Item 1. Financial Statements
Item 1. FINANCIAL STATEMENTS (UNAUDITED)
EXP WORLD HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
(UNAUDITED)
March 31, 2025
December 31, 2024
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$ 115,655
$ 113,607
Restricted cash
66,569
54,981
Accounts receivable, net of allowance for credit losses of $ 2,194 and $ 1,589 , respectively
104,045
87,692
Prepaids and other assets
14,655
11,692
TOTAL CURRENT ASSETS
300,924
267,972
Property and equipment, net
12,209
11,615
Other noncurrent assets
21,853
11,679
Intangible assets, net
6,251
6,456
Deferred tax assets, net
77,283
75,774
Goodwill
17,263
17,226
TOTAL ASSETS
$ 435,783
$ 390,722
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable
$ 10,109
$ 10,478
Customer deposits
67,345
55,660
Accrued expenses
112,111
85,661
Litigation contingency
34,000
34,000
Other current liabilities
238
54
TOTAL CURRENT LIABILITIES
223,803
185,853
TOTAL LIABILITIES
223,803
185,853
EQUITY
Common Stock, $ 0.00001 par value 900,000,000 shares authorized; 197,536,271 issued and 156,169,130 outstanding at March 31, 2025; 195,028,207 issued and 154,133,385 outstanding at December 31, 2024
2
2
Additional paid-in capital
993,164
962,758
Treasury stock, at cost: 41,367,141 and 40,894,822 shares held, respectively
( 691,662 )
( 686,680 )
Accumulated deficit
( 86,761 )
( 68,135 )
Accumulated other comprehensive (loss)
( 2,763 )
( 3,076 )
TOTAL EQUITY
211,980
204,869
TOTAL LIABILITIES AND EQUITY
$ 435,783
$ 390,722
The accompanying notes are an integral part of these condensed consolidated financial statements.
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EXP WORLD HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)
(In thousands, except share amounts and per share data)
(UNAUDITED)
Three Months Ended March 31,
2025
2024
Revenues
$ 954,906
$ 943,054
Operating expenses
Commissions and other agent-related costs
878,771
864,746
General and administrative expenses
66,871
62,582
Technology and development expenses
16,805
14,761
Sales and marketing expenses
2,835
3,139
Litigation contingency
-
16,000
Total operating expenses
965,282
961,228
Operating (loss) income
( 10,376 )
( 18,174 )
Other (income) expense
Other (income) expense, net
( 943 )
( 1,188 )
Equity in (income) losses of unconsolidated affiliates
( 80 )
149
Total other (income) expense, net
( 1,023 )
( 1,039 )
(Loss) income before income tax expense
( 9,353 )
( 17,135 )
Income tax (benefit) expense
1,671
( 3,305 )
Net (loss) income from continuing operations
( 11,024 )
( 13,830 )
Net (loss) income from discontinued operations
-
( 1,809 )
Net (loss) income
($ 11,024 )
($ 15,639 )
Earnings (loss) per share
Basic, net (loss) income from continuing operations
($ 0.07 )
($ 0.09 )
Basic, net (loss) income from discontinued operations
-
( 0.01 )
Basic, net (loss) income
($ 0.07 )
($ 0.10 )
Diluted, net (loss) income from continuing operations
($ 0.07 )
($ 0.09 )
Diluted, net (loss) income from discontinued operations
-
( 0.01 )
Diluted, net (loss) income
($ 0.07 )
($ 0.10 )
Weighted average shares outstanding
Basic
154,738,167
154,740,334
Diluted
154,738,167
154,740,334
Comprehensive (loss) income:
Net (loss) income
($ 11,024 )
($ 15,639 )
Other comprehensive income (loss):
Foreign currency translation gain (loss), net of tax
313
( 889 )
Comprehensive (loss)
($ 10,711 )
($ 16,528 )
The accompanying notes are an integral part of these condensed consolidated financial statements.
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EXP WORLD HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
(UNAUDITED)
Three Months Ended March 31,
2025
2024
Common stock:
Balance, beginning of period
$ 2
$ 2
Balance, end of period
2
2
Treasury stock:
Balance, beginning of period
( 686,680 )
( 545,559 )
Repurchases of common stock
( 4,982 )
( 33,032 )
Balance, end of period
( 691,662 )
( 578,591 )
Additional paid-in capital:
Balance, beginning of period
962,758
804,833
Shares issued for stock options exercised
300
977
Agent growth incentive stock-based compensation
7,497
7,908
Agent equity stock-based compensation
20,756
25,868
Stock option compensation
1,853
1,990
Balance, end of period
993,164
841,576
Accumulated (deficit) earnings:
Balance, beginning of period
( 68,135 )
( 16,769 )
Net (loss) income
( 11,024 )
( 15,639 )
Dividends declared and paid ( $ 0.05 per share of common stock)
( 7,602 )
( 7,585 )
Balance, end of period
( 86,761 )
( 39,993 )
Accumulated other comprehensive income (loss):
Balance, beginning of period
( 3,076 )
332
Foreign currency translation gain (loss)
313
( 889 )
Balance, end of period
( 2,763 )
( 557 )
Noncontrolling interest:
Balance, beginning of period
-
1,169
Transactions with noncontrolling interests
-
( 1,169 )
Balance, end of period
-
-
Total equity
$ 211,980
$ 222,437
The accompanying notes are an integral part of these condensed consolidated financial statements.
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EXP WORLD HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(UNAUDITED)
Three Months Ended March 31,
2025
2024
OPERATING ACTIVITIES
Net (loss) income
($ 11,024 )
($ 15,639 )
Reconciliation of net income (loss) to net cash provided by operating activities:
Depreciation expense
1,945
2,059
Amortization expense - intangible assets
616
340
Allowance for credit losses on receivables/bad debt on receivables
605
159
Equity in (income) loss of unconsolidated affiliates
( 80 )
149
Agent growth incentive stock-based compensation expense
8,119
8,827
Stock option compensation
1,853
1,990
Agent equity stock-based compensation expense
20,756
25,868
Deferred income taxes, net
( 1,509 )
( 4,786 )
Changes in operating assets and liabilities:
Accounts receivable
( 15,808 )
( 20,141 )
Prepaids and other assets
( 2,963 )
( 311 )
Customer deposits
11,685
31,239
Accounts payable
( 369 )
197
Accrued expenses
25,828
14,703
Litigation contingency
-
16,000
Other operating activities
184
-
NET CASH PROVIDED BY OPERATING ACTIVITIES
39,838
60,654
INVESTING ACTIVITIES
Purchases of property and equipment
( 2,553 )
( 1,323 )
Investments in unconsolidated affiliates
( 11,244 )
( 3,807 )
Capitalized software development costs in intangible assets
( 450 )
( 115 )
NET CASH USED IN INVESTING ACTIVITIES
( 14,247 )
( 5,245 )
FINANCING ACTIVITIES
Repurchase of common stock
( 4,982 )
( 33,032 )
Proceeds from exercise of options
300
977
Transactions with noncontrolling interests
-
( 1,169 )
Dividends declared and paid
( 7,602 )
( 7,585 )
NET CASH USED IN FINANCING ACTIVITIES
( 12,284 )
( 40,809 )
Effect of changes in exchange rates on cash, cash equivalents and restricted cash
329
( 589 )
Net change in cash, cash equivalents and restricted cash
13,636
14,011
Cash, cash equivalents and restricted cash, beginning balance
168,588
169,893
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ENDING BALANCE
$ 182,224
$ 183,904
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash paid for income taxes
1,480
1,109
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Property and equipment purchases in accounts payable
214
30
The accompanying notes are an integral part of these condensed consolidated financial statements.
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eXp World Holdings, Inc.
Notes to the Condensed Consolidated Financial Statements
(UNAUDITED)
(Amounts in thousands, except share amounts and per share data or as noted otherwise)
1.
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
eXp World Holdings, Inc. (“eXp” or, collectively with its subsidiaries, the “Company,” “we,” “us,” or “our”) owns and oversees a diversified portfolio of service-oriented businesses. These businesses significantly benefit from the integration of our advanced enabling technology platform. Our strategic focus is on expanding our real estate brokerage operations. To achieve this, we emphasize enhancing the value proposition for our agents, investing in the development of immersive, cloud-based technological solutions, and offering affiliate and media services that bolster these efforts.
The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.
These interim financial statements should be read in conjunction with the audited consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the Securities and Exchange Commission (“SEC”) on February 20, 2025 (the “2024 Annual Report”).
In our opinion, the accompanying interim unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation. Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.
The Company is operated and managed as three reportable segments, which are North American Realty, International Realty and Other Affiliated Services. Our business segments bring together related eXp technologies and services to support the success and development of agents, entrepreneurs and businesses and provide them remote business solutions. In the first quarter of 2025, the Company’s Chief Operating Decision Maker (“CODM”) began managing the FrameVR.io® business as part of the North American Realty segment.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The accompanying interim unaudited condensed consolidated financial statements include the accounts of eXp and its consolidated subsidiaries, including those entities in which we have a variable interest of which we are 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 method or the cost method of accounting for investments. Entities in which the Company has less than a 20% investment and where the Company does not exercise significant influence are accounted for under the cost method. Intercompany transactions and balances are eliminated upon consolidation.
Variable interest entities (“VIEs”) and noncontrolling interests
A company is deemed to be the primary beneficiary of a VIE and must consolidate the entity if the company has both: (i) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, and (ii) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.
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 segment unless the joint venture specifically supports one of the reportable segments.
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Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to allowance for credit losses, legal contingencies, income taxes, revenue recognition, stock-based compensation, goodwill, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that 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 and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
Restricted cash
Restricted cash consists of cash held in escrow by the Company on behalf of real estate buyers. The Company recognizes a corresponding customer deposit liability until the funds are released. Once the cash transfers from escrow, the Company reduces the respective customers’ deposit liability.
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown on the condensed consolidated statements of cash flows.
Cash and cash equivalents
Restricted cash
Total
Balance, March 31, 2024
$ 109,169
$ 74,735
$ 183,904
Balance, December 31, 2024
$ 113,607
$ 54,981
$ 168,588
Balance, March 31, 2025
$ 115,655
$ 66,569
$ 182,224
3.
EXPECTED CREDIT LOSSES
The Company is exposed to credit losses primarily through trade and other financing receivables arising from revenue transactions. The Company uses the aging schedule method to estimate current expected credit losses (“CECL”) based on days of delinquency, including information about past events and current economic conditions. The Company’s accounts receivable is separated into three categories to evaluate allowance under the CECL impairment model. The receivables in each category share similar risk characteristics. The three categories include agent non-commission based fees, agent short-term advances, and commissions receivable for real estate property settlements.
The Company increases the allowance for expected credit losses when the Company estimates all or a portion of a receivable is uncollectable. The Company recognizes recoveries as a decrease to the allowance for expected credit losses.
As of March 31, 2025 and December 31, 2024, receivables from real estate property settlements totaled $ 97,775 and $ 82,300 , respectively, of which the Company recognized expected credit losses of $ 24 and $ 34 , respectively. As of March 31, 2025 and December 31, 2024, agent non-commission based fees receivable and short-term advances totaled $ 8,461 and $ 6,980 , of which the Company recognized expected credit losses of $ 2,170 and $ 1,555 , respectively.
4 .
PROPERTY AND EQUIPMENT, NET
Property and equipment, net consisted of the following:
March 31, 2025
December 31, 2024
Computer hardware and software
$ 46,048
$ 44,079
Furniture, fixture, and equipment
2,205
2,205
Total depreciable property and equipment
48,253
46,284
Less: accumulated depreciation
( 37,220 )
( 35,262 )
Depreciable property and equipment, net
11,033
11,022
Assets under development
1,176
593
Property and equipment, net
$ 12,209
$ 11,615
For the three months ended March 31, 2025 and 2024, depreciation expense was $ 1,945 and $ 2,059 , respectively.
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5.
GOODWILL AND INTANGIBLE ASSETS
Goodwill was $ 17,263 as of March 31, 2025 and $ 17,226 as of December 31, 2024. As of March 31, 2025, the Company recorded cumulative translation adjustment of $ 37 related to Canadian goodwill.
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.
Intangible assets, net consisted of the following:
March 31, 2025
Gross
Accumulated
Net Carrying
Amount
Amortization
Impairment
Amount
Trade name
$ 2,044
($ 1,018 )
$ -
$ 1,026
Existing technology
5,759
( 2,934 )
-
2,825
Non-competition agreements
461
( 306 )
-
155
Customer relationships
2,011
( 640 )
-
1,371
Licensing agreement
210
( 210 )
-
-
Intellectual property
1,453
( 579 )
-
874
Total intangible assets
$ 11,938
($ 5,687 )
$ -
$ 6,251
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
Definite-lived intangible assets are amortized using the straight-line method over an asset’s estimated useful life. Amortization expense for definite-lived intangible assets for the three months ended March 31, 2025 and 2024 was $ 616 and $ 340 , respectively.
6. STOCKHOLDERS’ EQUITY
The following table represents a share reconciliation of the Company’s common stock issued for the periods presented:
Three Months Ended March 31,
2025
2024
Common stock:
Balance, beginning of period
195,028,207
183,606,708
Shares issued for stock options exercised
56,412
211,158
Agent growth incentive stock-based compensation
446,657
353,688
Agent equity stock-based compensation
2,004,995
2,189,922
Balance, end of period
197,536,271
186,361,476
The Company’s equity programs described below were administered under the stockholder approved 2015 Equity Incentive Plan, as amended, for issuances prior to September 1, 2024, and under the stockholder approved 2024 Equity Incentive Plan for issuances on or after September 1, 2024. The purpose of the equity plans 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.
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Agent Equity Program (“AEP”)
The Company provides agents and brokers the opportunity to elect to receive 5 % of commissions earned from each completed real estate transaction in the form of shares of common stock AEP. If agents and brokers elect to receive portions of their commissions in shares of 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. The Company recognized a 10 % discount on these issuances prior to February 29, 2024, and a 5 % discount on these issuances beginning as of March 1, 2024, as an additional cost of sales charge during the periods presented.
During the three months ended March 31, 2025 and 2024, the Company issued 2,004,995 and 2,189,922 shares of common stock, respectively, to agents and brokers with a value of $ 20,756 and $ 25,868 , respectively, inclusive of discount.
Agent Growth Incentive Program (“AGIP”)
The Company administers an equity incentive program whereby agents and brokers become eligible to receive awards of the Company’s common stock through agent attraction and performance benchmarks. The AGIP encourages greater performance and awards agents with shares of 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 granted on a fixed-dollar amount of shares based on the achievement of performance metrics. As such, the awards are classified as liabilities until the number of share awards becomes fixed once the performance metric is achieved.
For the three months ended March 31, 2025 and 2024 the Company’s stock-based compensation expense attributable to the Agent Growth Incentive Program was $ 8,119 and $ 8,827 , respectively, of which the total amount of stock-based compensation attributable to liability classified awards was $ 622 and $ 650 , respectively.
The following table illustrates changes in the Company’s stock-based compensation liability 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
622
Stock grants reclassified from liability to equity year to date
-
Balance, March 31, 2025
$ 5,667
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 (or 5 years from the date of grant for options granted to significant stockholders). These options typically have time-based restrictions with equal and periodically graded vesting over a three-year period.
During the three months ended March 31, 2025 and 2024, the Company granted 72,845 and 353,656 stock options, respectively, to employees with an estimated grant date fair value of $ 5.66 and $ 6.93 per share, respectively. The fair value was calculated using a Black Scholes-Merton option pricing model.
Other Awards
In addition to the core programs described above, the Company may grant other equity-based or ad hoc awards as needed to attract and retain employees, agents, or team leaders. These awards are generally granted with time-based or performance-based vesting conditions, and the terms are determined based on the specific objectives of the grant.
To date, participation and grants of this variety have been limited .
Restricted Stock Units (“RSUs”)
The Company grants RSUs to officers and certain employees and may grant them to directors and consultants in the future. Each RSU represents the right to receive one share of the Company’s common stock upon vesting, subject to time-based
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and/or performance-based restrictions. RSUs typically vest over a three-year period with equal and periodically graded vesting or cliff vesting, as applicable. RSUs do not have an exercise price, and no payment is required by the grantee to receive the shares upon vesting. The fair value of the 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 quarters ended March 31, 2025 and 2024, the Company granted 47,652 and 0 RSUs, respectively, with weighted average grant date fair values of $ 10.67 and n/a. As of March 31, 2025 and 2024, the total unrecognized stock-based compensation associated with these RSUs was $ 480 and n/a, which are expected to be recognized over a weighted average period of approximately 3.05 and 0 years, respectively.
Stock Repurchase Plan
In December 2018, the Company’s board of directors (the “Board”) approved a stock repurchase program (as amended, the “Stock Repurchase Program”) authorizing the Company to purchase up to $ 25.0 million of its common stock, which was amended in November 2019 to increase the authorized repurchase amount to $ 75.0 million. In December 2020, the Board approved another amendment to the Stock Repurchase Program, increasing the total amount authorized to be purchased from $ 75.0 million to $ 400.0 million. In May 2022, the Board approved an increase to the total amount of its Stock Repurchase Program from $ 400.0 million to $ 500.0 million. In June 2023, the Board approved an increase to the total amount of its Stock Repurchase Program from $ 500.0 million to $ 1.0 billion. Purchases under the Stock Repurchase Program may be made in the open market or through a 10b5-1 plan and are expected to comply with Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The timing and number of shares repurchased under the Stock Repurchase Program depends upon market conditions. The Stock Repurchase Program does not require the Company to acquire a specific number of shares. The cost of the shares that are repurchased under the Stock Repurchase Program is funded from cash and cash equivalents on hand.
10b5-1 Repurchase Plan
In connection with the Stock Repurchase Program, from time to time, the Company adopts written trading plans pursuant to Rule 10b5-1 of the Exchange Act to conduct repurchases on the open market.
On January 10, 2022, the Company and Stephens Inc. (“Stephens”), a financial services firm that acts as an agent authorized to purchase shares on behalf of the Company, entered into that certain Issuer Repurchase Plan (as amended, the “Issuer Repurchase Plan”) which authorized Stephens to repurchase shares of common stock of the Company, which is amended from time to time to adjust the monthly repurchase amount. Most recently, on March 12, 2025, the Board approved, and the Company entered into a Tenth Amendment to the Issuer Repurchase Plan which provides for the repurchase of up to (i) $ 2.0 million during the calendar month of March 2025, (ii) $ 7.5 million during each of the calendar months commencing April 1, 2025 through and including May 31, 2025, (iii) $ 10.0 million during the calendar month of June 2025, (iv) $ 15.0 million during each of the calendar months commencing July 1, 2025 through and including October 31, 2025, and (v) $ 10.0 million during each of the calendar months commencing November 1, 2025 through and including December 31, 2025.
For accounting purposes, shares of common stock repurchased under the Stock Repurchase Program are recorded based upon the applicable trade date. 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 share changes in treasury stock for the periods presented (not in thousands):
Three Months Ended March 31,
2025
2024
Treasury stock:
Balance, beginning of period
40,894,822
28,937,671
Repurchases of common stock
472,319
2,577,242
Balance, end of period
41,367,141
31,514,913
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7. SEGMENT INFORMATION
The reportable segments presented below represent the Company’s segments for which separate financial information is available and is utilized on a regular basis by its CODM to assess performance and to allocate resources. In identifying its reportable segments, the Company also considers the nature of services provided by its segments.
Management evaluates the operating results of each of its reportable segments based upon revenues and Adjusted Segment EBITDA. Adjusted Segment EBITDA is defined by us as a segment’s operating income (loss) from continuing operations plus depreciation and amortization, litigation contingency and stock-based compensation expenses. See “Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report for a discussion of why management believes Adjusted Segment EBITDA, a non-U.S. GAAP measure, is useful. The Company’s presentation of Adjusted Segment EBITDA may not be comparable to similar measures used by other companies.
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 our SUCCESS ® Magazine, and other ancillary ventures.
The Company also reports corporate expenses, as further detailed below, as “Corporate 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 throughout the Notes to the Condensed Consolidated Financial Statements included herein. The Company accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current market prices. The following table provides information about the Company’s reportable segments and a reconciliation of the total segment Revenues to consolidated Revenues and Adjusted Segment EBITDA to the consolidated operating profit (loss) from continuing operations and Goodwill (in thousands).
Revenues
Three Months Ended March 31,
2025
2024
North American Realty
$ 923,048
$ 927,137
International Realty
31,657
15,596
Other Affiliated Services
827
1,788
Revenues reconciliation:
Segment eliminations
( 626 )
( 1,467 )
Consolidated revenues
$ 954,906
$ 943,054
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Commissions and other agent-related costs
Three Months Ended March 31,
2025
2024
North American Realty
$ 852,058
$ 852,238
International Realty
26,373
12,618
Other Affiliated Services
340
662
Commissions reconciliation:
Segment eliminations
-
( 772 )
Consolidated commissions and other agent-related costs
$ 878,771
$ 864,746
Adjusted EBITDA
Three Months Ended March 31,
2025
2024
North American Realty
$ 7,736
$ 17,807
International Realty
( 1,615 )
( 3,355 )
Other Affiliated Services
( 1,455 )
( 767 )
Corporate expenses and other
( 2,509 )
( 2,643 )
Consolidated Adjusted EBITDA
$ 2,157
$ 11,042
(Loss) income before income tax expense reconciliation:
Depreciation and amortization expense
2,561
2,399
Litigation contingency
-
16,000
Stock-based compensation expense
8,119
8,827
Stock option expense
1,853
1,990
Other (income) expense, net
( 1,023 )
( 1,039 )
Consolidated (loss) income before income tax expense
($ 9,353 )
($ 17,135 )
Goodwill
March 31, 2025
December 31, 2024
North American Realty
$ 17,263
$ 17,226
International Realty
-
-
Other Affiliated Services
-
-
Segment and consolidated total
17,263
17,226
The Company does not use segment assets to allocate resources or to assess performance of the segments and therefore, total segment assets have not been disclosed.
8. EARNINGS PER SHARE
Basic earnings per share is computed based on net income attributable to eXp stockholders divided by the basic weighted-average shares outstanding during the period. 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 periods presented:
Three Months Ended March 31,
2025
2024
Numerator:
Net (loss) income from continuing operations
($ 11,024 )
($ 13,830 )
Net (loss) income from discontinued operations
$ -
($ 1,809 )
Denominator:
Weighted average shares - basic
154,738,167
154,740,334
Dilutive effect of common stock equivalents
-
-
Weighted average shares - diluted
154,738,167
154,740,334
Earnings per share:
Net (loss) income from continuing operations per share - basic
($ 0.07 )
($ 0.09 )
Net (loss) income from discontinued operations per share - basic
$ -
($ 0.01 )
Net (loss) income from continuing operations per share - diluted
($ 0.07 )
($ 0.09 )
Net (loss) income from discontinued operations per share - diluted
$ -
($ 0.01 )
For three months ended March 31, 2025 and 2024 total outstanding shares of common stock excluded 3,424,959 and 3,212,244 shares, respectively, from the computation of diluted earnings per share because their effect would have been anti-dilutive.
9 . INCOME TAXES
Our quarterly tax provision is computed by applying the estimated annual effective tax rate to the year-to-date pre-tax income or loss plus discrete tax items arising in the period. Our provision for income tax expense (benefit) amounted to $ 1,671 and ($ 3,305 ) for the three months ended March 31, 2025 and 2024, which represent effective tax rates of ( 17.9 %) and 18.0 % , respectively. The effective tax rate differs from our statutory rates in both periods primarily due to foreign and domestic mix of earnings, and stock-based compensation.
The Company is subject to a wide variety of tax laws and regulations in the jurisdictions where it operates. U.S. and international tax reform legislation could affect the Company's effective tax rate. The Company continues to monitor the OECD’s Base Erosion and Profit Shifting (BEPS) framework—including the legislative adoption of Pillar Two and other tax reform legislation by jurisdiction—to evaluate the potential impact on future periods. The Company does not expect the adoption of Pillar Two rules to have a significant impact on its consolidated financial statements in fiscal year 2025.
10 . FAIR VALUE MEASUREMENT
The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. The fair value hierarchy prioritizes the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories:
● Level 1 – Inputs are quoted market prices in active markets for identical assets or liabilities (these are observable market inputs).
● Level 2 – Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability (includes quoted market prices for similar assets or identical or similar assets in markets in which there are few transactions, prices that are not current or prices that vary substantially).
● Level 3 – Inputs are unobservable inputs that reflect the entity's own assumptions in pricing the asset or liability (used when little or no market data is available).
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 March 31, 2025 and December 31, 2024, the fair value of the Company’s money market funds was $ 33,800 and $ 38,344 , respectively.
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There have been no transfers between Level 1, Level 2 and Level 3 in the period presented. The Company did not have any Level 2 financial assets or liabilities in the period presented. In the first quarter of 2025, the Company acquired $ 11,000 of Level 3 assets, at fair value.
11. COMMITMENTS AND CONTINGENCIES
From time to time, the Company is subject to potential liability under laws and government regulations and various claims and legal actions that may be asserted against us that could have a material adverse effect on the business, reputation, results of operations, cash flows or financial condition. Such litigation includes, but is not limited to, actions or claims relating to cyber-attacks, data breaches, the Real Estate Settlement Procedures Act (“RESPA”), the Telephone Consumer Protection Act of 1991 (“TCPA”) and state consumer protection laws, antitrust and anticompetition, worker classification, timely filing required SEC filings, stockholder derivative actions and non-compliance with contractual or other legal obligations.
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 its business practices and to pay a total settlement amount of $ 34,000 (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 $ 17,000 ) will be deposited into the Settlement Fund within 30 business days after preliminary court approval of the Settlement and the final 50 % (or $ 17,000 ) will be deposited on or before the one-year anniversary of the initial settlement payment. The Company intends to use available cash to pay the Settlement Amount. Management has determined that a $ 34.0 million loss is probable and have included a $ 34.0 million litigation contingency accrual recorded for the year ended December 31, 2024. While management has determined that loss in excess of the accrual 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 preliminary and 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 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 March 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.
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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 in 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.
12. SUBSEQUENT EVENTS
Quarterly Cash Dividend
On May 5, 2025 , the Company’s Board declared a dividend of $ 0.05 per share which is expected to be payable on June 4, 2025 , to stockholders of record as of the close of business on May 19, 2025 . The ex-dividend date is expected to be on or around May 16, 2025. The dividend will be paid in cash.