EXP World Holdings, Inc. (EXPI)·Q3 2023 Earnings Summary

Executive Summary

• Q3 2023 revenue was $1.214B (-2% y/y), diluted EPS was $0.01, and adjusted EBITDA was $19.0M; GAAP net income was $1.3M, cash/cash equivalents were $120.1M, and EXPI repurchased $55.9M of stock in the quarter .
• International Realty delivered record revenue (+47% y/y to $14.9M) and improved toward breakeven, while North American Realty generated $27.2M of adjusted EBITDA (+21% y/y) despite industry transaction declines .
• Gross margin was lighter at 6.9%, driven by accelerated ICON awards (one-time), with management forecasting a reversion to ~7.5%+ in Q4; SG&A run-rate guidance held at ~$85M with Q4 higher due to EXPCON .
• Agent-centric metrics improved: NPS rose to 74 (from 71), agent count grew to 89,156, transactions increased 1% to 139,480, and U.S. market share sustained at 4.2%, with EXPI outpacing industry volume declines (industry down ~15% y/y in Q3) .
• Legal/regulatory overhang: Management acknowledged buyer-commission lawsuits and is evaluating buyback cadence amid uncertainty; narrative highlights tech/AI and HomeHunter/Exclusives initiatives as potential long-term differentiators .

What Went Well and What Went Wrong

What Went Well

• International acceleration: International Realty revenue +47% y/y to an all-time record; adjusted EBITDA loss improved meaningfully toward breakeven .
• North America resilience: North American Realty adjusted EBITDA +21% y/y to $27.2M; EXPI outperformed industry transactions (U.S. -15% y/y vs EXPI U.S. -9%) and maintained 4.2% U.S. market share .
• Strengthening agent value proposition: Launches of Boost, Thrive, and eXp Exclusives; NPS increased to 74; management emphasized fast iteration and agent-led programs (“we can iterate and launch very, very quickly”) .

What Went Wrong

• Gross margin compression: GP% came in at 6.9% (vs 7.5% last year) due to accelerated ICON awards; management viewed it as one-time but it pressured Q3 margins .
• Pricing/volume headwinds: Transaction volume down 4% y/y to $48.5B; price per unit down 4% y/y amid mortgage rates >8% constraining affordability .
• Segment losses persist: Virbela and Other Affiliated Services posted negative adjusted EBITDA; consolidated GAAP net income down y/y given prior-year tax benefit .

Financial Results

Segment performance (Q3 2023):

Key KPIs:

Balance sheet and capital returns (Q3 2023):

• Cash & cash equivalents: $120.1M .
• Share repurchases: $55.9M in Q3 2023 .
• Dividend: $0.05 declared for Q4 2023 (payable Nov 30 to holders of record Nov 16) .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “In a slower market environment where every transaction counts, eXp’s agents in the U.S. significantly outperformed the market during the third quarter.” — Glenn Sanford .
• “International has the best quarter ever, growing 47% over Q3 last year... Adjusted EBITDA was up 53%, and we generated a positive GAAP net income during the quarter.” — Jeff Whiteside .
• “We are continually raising the bar on what it means to be the most agent-centric brokerage... Luna, the GPT-4 powered generative AI support agent... remarkable engagement.” — Glenn Sanford (Q2) .
• “We launched Boost... and Thrive... eXp Exclusives (Oct 3) is an example of iterating fast... serving agent customers with best-in-class tools.” — Leo Pareja .
• “We’ve maintained a market share of 4.2% in the U.S., which really means we’ve increased our market share by around 8.7% on a transaction basis.” — Glenn Sanford .

Q&A Highlights

• Gross margin driver and outlook: GP% at 6.9% due to accelerated ICON awards (one-time); management expects GP% to revert to ~7.5%+ in Q4 .
• SG&A modeling: ~$85M run-rate is “relatively safe”; Q4 will be higher due to EXPCON costs .
• Business mix: EXPI skewed to list-side (approx. 55–60% list vs buy-side) .
• HomeHunter Global: Browser extension addresses fragmented international search; not applicable to U.S./Canada under current MLS structure .
• Capital returns amid legal backdrop: Buybacks under evaluation given recent lawsuits; no decision yet .

Estimates Context

• Wall Street consensus (S&P Global) for Q3 2023 Revenue and EPS was unavailable in this environment; as a result, estimate comparisons cannot be provided. Values retrieved from S&P Global were unavailable due to access limits.

Key Takeaways for Investors

• EXPI delivered resilient Q3 performance despite macro headwinds: revenue $1.214B, EPS $0.01, and adjusted EBITDA $19.0M; North America remains profit engine while International accelerates growth with improving losses .
• Margin softness was driven by a discrete ICON award acceleration; management expects GP% to normalize back toward ~7.5%+ in Q4, framing Q3 margin pressure as non-recurring .
• Agent-centric initiatives (Boost, Thrive, Exclusives) and rising NPS are likely to support share gains and conversion of larger broker teams through the downcycle, creating potential operating leverage as volumes recover .
• Legal/regulatory overhang around buyer agency creates uncertainty but also highlights EXPI’s scale-enabled tools (HomeHunter, Exclusives) that could become differentiators if market fragmentation rises; monitor capital return decisions under this backdrop .
• Balance sheet strength (no debt, $120.1M cash) and ongoing capital returns (buybacks/dividends) provide support; Q4 dividend maintained at $0.05 .
• Near-term: Watch Q4 GP% normalization, SG&A discipline, and agent growth/retention into a seasonally softer period. Medium-term: International profitability trajectory and traction of affiliate services (Revenos, mortgage/title) could expand margins as housing cycles turn .
• Without access to S&P Global consensus, market reaction drivers hinge on narrative: one-off margin hit vs improving international mix, agent outperformance vs industry, and clarity on legal risks and buyback cadence .