increase in investments in unconsolidated subsidiaries.

For the year ended December 31, 2025, cash used in financing activities decreased by (49)%, compared to the same period in 2024, primarily related to lower repurchases of our common stock of ($84.9) million.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with U.S.

GAAP requires us to make certain judgments and assumptions, based on information available as of the reporting date of the financial statements, in determining accounting estimates used in the preparation of the statements.

Our significant accounting policies are described in Note 2 – Summary of Significant Accounting Policies to the consolidated financial statements included elsewhere in this Annual Report.

Accounting estimates are considered critical if the estimate requires us to use judgments and/or make assumptions about matters that were uncertain at the time the accounting estimate was made and if different accounting estimates could have been used in the reporting period or changes in the accounting estimates are likely to occur that would have a material impact on our financial condition, results of operations or cash flows.

GAAP and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make certain judgments and assumptions and estimates that affect the amounts reported.

The Company’s significant accounting policies are described in Note 2 – Summary of Significant Accounting Policies to the consolidated financial statements included elsewhere in this Annual Report.

Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Stock-based compensation

Our stock-based compensation is comprised of AGIP, AEP, stock option awards and restricted stock units.

The Company accounts for stock-based compensation granted to employees and non-employees using a fair value method.

The Company’s stock-based compensation is comprised of stock option awards and restricted stock unit grants to service providers, including, but not limited to, agents, employees, and directors.

The Company accounts for stock-based compensation using a fair value method.

Stock-based compensation awards are measured at the grant date fair value and the stock-based compensation cost is recognized over the requisite service period of the awards, usually the vesting period, on a straight-line basis, net of forfeitures.

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Recognition of compensation cost for an award with a performance condition is based on the probable outcome of that performance condition being met.

The Company estimates the share-based liability based on estimated performance probabilities using our most recent estimates on probable achievement of the performance measures established under our AGIP.

These estimates are calculated based on the agent’s historical performance for each award type.

Also, the requisite service period at the grant date of performance awards is estimated based on the probability of the period of time it will take an agent to meet the performance metric.

The Company estimates the share-based liability based on estimated performance probabilities using the Company’s most recent estimates on probable achievement of the performance measures.

Also, the requisite service period at the grant date of performance awards is estimated based on the probable amount of time it will take to meet the performance metric.

The value of the stock award is amortized over this period and recognized as stock-based compensation expense starting on the grant date.

If factors change causing different assumptions to be made in future periods, estimated compensation expense may differ significantly from that recorded in the current period.

See Note 10 – Stockholders’ Equity to the consolidated financial statements

included elsewhere in this Annual Report, for more information regarding the assumptions used in estimating the fair value of our awards.

See Note 9 – Stockholders’ Equity to the consolidated financial statements included elsewhere in this Annual Report, for more information regarding the assumptions used in estimating the fair value of the Company’s awards.

Revenue recognition

The Company generates substantially all of its revenue from North American Realty and International Realty and generates a de minimis portion of its revenues from other affiliated professional services.

The Company generates a substantial portion of its revenue from its North American Realty and International Realty segments and generates a de minimis portion of its revenues from its Other Affiliated Services segment.

North American Realty and International Realty

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The Company, as principal, satisfies its obligation upon the closing of a real estate transaction.

As principal and upon satisfaction of our obligation, the Company recognizes revenue in the gross amount of consideration to which we expect to be entitled.

As principal and upon satisfaction of the Company’s obligation, the Company recognizes revenue in the gross amount of consideration to which the Company expects to be entitled.

Revenue is derived from assisting homebuyers and sellers in listing, marketing, selling and finding real estate.

Commissions earned on real estate transactions are recognized at the completion of a real estate transaction once we have satisfied our performance obligation.

Commissions earned on real estate transactions are recognized at the completion of a real estate transaction once the Company has satisfied its performance obligation.

Agent-related fees are currently recorded as a reduction to commissions and other agent-related costs.

At each reporting period, we estimate and accrue revenue for closed transactions for which we are entitled to but have not yet received the closing documents due to timing of when a transaction settles.

The accrual for estimated revenue was immaterial for the years ended December 31, 2024 and 2023.

At each reporting period, the Company estimates and accrues revenue for closed transactions for which it is entitled to, but have not yet received, a commission due to those transactions settling after the reporting period.

The accrual for this estimated revenue was immaterial for the years ended December 31, 2025 and 2024.

Business combinations

The Company accounts for business combinations using the acquisition method of accounting, under which the consideration for the acquisition is allocated to the assets acquired and liabilities assumed.

The Company recognizes identifiable assets acquired and liabilities assumed at the fair values as of the acquisition date.

Acquisition-related costs, such as due diligence, legal and accounting fees, are expensed as incurred and not considered in determining the fair value of the acquired assets.

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates and market factors.

These assumptions and estimates include projected revenues and income growth rates, terminal growth rates, competitive and consumer trends, market-based discount rates and other market factors.

Significant assumptions used in determining the allocation of fair value include the following valuation techniques:

the cost approach, the income approach and the market approach, which are determined based on cash flow projections and related discount rates, industry indices, market prices regarding replacement cost and comparable market transactions.

At the acquisition date, the Company recognizes the identifiable acquired assets, liabilities assumed and contingent liabilities (identifiable net assets) of the acquired company on the basis of fair value.

Recognized assets and liabilities assumed may be adjusted during a maximum of one year from the acquisition date (the “measurement period”), depending on new information obtained about the facts and circumstances in existence at the acquisition date.

If current expectations of future growth rates are not met or market factors outside of our control change significantly, then our goodwill or intangible assets may become impaired.

Additionally, as goodwill and intangible assets associated with recently acquired businesses are recorded on the balance sheet at their estimated acquisition date fair values, those amounts are more susceptible to impairment risk if business operating results or macroeconomic conditions deteriorate.

Our growth strategy is primarily driven by organic initiatives;

however, we regularly evaluate strategic acquisitions, partnerships, and other transactions that may accelerate our objectives, expand our capabilities, or create long-term shareholder value

Fair value determinations require significant judgment and are sensitive to assumptions about revenue and income growth, terminal values, discount rates, industry indices, and market transactions.

The Company uses cost, income, and market approaches in assigning values.

Identifiable net assets, including contingent liabilities, are recognized at fair value at the acquisition date and may be adjusted within a one-year measurement period based on new information about conditions at that time.

Goodwill and intangibles recorded at acquisition-date fair values are subject to impairment risk if expected growth rates are not achieved or if market or macroeconomic conditions deteriorate.

We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities.

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Our assumptions, judgments, and estimates relative to the value of our deferred tax assets take into account predictions of the amount and category of future taxable income.

As of December 31, 2024, based on our assessment of the realizability of the net deferred tax assets, we reached the conclusion that some of our net deferred tax assets will most likely not be fully realized and therefore a valuation allowance of $0.02 million was recorded.

As of December 31, 2025, based on our assessment of the realizability of the net deferred tax assets, we reached the conclusion that some of our net deferred tax assets will most likely not be fully realized and therefore a total valuation allowance of $0.5 million was recorded.

Although management believes that the judgment and estimates involved are reasonable and that the necessary provisions related to income taxes have been recorded, changes in circumstances or unexpected events could adversely affect our financial position, results of operations, and cash flows.

See Note 12 – Income Taxes to the consolidated financial statements included elsewhere in this Annual Report for further information related to our income tax positions.

We recognize expenses for legal claims when payments associated with the claims become probable and can be reasonably estimated.

Actual costs of resolving legal claims could have a material adverse impact on our results of operations and cash flow.

While the currently pending derivative litigation presents various reasonably possible outcomes, the financial impact(s) of such litigation is not presently estimable.

Separately, the currently pending US and Canadian antitrust litigation presents various reasonably possible outcomes;

however, we have accrued $34.0 million as of December 31, 2024, to reflect the terms of the US Hooper Settlement, as the loss is deemed probable and reasonably estimable under ASC 450.

For the Canadian antitrust litigation, no accrual has been made as a loss is not probable, and a reasonable estimate cannot yet be determined.

See Note 14 – Commitments and Contingencies to the consolidated financial statements included elsewhere in this Annual Report for further information related to our litigation .

The Company is subject to various legal proceedings and claims that arise in the ordinary course of business, the outcomes of which are inherently uncertain.

The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant judgment.

Resolution of legal matters in a manner inconsistent with management’s expectations could have a material impact on the Company’s financial condition and operating results.

See Note 13 – Commitments and Contingencies to the consolidated financial statements included elsewhere in this Annual Report for further information related to the Company’s litigation .

GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S.

GAAP, we use Adjusted EBITDA and Adjusted Segment EBITDA, non-U.S.

GAAP, we use consolidated adjusted EBITDA and segment adjusted EBITDA, non-U.S.

GAAP financial measures, to understand and evaluate our core operating performance.

These non-GAAP financial measure, which may be different than similarly titled measures used by other companies, is presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S.

These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S.

We define the non-U.S.

GAAP financial measure of Consolidated Adjusted EBITDA to mean net income, excluding other income (expense), income tax benefit (expense), depreciation, amortization, impairment charges, stock-based compensation expense and stock option expense.

Adjusted Segment EBITDA is defined as operating profit plus depreciation and amortization and stock-based compensation expenses, impairment expense and litigation contingency expense.

We believe that Consolidated Adjusted EBITDA and Adjusted Segment EBITDA provides useful information about our financial performance, enhances the overall understanding of our past performance and future prospects and allows for greater transparency with respect to a key metric used by our management for financial and operational decision-making.

We believe that Adjusted Segment EBITDA helps identify underlying trends in our business that otherwise could be masked by the effect of the expenses that we exclude in Adjusted Segment EBITDA.

GAAP financial measure of consolidated adjusted EBITDA to mean net income, excluding other income (expense), income tax benefit (expense), depreciation, amortization, impairment charges, stock-based compensation expense and stock option expense and other items that are not core to the operating activities of the Company.

Segment adjusted EBITDA is defined as net income before depreciation and amortization, interest expense, income taxes, stock compensation expense, stock option expense, and other items that are not core to the operating activities of the Company.

We believe that consolidated adjusted EBITDA and segment adjusted EBITDA provides useful information about our financial performance, enhances the overall understanding of our past performance and future prospects and allows for greater transparency with respect to a key metric used by our management for financial and operational decision-making.

We believe that segment adjusted EBITDA helps identify underlying trends in our business that otherwise could be masked by the effect of the expenses that we exclude in segment adjusted EBITDA.

In particular, we believe the exclusion of stock and stock option expenses provides a useful supplemental measure in evaluating the performance of our underlying operations and provides better transparency into our results of operations.

We are presenting the non-U.S.

GAAP measures of Adjusted EBITDA and Adjusted Segment EBITDA to assist investors in seeing our financial performance through the eyes of management and because we believe these measures provide additional tools for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.

Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with U.S.

There are a number of limitations related to the use of Adjusted EBITDA and Adjusted Segment EBITDA compared to net income, the closest comparable U.S.

GAAP measures of consolidated adjusted EBITDA and segment adjusted EBITDA to assist investors in seeing our financial performance through the eyes of management and because we believe these measures provide additional tools for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.

Consolidated adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with U.S.

There are several limitations related to the use of consolidated adjusted EBITDA and segment adjusted EBITDA compared to net income, the closest comparable U.S.

GAAP measure.

Some of these limitations are:

● Adjusted EBITDA and Adjusted Segment EBITDA exclude stock-based compensation expense related to our agent growth incentive program and stock option expense, which have been and will continue to be for the foreseeable future, significant recurring expenses in our business and an important part of our compensation strategy;

● Adjusted EBITDA and Adjusted Segment EBITDA exclude certain recurring, non-cash charges such as depreciation of fixed assets, amortization of intangible assets and impairment charges related to these long-lived assets and, although these are non-cash charges, the assets being depreciated, amortized, or impaired may have to be replaced in the future.

The following tables present a reconciliation of Adjusted EBITDA, the most comparable U.S.

● Consolidated adjusted EBITDA and segment adjusted EBITDA exclude stock-based compensation expense related to our agent growth incentive program and stock option expense, which have been and will continue to be for the foreseeable future, significant recurring expenses in our business and an important part of our compensation strategy;

● Consolidated adjusted EBITDA and segment adjusted EBITDA exclude certain recurring, non-cash charges such as depreciation of fixed assets, amortization of intangible assets and impairment charges related to these long-lived assets and, although these are non-cash charges, the assets being depreciated, amortized, or impaired may have to be replaced in the future.

The following table presents a reconciliation of consolidated adjusted EBITDA to the most comparable U.S.

GAAP financial measure, for each of the periods presented:

Year Ended December 31,

Net (loss) income from continuing operations

Net income (loss) from continuing operations

Total other (income) expense, net

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Litigation contingency

Stock compensation expense (1)

Stock-based compensation expense (1)

Stock option expense

Adjusted EBITDA

Consolidated adjusted EBITDA

(1) This includes agent growth incentive stock compensation expense and stock compensation expense related to business acquisitions.

The primary driver for the increase in Adjusted EBITDA was increased revenues, partially offset by increased commissions and other agent-related expenses and slightly higher general and administrative expenses.

The primary driver for the decrease in consolidated adjusted EBITDA was a decrease in gross profit, primarily driven by increased agent capping as well as increased operating costs including employee-related, technology and legal expenses, partially offset by increased revenues.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis