Item 8. Financial Statements and Supplementary Data
Item 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index to Consolidated Financial Statements
Page
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 )
31
Consolidated Balance Sheets
33
Consolidated Statements of Comprehensive Income (Loss)
34
Consolidated Statements of Stockholders’ Equity
35
Consolidated Statements of Cash Flows
36
Notes to Consolidated Financial Statements
37
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REPORT OF INDEPENDENT REGIS TERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of eXp World Holdings, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of eXp World Holdings, Inc. and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of comprehensive income (loss), stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 24, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Commissions and Other Agent-Related Costs – Sustainable Revenue Share Plan expenses – Refer to Note 2 to the financial statements
The Company maintains a revenue share program which allows agents and brokers to earn additional income from real estate transactions closed by agents they have attracted to the Company. Agents are eligible for revenue share based on defined qualification requirements. These additional commissions are funded from the Company’s portion of transaction commissions and are included within commissions and other agent-related costs.
We identified the revenue share program as a critical audit matter because the plan has a complex multi-tiered compensation structure involving highly automated system calculations to determine the commissions paid to agents and brokers. This required an increased extent of audit effort to audit and evaluate the accuracy of commissions paid under the revenue share program.
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How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the testing of the accuracy and completeness of expenses under the revenue share program included the following, among others:
● We tested the effectiveness of controls over the revenue share expenses, including management’s controls over the calculation of commission under the revenue share program.
● With the assistance of our IT specialists, we:
o Identified the significant system used to process revenue share transactions and tested the general IT controls over the system, including testing of user access controls, change management controls, and IT operations controls.
o Performed testing of automated controls for the system calculation of revenue share and the system determination of number of agents attracted to the Company.
● We tested the amount of revenue share expense by developing an expectation of the amount based on a percentage of the Company’s portion of transaction commissions and comparing our expectation to the amount recorded by management.
● We selected samples of commissions paid to agents and brokers under the revenue share program and recalculated the commissions amount based on the terms of the respective independent contractor agreements.
● For the samples selected:
o We tested the mathematical accuracy of the recorded commission by recalculating the revenue share allocation in accordance with the independent contractor agreements and traced the underlying transactions to third party documents.
o We tested the accuracy and completeness of agent attributes attracted to the Company by reviewing independent contractor agreements and obtaining evidence that agents achieved the required sales transaction volume.
/s/ Deloitte & Touche LLP
San Francisco, California
February 24, 2026
We have served as the Company's auditor since 2019.
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EXP WORLD HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
December 31, 2025
December 31, 2024
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$ 124,245
$ 113,607
Restricted cash
57,218
54,981
Accounts receivable, net of allowance for credit losses of $ 2,690 and $ 1,589 , respectively
108,838
87,692
Prepaids and other assets
14,567
11,692
TOTAL CURRENT ASSETS
304,868
267,972
Property and equipment, net
14,314
11,615
Other noncurrent assets
23,495
11,679
Intangible assets, net
4,421
6,456
Deferred tax assets, net
77,510
75,774
Goodwill
17,872
17,226
TOTAL ASSETS
$ 442,480
$ 390,722
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable
$ 14,613
$ 10,478
Customer deposits
57,204
55,660
Accrued expenses
108,208
85,661
Litigation contingency
17,000
34,000
Other current liabilities
2,676
54
TOTAL CURRENT LIABILITIES
199,701
185,853
TOTAL LIABILITIES
199,701
185,853
EQUITY
Common Stock, $ 0.00001 par value 900,000,000 shares authorized; 207,785,762 issued and 161,049,979 outstanding at December 31, 2025; 195,028,207 issued and 154,133,385 outstanding at December 31, 2024
2
2
Additional paid-in capital
1,105,434
962,758
Treasury stock, at cost: 46,735,783 and 40,894,822 shares held December 31, 2025 and December 31, 2024, respectively
( 742,879 )
( 686,680 )
Accumulated earnings (deficit)
( 121,622 )
( 68,135 )
Accumulated other comprehensive income (loss)
1,844
( 3,076 )
TOTAL EQUITY
242,779
204,869
TOTAL LIABILITIES AND EQUITY
$ 442,480
$ 390,722
The accompanying notes are an integral part of these consolidated financial statements.
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EXP WORLD HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands, except share amounts and per share data)
Year Ended December 31,
2025
2024
2023
Revenues
$ 4,772,311
$ 4,567,672
$ 4,273,821
Commissions and other agent-related costs
4,438,733
4,225,277
3,953,897
Gross profit
333,578
342,395
319,924
Operating expenses
General and administrative expenses
274,871
252,369
247,799
Technology and development expenses
69,618
58,182
59,547
Sales and marketing expenses
10,555
11,908
12,056
Impairment expense
-
4,930
-
Litigation contingency
-
34,000
-
Total operating expenses
355,044
361,389
319,402
Operating income (loss)
( 21,466 )
( 18,994 )
522
Other (income) expense
Other (income) expense, net
( 1,513 )
( 4,445 )
( 4,383 )
Equity in (income) losses of unconsolidated affiliates
281
1,168
1,388
Other (income) expense, net
( 1,232 )
( 3,277 )
( 2,995 )
Income (loss) before income tax expense
( 20,234 )
( 15,717 )
3,517
Income tax (benefit) expense
2,480
1,071
( 16 )
Net income (loss) from continuing operations
( 22,714 )
( 16,788 )
3,533
Net income (loss) from discontinued operations
-
( 4,479 )
( 12,506 )
Net income (loss)
($ 22,714 )
($ 21,267 )
($ 8,973 )
Earnings (loss) per share
Basic, net income (loss) from continuing operations
($ 0.14 )
($ 0.11 )
$ 0.02
Basic, net income (loss) from discontinued operations
$ -
($ 0.03 )
($ 0.08 )
Basic, net income (loss)
($ 0.14 )
($ 0.14 )
($ 0.06 )
Diluted, net income (loss) from continuing operations
($ 0.14 )
($ 0.11 )
$ 0.02
Diluted, net income (loss) from discontinued operations
$ -
($ 0.03 )
($ 0.08 )
Diluted, net income (loss)
($ 0.14 )
($ 0.14 )
($ 0.06 )
Weighted average shares outstanding
Basic
156,879,412
153,684,907
153,232,129
Diluted
156,879,412
153,684,907
156,773,528
Comprehensive income (loss):
Net income (loss)
($ 22,714 )
($ 21,267 )
($ 8,973 )
Other comprehensive income (loss):
Foreign currency translation gain (loss), net of tax
4,920
( 3,408 )
96
Comprehensive income (loss)
($ 17,794 )
($ 24,675 )
($ 8,877 )
The accompanying notes are an integral part of these consolidated financial statements.
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EXP WORLD HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
Year Ended December 31,
2025
2024
2023
Common stock:
Balance, beginning of period
$ 2
$ 2
$ 2
Balance, end of period
2
2
2
Treasury stock:
Balance, beginning of period
( 686,680 )
( 545,559 )
( 385,010 )
Repurchases of common stock
( 56,199 )
( 141,121 )
( 160,549 )
Balance, end of period
( 742,879 )
( 686,680 )
( 545,559 )
Additional paid-in capital:
Balance, beginning of period
962,758
804,833
611,872
Shares issued for stock options exercised
434
2,012
4,980
Agent growth incentive stock-based compensation
37,627
36,675
41,995
Agent equity stock-based compensation
98,149
111,278
135,226
Stock option compensation
6,466
7,960
10,760
Balance, end of period
1,105,434
962,758
804,833
Accumulated earnings (deficit):
Balance, beginning of period
( 68,135 )
( 16,769 )
20,723
Net income (loss)
( 22,714 )
( 21,267 )
( 8,973 )
Dividends declared and paid ($ 0.05 per share of common stock)
( 30,773 )
( 30,099 )
( 28,519 )
Balance, end of period
( 121,622 )
( 68,135 )
( 16,769 )
Accumulated other comprehensive income (loss):
Balance, beginning of period
( 3,076 )
332
236
Foreign currency translation gain (loss)
4,920
( 3,408 )
96
Balance, end of period
1,844
( 3,076 )
332
Noncontrolling interest:
Balance, beginning of period
-
1,169
1,169
Transactions with noncontrolling interests
-
( 1,169 )
-
Balance, end of period
-
-
1,169
Total equity
$ 242,779
$ 204,869
$ 244,008
The accompanying notes are an integral part of these consolidated financial statements.
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EXP WORLD HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended December 31,
2025
2024
2023
OPERATING ACTIVITIES
Net income (loss)
($ 22,714 )
($ 21,267 )
($ 8,973 )
Reconciliation of net income (loss) to net cash provided by operating activities:
Depreciation expense
6,870
7,835
8,352
Amortization expense - intangible assets
2,692
2,454
2,540
Impairment expense
-
4,930
9,203
Loss on disposition of business
-
266
472
Allowance for credit losses on receivables/bad debt on receivables
1,101
( 615 )
( 1,711 )
Equity in loss of unconsolidated affiliates
281
1,168
1,388
Agent growth incentive stock-based compensation expense
38,364
37,265
43,178
Stock option compensation
6,466
7,975
10,736
Agent equity stock-based compensation expense
98,149
111,278
135,226
Deferred income taxes, net
( 1,736 )
( 6,521 )
( 2,666 )
Changes in operating assets and liabilities:
Accounts receivable
( 21,098 )
( 1,704 )
3,474
Prepaids and other assets
( 2,875 )
3,041
( 1,263 )
Customer deposits
1,544
11,110
6,761
Accounts payable
4,135
1,690
( 1,491 )
Accrued expenses
21,810
( 1,445 )
8,424
Long term payable
-
-
( 4,677 )
Litigation contingency
( 17,000 )
34,000
-
Other operating activities
2,622
54
158
NET CASH PROVIDED BY OPERATING ACTIVITIES
118,611
191,514
209,131
INVESTING ACTIVITIES
Purchases of property and equipment
( 9,569 )
( 6,483 )
( 5,363 )
Purchase of business
-
( 6,150 )
-
Proceeds from sale of business
-
-
330
Investments in unconsolidated affiliates
( 13,246 )
( 5,447 )
( 5,876 )
Capitalized software development costs in intangible assets
( 657 )
( 1,390 )
( 2,594 )
NET CASH USED IN INVESTING ACTIVITIES
( 23,472 )
( 19,470 )
( 13,503 )
FINANCING ACTIVITIES
Repurchase of common stock
( 56,199 )
( 141,121 )
( 160,550 )
Proceeds from exercise of options
434
2,012
4,980
Transactions with noncontrolling interests
-
( 1,169 )
-
Dividends declared and paid
( 30,773 )
( 30,099 )
( 28,519 )
NET CASH USED IN FINANCING ACTIVITIES
( 86,538 )
( 170,377 )
( 184,089 )
Effect of changes in exchange rates on cash, cash equivalents and restricted cash
4,274
( 2,972 )
( 38 )
Net change in cash, cash equivalents and restricted cash
12,875
( 1,305 )
11,501
Cash, cash equivalents and restricted cash, beginning balance
168,588
169,893
159,383
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ENDING BALANCE
$ 181,463
$ 168,588
$ 170,884
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash paid for income taxes
4,597
2,694
2,731
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Termination of lease obligation - operating lease
-
-
859
Contingent consideration for disposition of business
-
-
1,209
Property, plant and equipment increase due to transfer of right-of-use lease asset
-
-
1,100
Property and equipment purchases in accounts payable
-
-
63
The accompanying notes are an integral part of these consolidated financial statements.
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eXp World Holdings, Inc.
Notes to Consolidated Financial Statements
(Amounts in thousands, except share and per share amounts, unless otherwise noted)
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
eXp World Holdings, Inc. (the “Company” or “eXp”) was incorporated in Delaware on July 30, 2008. The Company operates a cloud-based real estate brokerage and related services supporting agents, brokers, and entrepreneurs across North America and international markets.
The accompanying consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), expressed in U.S. dollars, and the Company’s fiscal year ends on December 31. The preparation of these consolidated financial statements and accompanying notes in conformity with U.S. GAAP requires the use of management estimates.
The Company reports results through three segments: North American Realty, International Realty, and Other Affiliated Services (see Note 10 – Segment Information to the consolidated financial statements included elsewhere in this Annual Report).
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of consolidation
The consolidated financial statements include the accounts of eXp World Holdings, Inc., its wholly-owned subsidiaries, and entities in which the Company has a variable interest of which the Company is the primary beneficiary. If the Company has a variable interest in an entity but it is not the primary beneficiary of the entity or does not exercise control over the operations and has less than 50% ownership, it will use the equity or cost method of accounting for investments. We hold investments in certain equity securities that do not have readily determinable fair values and for which we do not exercise significant influence. These investments qualify for and are accounted for using the measurement alternative under Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 321, Investments – Equity Securities (“ASC 321”).
Joint ventures
A joint venture is a contractual arrangement whereby the Company and other parties undertake an economic activity through a jointly controlled entity. Joint control exists when strategic, financial and operating policy decisions relating to the activities require the unanimous consent of the parties sharing control. Joint ventures are accounted for using the equity method and are recognized initially at cost. Joint ventures are typically included in the Other Affiliated Services unless the joint venture specifically supports one of the other reportable segments.
Investments in Equity Securities
We hold investments in certain equity securities that do not have readily determinable fair values and for which we do not exercise significant influence. These investments qualify for and are accounted for using the measurement alternative under ASC 321 .
Use of estimates
Preparing financial statements under U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures. Key areas requiring estimates include credit losses, legal contingencies, income taxes, revenue recognition, stock-based compensation, goodwill, and deferred tax assets.
Management bases these estimates on current facts, historical experience, and other reasonable factors. Actual results may differ materially and adversely from these estimates, which could affect future results of operations.
Reclassifications
When necessary, the Company will reclassify certain amounts in prior period financial statements to conform to the current period’s presentation. The Company maintains a consistent presentation across all periods presented.
Cash and cash equivalents
Cash and cash equivalents include cash on hand, money market instruments and all other highly liquid investments purchased with an original or remaining maturity of three months or less at the date of acquisition.
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Restricted cash
Restricted cash represents amounts held in escrow by the Company’s brokers and agents on behalf of real estate buyers. These amounts are recorded as customer deposit liabilities until released, at which time the liability is reduced. A reconciliation of cash, cash equivalents, and restricted cash to the amounts presented in the statement of cash flows is provided in the following table.
December 31, 2025
December 31, 2024
Cash and cash equivalents
$ 124,245
$ 113,607
Restricted cash
57,218
54,981
Total cash, cash equivalents, and restricted cash
$ 181,463
$ 168,588
Accounts receivable and allowance for expected credit losses
The Company evaluates expected credit losses using an aging schedule and records an allowance when amounts are determined to be uncollectible.
As of December 31, 2025 and 2024, the Company recognized expected credit losses of $ 82 and $ 34 , respectively.
Foreign currency translation
The Company’s functional reporting currency is the U.S. dollar. The functional currency of each foreign subsidiary is its local currency, with monetary assets and liabilities translated at period-end exchange rates and non-monetary items at historical rates. Revenues and expenses are translated at average monthly rates. Translation gains and losses are included in other comprehensive income (loss). The Company does not use hedging instruments to manage foreign currency risk.
Fixed assets
Fixed assets are recorded at cost and depreciated on a straight-line basis over estimated useful lives, generally three to five years for computer hardware and software and five to seven years for furniture, fixtures, and equipment. Maintenance and repairs are expensed as incurred, while expenditures that extend useful life or improve functionality are capitalized. The Company also capitalizes eligible costs related to the development of internal-use software, including upgrades and enhancements.
Software development costs
The Company capitalizes software development costs related to products to be sold, leased, or marketed to external users and internal-use software.
Impairment of long-lived assets
The Company reviews long-lived assets for impairment when events or changes in circumstances indicate that carrying amounts may not be recoverable. If the expected undiscounted cash flows are less than the carrying value, the asset is written down to fair value.
Stock-based compensation
Stock-based compensation is measured at grant date fair value and recognized on a straight-line basis over the requisite service period, net of forfeitures. Awards with performance conditions are recognized based on the probable outcome of those conditions.
Revenue recognition
The Company generates a substantial portion of its revenue from North American Realty and International Realty segments and generates a de minimis portion of its revenues from its Other Affiliated Services segment. The Company does not have contracts with customers that provide variable consideration.
North American Realty and International Realty
The Company serves as a licensed broker in the areas in which it operates for the purpose of processing residential real estate transactions. The Company is contractually obligated to provide services for the fulfillment of transfers of residential real estate between buyers and sellers. The Company provides these services itself and controls the services necessary to legally transfer residential real estate. Correspondingly, the Company is defined as the principal. The Company, as principal, satisfies its obligation upon the closing of a residential real estate transaction. As principal and upon satisfaction of the performance obligation, the Company recognizes revenue in the gross amount of consideration to which the Company expects to be entitled. The Company estimates and accrues revenue to which it is entitled to for closed transactions but has yet to receive all the necessary closing documents.
Revenue is derived from assisting homebuyers and sellers in listing, marketing, selling and finding residential real estate. Commissions earned on real estate transactions are recognized at the completion of a residential real estate transaction
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once the Company has satisfied the performance obligation. Agent-related fees charged by the Company are recorded as a reduction to commissions and other agent-related costs.
Software Subscription and Professional Services
Subscription revenue is derived from fees from customers to access the Company’s virtual reality software platform. The terms of subscriptions do not provide customers the right to take possession of the software. Subscription revenue is generally recognized ratably over the contract term.
Professional services revenue is derived from implementation and consulting services. Professional services revenue is typically recognized over time as the services are rendered, using an efforts-expended (labor hours) input method.
Disaggregated revenue
The Company primarily operates as a real estate brokerage firm and discloses disaggregated revenue from services to customers across its three reportable segments to provide additional insight into the future recognition of revenue and cash flows. The vast majority of the Company’s revenue is derived from providing real estate brokerage services to purchasers and sellers of homes in the U.S., Canada and internationally. See Note 10 – Segment Information for details regarding segment and geographic information.
Management provides disaggregation of revenue from its services to customers to provide additional insight into the future recognition of revenue and cash flows.
Sustainable Revenue Share Plan expenses
The Company maintains a revenue share program that allows agents and brokers to earn additional income from real estate transactions closed by agents they have attracted to the Company, subject to defined qualification requirements. Payments under the plan are funded from the Company’s portion of transaction commissions and are recorded as commissions and other agent-related costs in the consolidated statements of comprehensive income (loss).
Advertising and marketing costs
Advertising and marketing costs are generally expensed in the period incurred. Advertising and marketing expenses are included in the sales and marketing expense line item on the accompanying consolidated statements of comprehensive income (loss). For the years ended December 31, 2025, 2024 and 2023, the Company incurred advertising and marketing expenses of $ 10,555 , $ 11,908 and $ 12,056 , respectively.
Income taxes
The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for temporary differences between financial reporting and tax basis of assets and liabilities, measured using enacted tax rates expected to apply when the differences reverse. Deferred tax assets are recorded when realization is considered more likely than not, and a valuation allowance is established when necessary. Uncertain tax positions are recognized when it is more likely than not that the position will be sustained, measured as the largest amount of benefit more than 50% likely to be realized upon settlement.
Comprehensive income (loss)
The Company’s only components of comprehensive income (loss) are net income (loss) and foreign currency translation adjustments.
Accounting pronouncements
The Company has adopted all new accounting standards currently in effect and does not believe that any recently issued standards will have a material impact on its financial statements.
In July 2025, the Financial Accounting Standards Board (“FASB”) issued ASU 2025-05 , which simplifies the application of the Current Expected Credit Loss (“CECL”) model for short-term assets. The update provides a practical expedient allowing entities to assume that current economic conditions at the balance sheet date will remain constant over the remaining short life of accounts receivable and contract assets, rather than requiring complex macroeconomic forecasting. This standard is effective for the Company beginning January 1, 2026, with early adoption permitted. The adoption of this standard is expected to streamline the financial reporting process and eliminate the need for complex macroeconomic modeling on its short-term commission-related receivables.
In September 2025, the FASB issued ASU 2025-06 to modernize software cost accounting. The amendments remove the traditional project stages to better align with agile and iterative development cycles. Capitalization now begins when management authorizes the project and it is "probable to complete." The standard is effective for the Company for fiscal years beginning after
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December 15, 2027, with early adoption permitted. The Company anticipates that the adoption of this standard will better align its accounting for internal-use software with its agile development environment and while it is still evaluating the full impact, the update is expected to increase the level of judgment required in determining the commencement of capitalization and may result in a greater portion of development costs being expensed in the earlier stages of its technology projects.
In December 2025, the FASB issued ASU 2025-11 to improve the navigability of interim financial statement disclosures. The update provides a centralized list of required interim disclosures and introduces disclosure principles requiring entities to report significant events occurring since the previous year end that have a material impact. While the ASU clarifies what must be disclosed, it is not intended to significantly change existing reporting volume for SEC filers. The standard is effective for the Company’s interim periods beginning January 1, 2028, and early adoption is permitted. As a result, the Company expects the adoption this standard to enhance the consistency and navigability of its quarterly filings through the application of the new centralized disclosure framework, though it does not anticipate that the adoption of this update will have a material impact on its consolidated financial position or results of operations.
In December 2025, the FASB issued ASU 2025-12 as part of its ongoing project to clarify and correct various sections of the Accounting Standards Codification. Key improvements in this update include clarifications on the calculation of diluted earnings per share (“EPS”) during loss periods and the accounting for treasury stock retirements. The amendments are effective for the Company beginning January 1, 2027, and may be applied either prospectively or retrospectively depending on the specific issue within the update. The Company is currently evaluating the impact of these clarifications on its reporting processes but expects that the adoption of this standard will primarily result in refined calculations of diluted EPS during periods of net loss and provide a more standardized approach to its treasury stock accounting without significantly altering its overall financial position.
3. DISCONTINUED OPERATIONS
In 2023, In accordance with ASC 205-20, the Company determined that Virbela was no longer continuing operations, and the results of the Virbela business have been presented as discontinued operations in the consolidated statements of comprehensive income (loss) and, as such, have been excluded from continuing operations. In the fourth quarter of 2024, the Company completed the disposition of Virbela. The following table presents the information for Virbela’s operations for the years ended December 31, 2024 and 2023 (in thousands).
INCOME STATEMENT OF DISCONTINUED OPERATIONS
Year Ended December 31,
2025
2024
2023
Revenues
$ -
$ 652
$ 7,284
Operating expenses
Cost of revenue
-
3,083
3,156
General and administrative expenses
-
3,139
10,804
Technology and development expenses
-
322
1,003
Sales and marketing expenses
-
( 2 )
100
Impairment expense
-
-
9,203
Total operating expenses
-
6,542
24,266
Operating income (loss)
-
( 5,890 )
( 16,982 )
Other (income) expense
Other (income) expense, net
-
( 278 )
( 31 )
Total other (income) expense, net
-
( 278 )
( 31 )
Income (loss) before income tax expense
-
( 5,612 )
( 16,951 )
Income tax benefit (expense)
-
1,133
4,445
Net income (loss) from discontinued operations
$ -
($ 4,479 )
($ 12,506 )
4.
4. FAIR VALUE MEASUREMENT
The Company holds funds in a money market account, which are considered Level 1 assets. The Company values its money market funds at fair value on a recurring basis.
As of December 31, 2025 and 2024, the fair value of the Company’s money market funds was $ 12,397 and $ 38,344 , respectively.
The Company holds investments in equity securities without readily determinable fair values, accounted for under the measurement alternative in accordance with ASC 321 . As of December 31, 2025, the carrying value of these investments was $ 12,235 , reflecting an initial acquisition of $ 11,000 in the first quarter of 2025 and a subsequent capital contribution during the third and fourth quarter of 2025. There were no transfers between levels of the fair value hierarchy, and the Company held no Level 2 financial instruments during the periods presented.
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5. PREPAIDS AND OTHER ASSETS
Prepaids and other assets consisted of the following:
December 31, 2025
December 31, 2024
Prepaid expenses
$ 6,612
$ 7,817
Prepaid insurance
4,723
2,686
Other assets (includes inventory)
3,232
1,189
Total prepaid expenses
$ 14,567
$ 11,692
6. PROPERTY AND EQUIPMENT, NET
Property and equipment, net consisted of the following:
December 31, 2025
December 31, 2024
Computer hardware and software
$ 53,849
$ 44,079
Furniture, fixture, and equipment
2,206
2,205
Total depreciable property and equipment
56,055
46,284
Less: accumulated depreciation
( 42,184 )
( 35,262 )
Depreciable property and equipment, net
13,871
11,022
Assets under development
443
593
Property and equipment, net
$ 14,314
$ 11,615
For the years ended December 31, 2025, 2024 and 2023, depreciation expense was $ 6,870 , $ 7,835 and $ 8,352 , respectively.
7. GOODWILL AND INTANGIBLE ASSETS
Changes in the carrying amount of goodwill were:
December 31, 2025
December 31, 2024
Goodwill
$ 17,226
$ 16,982
Acquisitions
-
3,737
Impairments
-
( 2,386 )
Currency translation impact
646
( 1,107 )
Total goodwill
$ 17,872
$ 17,226
The Company performed its annual goodwill impairment testing in the fourth quarter of 2025 and 2024. In 2024, the Company determined that the goodwill associated with SUCCESS ® was impaired. The Company recognized goodwill impairment charge of $ 2,386 for the year ended December 31, 2024.
The Company has a risk of future impairment to the extent that individual reporting unit performance does not meet projections. Additionally, if current assumptions and estimates, including projected revenues and income growth rates, terminal growth rates, competitive and consumer trends, market-based discount rates and other market factors, are not met, or if valuation factors outside of the Company’s control change unfavorably, the estimated fair value of goodwill could be adversely affected, leading to a potential impairment in the future.
Definite-lived intangible assets were as follows:
December 31, 2025
Gross
Accumulated
Net Carrying
Amount
Amortization
Impairment
Amount
Trade name
$ 2,068
($ 1,262 )
$ -
$ 806
Existing technology
5,996
( 4,871 )
-
1,125
Non-competition agreements
476
( 368 )
-
108
Customer relationships
2,011
( 1,051 )
-
960
Licensing agreement
210
( 210 )
-
-
Intellectual property
1,453
( 31 )
-
1,422
Total intangible assets
$ 12,214
($ 7,793 )
$ -
$ 4,421
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December 31, 2024
Gross
Accumulated
Net Carrying
Amount
Amortization
Impairment
Amount
Trade name
$ 2,042
($ 943 )
$ -
$ 1,099
Existing technology
5,349
( 2,564 )
-
2,785
Non-competition agreements
461
( 272 )
-
189
Customer relationships
2,560
( 503 )
( 549 )
1,508
Licensing agreement
210
( 210 )
-
-
Intellectual property
3,448
( 578 )
( 1,995 )
875
Total intangible assets
$ 14,070
($ 5,070 )
($ 2,544 )
$ 6,456
For the years ended December 31, 2025, 2024 and 2023, amortization expense for definite-lived intangible assets was $ 2,692 , $ 2,454 , and $ 2,540 , respectively.
As part of the Company’s annual assessment, the Company also reviews the useful lives of its amortizable intangible assets and determines if there should be any change to the amortization period. In 2024, for amortizable intangible assets related to SUCCESS ® , the Company recognized an impairment loss related to the net book value of the customer lists of $ 549 and content of $ 1,995 .
In 2025, there was no impairment of goodwill or intangible assets , and there was no change to the useful lives of amortizable intangible assets.
8. ACCRUED EXPENSES
Accrued expenses consisted of the following:
December 31, 2025
December 31, 2024
Commissions payable
$ 73,474
$ 58,984
Payroll payable
7,635
7,619
Taxes payable
3,791
3,999
Stock liability awards
5,782
5,045
Other accrued expenses
17,526
10,014
$ 108,208
$ 85,661
9. STOCKHOLDERS’ EQUITY
The following table represents a reconciliation of the Company’s issued common stock shares for the periods presented:
Year Ended December 31,
2025
2024
2023
Common stock:
Balance, beginning of period
195,028,207
183,606,708
171,656,030
Shares issued for stock options exercised
82,936
380,919
832,993
Agent growth incentive stock-based compensation
2,802,114
1,787,280
2,219,881
Agent equity stock-based compensation
9,872,505
9,253,300
8,897,804
Balance, end of period
207,785,762
195,028,207
183,606,708
Dividends
The Company declared and paid dividends of $ 0.05 quarterly in 2025 and 2024. The Company declared and paid dividends of $ 0.045 in each of the first and second quarters of 2023, $ 0.05 in each of the third and fourth quarters of 2023. Dividends are declared at the discretion of the Board and are based on various factors, including the Company’s financial condition, results of operations, capital requirements, and market conditions. The total cash dividends paid during each of these years were funded from available cash and were recorded as reductions to accumulated earnings (deficit).
2024 Equity Incentive Plan
The eXp World Holdings, Inc. 2024 Equity Incentive Plan (the “2024 Plan”) is a stockholder-approved plan that provides for broad-based equity grants to service providers, including employees, directors, agents, and consultants, and permits the granting of restricted stock units (“RSUs”), stock grants, performance-based awards, stock options and stock appreciation rights. RSUs granted under the 2024 Plan generally vest over four years , based on continued services, and are settled upon vesting in shares of the Company’s common stock on a one-for-one basis. All RSUs granted under the 2024 Plan have dividend equivalent rights, which entitle holders of RSUs to the same dividend value per share as holders of common stock. A maximum of approximately 150 million shares were authorized for issuance pursuant to 2024 Plan awards at the time the plan was approved on May 13, 2024.
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The Company’s stockholder approved equity programs described below are administered under the 2024 Plan, beginning in September 2024. Prior to that time, the equity programs were administered under the eXp World Holdings, Inc. 2015 Equity Incentive Plan which has since terminated. The purpose of the 2024 Plan is to retain the services of valued employees, directors, officers, agents and consultants and to incentivize such persons to make contributions to the Company and motivate excellent performance.
2015 Equity Incentive Plan
The eXp World Holdings, Inc. 2015 Equity Incentive Plan, as amended and restated (the “2015 Plan”), is a stockholder-approved plan that provided for broad-based equity grants to service providers, including employees, directors, agents, and consultants. The 2015 Plan permitted the granting of the same types of equity awards with substantially the same terms as the 2024 Plan. In the third quarter of 2024, the Company terminated the authority to grant new awards under the 2015 Plan.
Agent Equity Program (“AEP”)
The Company provides agents and brokers the opportunity to elect to receive 5 % of commissions earned from each completed residential real estate transaction in the form of common stock of the Company at a discount recognized by the Company. If agents and brokers elect to receive portions of their commissions in common stock, they are entitled to receive the equivalent number of shares of common stock based on the fixed monetary value of the commission payable.
For the years ended December 31, 2025, 2024 and 2023, the Company issued 9,872,505 , 9,253,300 and 8,897,804 shares of common stock, respectively, to agents and brokers for $ 98,149 , $ 111,278 and $ 135,226 , respectively, net of discount, attributable to the AEP.
Agent Growth Incentive Program (“AGIP”)
The Company administers AGIP whereby agents and brokers become eligible to receive awards of the Company’s common stock through agent attraction and performance benchmarks. The incentive program encourages greater performance and awards agents with common stock based on achievement of performance milestones. Awards typically vest after performance benchmarks are reached and three years of subsequent service is provided to the Company. Share-based performance awards are based on a fixed-dollar amount of shares once performance metrics are achieved. As such, the awards are classified as liabilities until the number of share awards becomes fixed once the performance metric is achieved.
For the years ended December 31, 2025, 2024 and 2023, the Company’s stock compensation attributable to the AGIP was $ 37,222 , $ 36,998 and $ 43,178 , respectively. The amount of stock compensation attributable to liability classified awards was $ 2,736 , $ 2,251 and $ 3,832 for the years ended December 31, 2025, 2024 and 2023, respectively.
As of December 31, 2025, the total unrecognized compensation costs associated with these awards, where the performance metric has been achieved and the number of shares awarded are fixed, was $ 59,896 , which is expected to be recognized over a weighted-average period of approximately 2.02 years.
The following table illustrates changes in the Company’s stock compensation liability, included in accrued liabilities for the periods presented:
Amount
Balance, December 31, 2023
$ 5,000
Stock grant liability increase year to date
2,251
Stock grants reclassified from liability to equity year to date
( 2,206 )
Balance, December 31, 2024
$ 5,045
Stock grant liability increase year to date
2,736
Stock grants reclassified from liability to equity year to date
( 1,999 )
Balance, December 31, 2025
$ 5,782
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The following table illustrates the Company’s stock activity for the AGIP for stock awards where the performance metric has been achieved for the following periods:
Weighted Average
Grant Date
Shares
Fair Value
Balance, December 31, 2023
6,875,289
$ 17.80
Granted
4,472,988
12.22
Vested and issued
( 1,773,129 )
22.99
Forfeited
( 1,720,193 )
15.93
Balance, December 31, 2024
7,854,955
$ 13.80
Granted
5,490,988
10.06
Vested and issued
( 2,715,482 )
13.65
Forfeited
( 1,355,254 )
12.66
Balance, December 31, 2025
9,275,207
$ 11.74
Activity related to Other Restricted Stock Units (“RSUs”), which was previously included in the AGIP stock activity table for prior years, is now presented independently in the Other Restricted Stock Units section below.
Other Restricted Stock Units
RSUs may be granted to directors, officers, certain employees and consultants. Each RSU represents the right to receive one share of the Company’s common stock upon vesting, subject to time-based and/or performance-based restrictions. RSUs typically vest over a three-year period with equal and periodically graded vesting or cliff vesting, as applicable. The fair value of RSUs granted is determined based on the closing market price of the Company's common stock on the grant date. The total fair value of RSUs is recognized as stock-based compensation expense over the vesting period, with adjustments for estimated forfeitures.
For the years ended December 31, 2025, 2024 and 2023, the Company's stock compensation attributable to these RSUs was $ 1,142 , $ 267 and $ 0 , respectively .
As of December 31, 2025, the total unrecognized compensation costs associated with these RSUs was $ 2,877 , which is expected to be recognized over a weighted-average period of approximately 2.21 years.
The following table illustrates the Company’s RSU activity for the following periods:
Weighted Average
Grant Date
Shares
Fair Value
Balance, December 31, 2023
-
$ -
Granted
115,574
12.89
Vested and issued
( 14,151 )
12.06
Forfeited
-
-
Balance, December 31, 2024
101,423
$ 13.00
Granted
300,410
10.13
Vested and issued
( 86,632 )
11.02
Forfeited
( 20,508 )
12.34
Balance, December 31, 2025
294,693
$ 10.71
Stock Option Awards
Stock options are granted to directors, officers, certain employees and consultants with an exercise price equal to the fair market value of common stock on the grant date and the stock options expire 10 years from the date of grant. These options generally have time-based restrictions with equal and periodically graded vesting over a three-year period.
The fair value of the options issued is calculated using a Black-Scholes-Merton option-pricing model with the following assumptions:
2025
2024
2023
Expected term
5 years
5 years
5 - 6 years
Expected volatility
68.69 % - 74.72 %
73.51 % - 74.29 %
73.64 % - 76.78 %
Risk-free interest rate
3.54 % - 4.41 %
3.48 % - 4.61 %
3.28 % - 4.86 %
Dividend yield
1.76 % - 2.24 %
1.39 % - 1.99 %
0.72 % - 1.64 %
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The following table illustrates the Company’s stock option activity for the following periods:
Weighted
Average
Weighted
Remaining
Average
Contractual Term
Options
Exercise Price
Intrinsic Value
(Years)
Balance at December 31, 2023
6,198,544
$ 14.23
$ 3.62
7.29
Granted
1,012,111
11.74
-
9.19
Exercised
( 380,919 )
5.29
5.79
—
Forfeited
( 959,539 )
18.84
0.05
—
Expired
( 300,052 )
23.60
0.04
—
Balance at December 31, 2024
5,570,145
$ 13.09
$ 1.17
6.97
Granted
557,664
10.15
-
8.95
Exercised
( 82,936 )
5.22
5.34
—
Forfeited
( 763,475 )
14.39
0.08
—
Expired
( 118,165 )
14.23
0.02
—
Balance at December 31, 2025
5,163,233
$ 12.72
$ 0.36
6.14
Exercisable at December 31, 2025
3,798,468
$ 12.93
$ 0.50
5.27
Vested at December 31, 2025
3,798,468
$ 12.93
$ 0.50
5.27
Weighted
Average
Options
Exercise Price
Range of stock option exercise prices at December 31, 2025:
$ 0.01 - $ 10.00 (average remaining life - 4.52 years)
2,261,770
$ 8.91
$ 10.01 - $ 30.00 (average remaining life - 7.5 years)
2,678,741
$ 13.91
$ 30.01 - $ 60.00 (average remaining life - 5.4 years)
222,722
$ 38.14
The grant date fair value of options to purchase common stock is recorded as stock-based compensation over the vesting period. As of December 31, 2025, unrecognized compensation cost associated with the Company’s outstanding stock options was $ 7,811 , which is expected to be recognized over a weighted-average period of approximately 0.75 years.
Stock Repurchase Program
During 2025, the Company repurchased 5,840,961 shares of its common stock for $ 56.2 million. The Company’s share repurchase program does not obligate the Company to acquire a minimum amount of shares and it limits the Company’s aggregate repurchases to $ 1.0 billion. Under the programs, shares may be repurchased in privately negotiated or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. For accounting purposes, common stock repurchased under the stock repurchase programs is recorded based upon the trade date of the applicable trade. Such repurchased shares are held in treasury and are presented using the cost method. These shares are considered issued but not outstanding. The following table shows the changes in treasury stock shares for the periods presented:
Year Ended December 31,
2025
2024
2023
Treasury stock:
Balance, beginning of period
40,894,822
28,937,671
18,816,791
Repurchases of common stock
5,840,961
11,957,151
10,110,152
Forfeiture to treasury stock for acquisition
-
-
10,728
Balance, end of period
46,735,783
40,894,822
28,937,671
10. SEGMENT INFORMATION
Segment information aligns with how the Chief Operating Decision Maker (“CODM”), Glenn Sanford, Chief Executive Officer of eXp World Holdings, Inc., manages the business and allocates resources as three operating segments. The Company determines an operating segment if a component (i) engages in business activities from which it earns revenues and incurs expenses, (ii) has discrete financial information, and is (iii) regularly reviewed by the CODM. Once operating segments are identified, the Company performs a quantitative analysis of the current and historic revenues and profitability for each operating segment, together with a qualitative assessment to determine if operating segments have similar operating characteristics. The Company has three operating segments and three reportable segments.
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The CODM uses revenues, segment adjusted EBITDA, and operating income (loss) as key metrics to evaluate the operating and financial performance of a segment, identify trends affecting the segments, develop projections and make strategic business decisions. The CODM also regularly reviews commissions and other agent-related costs to assess segment performance. Commissions and other agent-related costs include sales commissions, revenue share and stock-based compensation paid to the Company’s agents. segment adjusted EBITDA for the reportable segments 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. The Company’s three reportable segments are as follows:
● North American Realty: includes real estate brokerage operations in the United States and Canada, as well as lead-generation and other real estate support services provided in North America.
● International Realty: includes real estate brokerage operations in all other international locations.
● Other Affiliated Services: includes SUCCESS ® Magazine and other ancillary ventures.
The Company also reports corporate expenses, as further detailed below, as “Corporate expenses and other” which include expenses incurred in connection with business development support provided to the agents as well as resources, including administrative, brokerage operations and legal functions.
All segments follow the same basis of presentation and accounting policies as those described in Note 2 – Summary of Significant Accounting Policies . The following table provides information about the Company’s reportable segments and a reconciliation of the total segment Revenues to consolidated Revenues. Financial information for the comparable prior periods presented have been revised to conform with the current year presentation.
Revenues
Year Ended December 31,
2025
2024
2023
North American Realty
$ 4,624,913
$ 4,478,293
$ 4,220,063
International Realty
146,930
88,146
53,931
Other Affiliated Services
2,873
6,105
4,802
Commissions reconciliation:
Segment eliminations
( 2,405 )
( 4,872 )
( 4,975 )
Consolidated revenues
$ 4,772,311
$ 4,567,672
$ 4,273,821
Commissions and other agent-related costs
Year Ended December 31,
2025
2024
2023
North American Realty
$ 4,315,316
$ 4,153,113
$ 3,910,851
International Realty
122,061
71,657
43,103
Other Affiliated Services
1,356
2,742
2,448
Commissions reconciliation:
Segment eliminations
-
( 2,235 )
( 2,505 )
Consolidated commissions and other agent-related costs
$ 4,438,733
$ 4,225,277
$ 3,953,897
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Adjusted EBITDA
Year Ended December 31,
2025
2024
2023
North American Realty
$ 59,753
$ 99,253
$ 91,101
International Realty
( 9,933 )
( 9,481 )
( 13,657 )
Other Affiliated Services
( 5,804 )
( 4,876 )
( 3,795 )
Corporate expenses and other
( 10,844 )
( 9,413 )
( 8,321 )
Consolidated adjusted EBITDA
$ 33,172
$ 75,483
$ 65,328
Income (loss) before income tax expense reconciliation:
Depreciation and amortization expense
9,562
10,289
10,892
Impairment expense
-
4,930
-
Litigation contingency
-
34,000
-
Stock-based compensation expense
38,610
37,285
43,178
Stock option expense
6,466
7,973
10,736
Other (income) expense, net
( 1,232 )
( 3,277 )
( 2,995 )
Consolidated income (loss) before income tax expense
($ 20,234 )
($ 15,717 )
$ 3,517
Operating Income (Loss)
Year Ended December 31,
2025
2024
2023
North American Realty
$ 9,322
$ 16,468
$ 33,388
International Realty
( 11,674 )
( 10,492 )
( 14,248 )
Other Affiliated Services
( 6,153 )
( 11,615 )
( 4,590 )
Segment Operating Income (Loss)
( 8,505 )
( 5,639 )
14,550
Corporate expenses and other
( 12,961 )
( 13,355 )
( 14,028 )
Consolidated Operating Income (Loss)
( 21,466 )
( 18,994 )
522
Goodwill
December 31, 2025
December 31, 2024
North American Realty
$ 17,872
$ 17,226
International Realty
-
-
Other Affiliated Services
-
-
Segment and consolidated total
17,872
17,226
Geographical information
For the years ended December 31, 2025, 2024 and 2023 approximately 13 %, 11 % and 9 %, respectively, of the Company’s total revenue was generated outside of the U.S. Long-lived assets held outside of the U.S. were 10 % and 17 % as of December 31, 2025 and 2024, respectively.
The Company’s CODM does not use segment assets to allocate resources or to assess the performance of the segments and therefore, total segment assets have not been disclosed.
11. EARNINGS PER SHARE
Basic earnings (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common stock outstanding during the year. Dilutive earnings per share is computed consistently with the basic computation while giving effect to all dilutive potential common shares and common share equivalents that were outstanding during the period. The Company uses the treasury stock method to reflect the potential dilutive effect of unvested stock awards and unexercised options.
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The following table sets forth the calculation of basic and diluted earnings per share attributable to common stock during the years presented:
Year Ended December 31,
2025
2024
2023
Numerator:
Net income (loss) from continuing operations
($ 22,714 )
($ 16,788 )
$ 3,533
Net income (loss) from discontinued operations
$ -
($ 4,479 )
($ 12,506 )
Net income (loss)
($ 22,714 )
($ 21,267 )
($ 8,973 )
Denominator:
Weighted average shares - basic
156,879,412
153,684,907
153,232,129
Dilutive effect of common stock equivalents
-
-
3,541,399
Weighted average shares - diluted
156,879,412
153,684,907
156,773,528
Earnings per share:
Net income (loss) from continuing operations per share - basic
($ 0.14 )
($ 0.11 )
$ 0.02
Net income (loss) from discontinued operations per share - basic
$ -
($ 0.03 )
($ 0.08 )
Net income (loss) per share - basic
($ 0.14 )
($ 0.14 )
($ 0.06 )
Net income (loss) from continuing operations per share - diluted
($ 0.14 )
($ 0.11 )
$ 0.02
Net income (loss) from discontinued operations per share - diluted
$ -
($ 0.03 )
($ 0.08 )
Net income (loss) per share - diluted
($ 0.14 )
($ 0.14 )
($ 0.06 )
For the years ended December 31, 2025, 2024 and 2023, total outstanding shares of common stock excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive were 3,419,590 , 3,698,061 and 820,376 , respectively.
12. INCOME TAXES
Provision for Income Taxes and Effective Tax Rate
The following table provides the components of income (loss) before provision for income taxes from continuing operations by domestic and foreign subsidiaries:
Year Ended December 31,
2025
2024
2023
Domestic
($ 31,404 )
($ 24,479 )
$ 431
Foreign
11,170
8,762
3,086
Total
($ 20,234 )
($ 15,717 )
$ 3,517
The components of the income tax (benefit) expense from continuing operations are as follows:
Year Ended December 31,
2025
2024
2023
Current:
Federal
($ 59 )
$ 408
$ 301
State
374
1,211
795
Foreign
3,576
3,060
1,789
Total current income tax provision
3,891
4,679
2,885
Deferred
Federal
( 1,709 )
( 2,277 )
( 1,137 )
State
( 458 )
( 573 )
( 903 )
Foreign
756
( 758 )
( 861 )
Total deferred income tax benefit
( 1,411 )
( 3,608 )
( 2,901 )
Total income tax (benefit) expense from continuing operations
$ 2,480
$ 1,071
($ 16 )
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The reconciliation of the provision for income tax (benefit) expense from continuing operations at the United States federal statutory rate compared to the Company's income tax (benefit) expense as reported is as follows, with reconciling items for all periods presented disaggregated by nature and jurisdiction in accordance with the retrospective adoption of ASU 2023-09, Improvements to Income Tax Disclosures , effective January 1, 2025:
Year Ended December 31,
2025
2024
2023
Amount
Percent
Amount
Percent
Amount
Percent
U.S. Federal Statutory Tax Rate
($ 4,249 )
21.00 %
($ 3,302 )
21.00 %
$ 739
21.00 %
State and Local Income Taxes, Net of Federal Effect (a)
137
( 0.68 )%
815
( 5.18 )%
558
15.87 %
Foreign Tax Effects
1,861
( 9.20 )%
951
( 6.05 )%
( 409 )
( 11.66 )%
Canada
Foreign Rate Differential
512
( 2.53 )%
327
( 2.08 )%
668
18.98 %
Stock Based Compensation
81
( 0.40 )%
149
( 0.95 )%
( 446 )
( 12.68 )%
Adjustment to Deferred Tax Assets
875
( 4.33 )%
( 17 )
0.11 %
157
4.46 %
Other
-
0.00 %
-
0.00 %
1
0.01 %
Other Foreign Jurisdictions
393
( 1.94 )%
492
( 3.13 )%
( 789 )
( 22.44 )%
Effect of Changes in Tax Laws or Rates
-
0.00 %
-
0.00 %
-
0.00 %
Effect of Cross-Border Tax
-
0.00 %
-
0.00 %
-
0.00 %
Tax Credits
431
( 2.13 )%
( 2,576 )
16.38 %
( 1,903 )
( 54.10 )%
Research and Development Tax Credit
431
( 2.13 )%
( 2,576 )
16.38 %
( 1,903 )
( 54.10 )%
Change of Valuation Allowance
-
0.00 %
-
0.00 %
-
0.00 %
Nontaxable or Nondeductible Items
4,077
( 20.15 )%
4,617
( 29.37 )%
( 373 )
( 10.61 )%
Fines/Penalties
345
( 1.70 )%
-
0.00 %
-
0.00 %
Non-deductible Legal Settlement
630
( 3.11 )%
-
0.00 %
-
0.00 %
Stock Compensation
3,305
( 16.34 )%
4,675
( 29.74 )%
( 375 )
( 10.66 )%
Other
( 203 )
1.00 %
( 58 )
0.37 %
2
0.05 %
Changes in Unrecognized Tax Benefits
217
( 1.07 )%
652
( 4.14 )%
475
13.53 %
Other
6
( 0.03 )%
( 86 )
0.55 %
897
25.50 %
Effective Tax Rate
2,480
( 12.26 )%
1,071
( 6.81 )%
( 16 )
( 0.47 )%
(a) State taxes in Texas and California made up the majority (greater than 50 percent) of the tax effect in this category
The following table provides the income taxes paid, net of refunds received, disaggregated by federal, state, and foreign jurisdictions in accordance with ASU 2023-09:
Year Ended December 31,
2025
2024
2023
Federal
$ 166
$ 608
$ -
State
947
401
831
Foreign
3,484
1,685
1,900
Total
$ 4,597
$ 2,694
$ 2,731
Income taxes paid (net of refunds) exceeded 5% of total income taxes paid (net of refunds) in the following jurisdictions:
Year Ended December 31,
2025
2024
2023
State
Texas
$ 322
$ 230
$ 390
Foreign
Canada
$ 2,990
$ 1,612
$ 1,887
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The Company has adjusted prior year amounts to remove amounts from discontinued operations.
Deferred tax assets and liabilities from continuing operations consist of the following for the periods presented:
December 31, 2025
December 31, 2024
Deferred tax assets:
Net operating loss carryforward
$ 30,238
$ 26,110
Accruals and Reserves
8,392
11,252
Goodwill and Intangibles
984
1,887
Research and Experimental Costs
22,138
19,331
Research and Development Credit
4,605
4,973
Share-based compensation
14,814
14,685
Total gross deferred tax assets
81,171
78,238
Less: Valuation allowance
( 542 )
( 158 )
Deferred tax assets, net of valuation allowance
80,629
78,080
Deferred tax liabilities:
Property and equipment
( 3,476 )
( 2,659 )
Other
357
353
Total gross deferred tax liabilities
( 3,119 )
( 2,306 )
Net deferred tax assets
$ 77,510
$ 75,774
The Company accounts for deferred taxes under ASC Topic 740 – Income Taxes (“ASC 740”), which requires a reduction of the carrying amount of deferred tax assets by a valuation allowance if, based on available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed periodically based on the ASC 740 more-likely-than-not realization threshold criterion. This assessment considers matters such as future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. The evaluation of the recoverability of the deferred tax assets requires that the Company weigh all positive and negative evidence to reach a conclusion that it is more likely than not that all or some portion of the deferred tax assets will not be realized. The weight given to the evidence is commensurate with the extent to which it can be objectively verified. As of December 31, 2025, based on its assessment of the realizability of its net deferred tax assets, the Company concluded that its U.S. federal, and the majority of its foreign net deferred tax assets will more-likely-than-not be fully realized, however certain U.S. State and foreign deferred tax assets will likely not be fully realized.
As of December 31, 2025, the Company had federal, state and foreign net operating losses of approximately $ 110.9 , $ 84.8 and $ 11.3 , respectively. The full amount of $ 110.9 of federal net operating loss can be carried forward indefinitely and can offset 80% of future taxable income. Certain state net operating losses will carry forward for a limited number of years and, if not utilized, may begin to expire in 2031. As of December 31, 2025, the Company determined that $ 14.5 of state net operating loss (“NOL”) will likely expire and recorded $ 0.3 of valuation allowance. Certain foreign net operating losses will carry forward for a limited number of years and, if not utilized, will begin to expire in 2029. As of December 31, 2025, the Company determined that $ 1.0 of foreign NOL will likely expire and recorded $ 0.2 million of valuation allowance. The Company conducted an IRC Section 382 analysis with respect to its net operating loss carryforward and determined there was an immaterial limitation.
Undistributed earnings of the Company’s foreign subsidiaries are considered to be indefinitely reinvested and accordingly, no provision for applicable income taxes has been provided thereon. Upon distribution of those earnings, the Company would be subject to withholding taxes payable to various foreign countries. As of December 31, 2025 the undistributed earnings of the Company's foreign subsidiaries could result in withholding taxes of approximately $ 1.2 , if repatriated.
As of December 31, 2025, the Company had federal and California Research and Development credit carryforwards of approximately $ 6.3 and $ 0.8 , respectively. The federal credit can be carried forward 20 years and will begin to expire in 2039. The California credit can be carried forward indefinitely.
Uncertain Tax Positions
The Company maintains liabilities for uncertain tax positions. These liabilities involve considerable judgment and estimation and are continuously monitored by management based on the best information available, including changes in tax regulations, the outcome of relevant court cases, and other information. A reconciliation of the beginning and ending amount of gross unrecognized benefits is as follows:
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Year Ended December 31,
2025
2024
2023
Unrecognized tax benefits - beginning of year
$ 2,573
$ 1,904
$ 1,309
Gross increase for tax positions of prior years
( 450 )
( 39 )
63
Gross increase for tax positions of current year
278
708
532
Unrecognized tax benefits - end of year
$ 2,401
$ 2,573
$ 1,904
The unrecognized tax benefits relate to federal and California R&D credits are generated from 2019 through 2025. The total amount of unrecognized tax benefits that would affect the Company's effective tax rate, if recognized, is $ 2,401 and $ 2,573 at December 31, 2025 and 2024, respectively. The Company's policy is to recognize interest and penalties related to income tax matters in income tax expense. As of December 31, 2025 and 2024, the Company did not accrue interest or penalties related to uncertain tax positions. The company does not expect any of the uncertain tax positions to reverse during the next 12 months.
There are no federal or state tax examinations in progress. Because the Company has net operating loss carryforwards, there are open statutes of limitations in which federal taxing authorities may examine the Company's tax returns for all years from December 31, 2012 through the current period. U.S. State taxing authorities may examine the Company's tax returns for all years from December 31, 2015 through the current period and foreign tax authorities may examine the Company's tax return for all years from December 31, 2020 through the current period.
The Company is subject to a wide variety of tax laws and regulations across the jurisdictions where it operates. Regulatory developments from the U.S. or international tax reform legislation could result in an impact to the Company's effective tax rate. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into U.S. law. In accordance with ASC 740, the Company evaluated the impact of the legislation on its financial statements, including potential changes to deferred tax assets and liabilities, and the effective tax rate. The Company determined that OBBBA did not have a material impact on its consolidated financial statements. The Company continues to monitor the Base Erosion and Profit Shifting (BEPS) Integrated Framework provided by the Organization for Economic Co-operation and Development (OECD) including the legislative adoption of Pillar I and II by countries, and all other tax regulatory changes, to evaluate the potential impact on future periods. The adoption of Pillar Two rules did not have a significant impact on the Company's consolidated financial statements in 2025.
13. COMMITMENTS AND CONTINGENCIES
Contingencies
The Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business and that have not been fully resolved. The outcome of litigation is inherently uncertain. In the opinion of management, and except as set forth below, there was not at least a reasonable possibility the Company may have incurred a material loss, or a material loss greater than a recorded accrual, concerning loss contingencies for asserted legal and other claims.
Litigation and other legal matters are inherently unpredictable and subject to substantial uncertainties and adverse resolutions could occur. In addition, litigation and other legal matters, including class-action lawsuits, government investigations and regulatory proceedings can be costly to defend and, depending on the class size and claims, could be costly to settle. The Company believes that its defenses and assertions in pending legal proceedings have merit and the Company believes that it has adequately and appropriately accrued for legal matters that are estimable. However, substantial unanticipated judgments, penalties, sanctions, and fines do occur. As a result, the Company could from time to time incur judgments, enter into settlements, or revise its expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on its results of operations in the period in which the amounts are accrued and/or its cash flows in the period in which the amounts are paid.
Antitrust Litigation
The Company and its affiliated brokerage entities were among several defendants in eight U.S. and one Canadian putative class action lawsuits alleging that the Company participated in a system that resulted in sellers of residential property paying inflated buyer broker commissions in violation of U.S. federal and state antitrust laws and federal Canadian antitrust laws, as applicable, and one U.S. putative class action lawsuit alleging that the Company participated in a system that resulted in buyers of residential property paying inflated home prices as a result of sellers paying inflated buyer broker commissions in violation of federal and Illinois antitrust laws (collectively, the “antitrust litigation”). On December 9, 2024, the Company and certain of its subsidiaries entered into a Settlement Agreement (the “Settlement”) with plaintiffs in the U.S. antitrust lawsuit 1925 Hooper LLC, et al. v. The National Association of Realtors et al., Case No. 1:23-cv-05392- SEG (United States District Court for the Northern District of Georgia, Atlanta Division), which was filed on November 22, 2023 against the Company and other U.S. brokerage defendants (the “Hooper Action”). The Settlement resolves all claims set forth in the Hooper Action and similar claims on a nationwide basis against the Company (collectively, the “Claims”) and releases the Company, its subsidiaries and affiliates, and their independent contractor real estate agents in the U.S. from the Claims. By the terms of the Settlement, the Company agreed to make certain changes to
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its business practices and to pay a total settlement amount of $ 34.0 million (not in thousands) (the “Settlement Amount”) into a qualified settlement escrow fund (the “Settlement Fund”). The Settlement Amount is expected to be deposited into the Settlement Fund in installments, of which 50 % of the settlement (or $ 17.0 million (not in thousands)) is to be deposited into the Settlement Fund within 30 business days after preliminary court approval of the Settlement and the final 50 % (or $ 17.0 million (not in thousands)) is to be deposited on or before the one-year anniversary of the initial settlement payment. On May 23, 2025, the United States District Court for the Northern District of Georgia granted preliminary approval of the Settlement. In accordance with the Settlement terms, the Company funded the first $ 17.0 million (not in thousands) installment into the Settlement Fund during the fiscal quarter ended June 30, 2025. The Company intends to use available cash to pay the remaining Settlement Amount. While management has determined that loss in excess of the Settlement Amount is reasonably possible, it is currently unable to reasonably estimate the possible additional loss or range of possible additional loss because, among other reasons, (i) the settlement is subject to court approval and appeals processes, (ii) further developments in the legal proceedings, including but not limited to motions or rulings, could impact the Company’s exposure; and/or (iii) potential changes in law or precedent could affect the final determination of liability.
The Settlement remains subject to final court approval and will become effective following any appeals process, if applicable. The Settlement and any actions taken to carry out the Settlement are not an admission or concession of liability, or of the validity of any claim, defense, or point of fact or law on the part of any party. The Company continues to deny the material allegations of the complaints in the antitrust litigation. The Company entered into the Settlement after considering the risks and costs of continuing the litigation.
The Company continues to vigorously defend against the claims in the Canadian putative class action antitrust lawsuit Kevin McFall v. Canadian Real Estate Association, et al., Case No. T-119-24-ID 1 (Federal Court of Canada), filed on January 18, 2024. Management is currently unable to reasonably estimate the possible loss or range of possible loss for the Canadian antitrust litigation because, among other reasons, (i) the proceeding is in preliminary stages, (ii) specific damage amounts have not been sought, (iii) damages sought are, in our opinion, unsupported and/or exaggerated, (iv) there are significant factual issues to be resolved; and/or (v) there are novel legal issues or unsettled legal theories presented. For the Canadian antitrust litigation, we have not recorded any accruals as of December 31, 2025. While the Company does not expect such litigation to have a material adverse effect on our business, results of operations, cash flows or financial condition, due to the complexities inherent in such litigation, including the uncertainty of legal processes and potential developments in the cases, the ultimate liability may differ from current expectations.
Derivative Litigation
Certain current and former directors and officers of the Company were named as defendants, and the Company was named as a nominal defendant, in a derivative lawsuit in the Court of Chancery of the State of Delaware, first filed on September 25, 2024, entitled Los Angeles City Employees’ Retirement System, on behalf of eXp World Holdings, Inc. v. Glenn Sanford, et al. (C.A. No. 2024-0998-KSJM). The lawsuit alleges that certain current and former directors and officers breached fiduciary duties related to the Company’s response to reports of alleged sexual misconduct involving independent contractor real estate agents affiliated with the Company’s subsidiaries and that certain defendants had improper compensation arrangements allowing them to profit from the Company’s revenue share program in connection therewith. The complaint seeks a court declaration of fiduciary duty breaches, disgorgement of profits, damages with interest, injunctive relief for improved oversight of sexual misconduct allegations, and reimbursement of plaintiffs’ costs, including expert and attorney fees. Although the Company does not anticipate that the outcome of such litigation will have a material adverse effect on its business, results of operations, cash flows, or financial condition, the inherent complexities and uncertainties of legal proceedings may result in a liability that differs from current expectations. Management is currently unable to reasonably estimate the possible loss or range of possible loss for this matter because, among other reasons, (i) the proceeding is progressing through preliminary stages, (ii) specific damage amounts have not been sought, (iii) there are significant factual issues to be resolved; and/or (iv) there are novel legal issues or unsettled legal theories presented.
Capital Maintenance Agreements
An indirect subsidiary and unconsolidated joint venture of the Company, SUCCESS ® Lending, is a party to Mortgage Warehouse Agreements and related ancillary agreements (the “Credit Agreements”) with JPMorgan Chase Bank and Texas Capital Bank, which each provide SUCCESS ® Lending with a revolving warehouse credit line of up to $ 25 million. It is customary for mortgage businesses like SUCCESS ® Lending to obtain warehouse credit lines in order to enable them to close and fund residential mortgage loans for subsequent sale to investors. SUCCESS ® Lending will use the borrowing capacity under the Credit Agreements exclusively for such purposes and borrowings will generally be repaid with the proceeds received from the sale of mortgage loans.
In connection with the Credit Agreements, the Company has entered into Capital Maintenance Agreements with each of JPMorgan Chase Bank and Texas Capital Bank whereby the Company agrees to provide certain funds necessary to ensure that SUCCESS ® Lending is at all times in compliance with its financial covenants under the Credit Agreements. The Company’s capital commitment
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liability under the Capital Maintenance Agreement with JPMorgan Chase Bank is limited to $ 2.0 million. The Company’s capital commitment liability under the Capital Maintenance Agreement with Texas Capital Bank is limited to $ 1.25 million. The Credit Agreements represent off-balance sheet arrangements for the Company.
14. DEFINED CONTRIBUTION SAVINGS PLAN
The Company offers a defined contribution savings plan to provide eligible employees with a retirement benefit that permits eligible employees the opportunity to actively participate in the process of building a personal retirement fund. The Company sponsors the defined contribution savings plan. The Company matches a portion of contributions made by participating employees. For the years ended December 31, 2025, 2024 and 2023, the Company's costs for contributions to this plan were $ 4,536 , $ 4,569 , and $ 4,763 , respectively.
15. SUBSEQUENT EVENTS
Quarterly Cash Dividend
On February 10, 2026 , the Board approved a cash dividend of $ 0.05 per common share expected to be paid on March 27, 2026 to stockholders of record on March 9, 2026 .The ex-dividend date is expected to be on or around March 6, 2026. The dividend will be paid in cash.
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Item 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.