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eXp World Holdings, Inc. Reports Record Second Quarter 2017 Financial Results

BELLINGHAM, WA--(Marketwired - August 14, 2017) - eXp World Holdings, Inc. (EXPI), the holding company for eXp Realty, LLC, The Agent-Owned Cloud Brokerage®, has provided a corporate update and its financial results for the second quarter ended June 30, 2017.

Second Quarter 2017 Company Highlights:

  • Revenues in the second quarter of 2017 increased 198% to $39.6 million, compared to $13.3 million in the same year-ago quarter. Sequentially, this represents growth of 80% when compared to $22.0 million in the first quarter of 2017.
  • Net income in the second quarter of 2017 increased to $3.2 million, or $0.05 per diluted share, compared to net loss of $6.0 million, or $(0.12) per diluted share in the same year-ago quarter.
  • Adjusted EBITDA (a non-GAAP financial measure) increased 166% to $1.6 million in the second quarter of 2017, compared to $0.6 million in the same year-ago quarter.
  • Agents and brokers on the eXp Realty platform increased 180% to 3,913 on June 30, 2017, compared to 1,400 in the same year-ago period. Sequentially, this represents growth of 24% when compared to 3,113 agents and brokers on the platform as of March 31, 2017. As of August 13, 2017, the number of agents and brokers totaled 4,326.

Management Commentary
"Our rapid growth has continued unabated as we move through 2017, evidenced by our 198% revenue growth to a record $39.6 million in the second quarter, as well as our recently achieved 4,300-plus agent milestone," said Glenn Sanford, founder, chairman and CEO of eXp World Holdings, Inc. "We expect the pace of growth to continue in the second half of 2017, as we leverage the viral growth aspect of the eXp Realty model and growing our brand throughout North America. We believe our investments into core infrastructure and software development should also offer greater economies of scale and a notably increased capacity to onboard new agents to the eXp Realty platform moving forward.

"We also remain committed to keeping eXp Realty the most agent-centric real estate brokerage available. The creation of the Agent Advisory Council, as well as the recent naming of Suzy Truax, an eXp Realty real estate agent, to the Board of Directors, underscores our promise to ensure the agent's 'voice' is heard as we grow our organization.

"We believe that eXp World Holdings can create significant value for its shareholders, which will be accelerated by potentially introducing an affiliated services program. This offering could include services such as mortgage origination, homeowners insurance, and title and escrow services; however, we will continue to focus on our core infrastructure investments in further scaling the business for the foreseeable future. I am extremely proud of our team for their hard work, dedication and continued focus on maintaining the agent-centric culture that has made eXp Realty a great place to do business."

Second Quarter 2017 Financial Results
Revenues increased 198% to a record $39.6 million in the second quarter of 2017, compared to $13.3 million in the second quarter of 2016. Sequentially, revenues increased 80% when compared to revenue of $22.0 million in the first quarter of 2017. This growth is a direct result of the increased agent count and corresponding higher revenues realized by the company's real estate brokerage division, eXp Realty.

In the second quarter of 2017, eXp Realty added 800 agents and brokers to its platform, an increase of 169% when compared to 297 agents and brokers added in the second quarter of 2016. This represents a sequential increase of 11.5% when compared to 717 agents added in the first quarter of 2017. eXp Realty ended the second quarter of 2017 with 3,913 real estate professionals on its platform across 45 states, the District of Columbia, and Alberta and Ontario, Canada. As of August 13, 2017, eXp Realty had 4,326 agents on its platform.

During the second quarter of 2017, net income from operations was $3.3 million, compared to a net loss from operations of $6.0 million in the second quarter of 2016. This improvement was primarily due to the change of intrinsic value options, which resulted in a $5.5 million non-cash benefit recognized in the second quarter of 2017.

Net income in the second quarter of 2017 was $3.2 million, or $0.05 per diluted share, compared to a net loss of $6.0 million, or $(0.12) per diluted share, in the second quarter of 2016. This improvement was primarily attributed to the aforementioned increase in revenue, as well as a $0.6 million decrease in non-cash expenses.

Adjusted EBITDA (a non-GAAP financial measure) in the second quarter of 2017 increased 166% to $1.6 million, compared to $0.6 million in the second quarter of 2016.

Cash and cash equivalents as of June 30, 2017 were $1.6 million, compared to $1.8 million as of March 31, 2017.

About eXp World Holdings, Inc.
eXp World Holdings, Inc. (EXPI) is the holding company for eXp Realty, LLC, the Agent-Owned Cloud Brokerage®. As a full-service real estate brokerage, eXp Realty provides 24/7 access to collaborative tools, training, and socialization for real estate brokers and agents through its 3-D, fully-immersive, cloud office environment. eXp Realty, LLC and eXp Realty of Canada, Inc. also feature an attractive revenue sharing program that pays agents a percentage of gross commission income earned by fellow real estate professionals who they attract into the company.

As a publicly traded company, eXp World Holdings, Inc. uniquely offers real estate professionals within its ranks opportunities to earn company stock for production and contributions to overall company growth.

For more information, please visit the Company's Twitter, LinkedIn, Facebook, YouTube, or visit www.eXpRealty.com.

Use of Non-GAAP Financial Measures
To provide investors with additional information regarding our financial results, this press release includes references to Adjusted EBITDA, a non-GAAP financial measure. We view Adjusted EBITDA as an operating performance measure and, as such, we believe that the GAAP financial measure most directly comparable to it is net income (loss). We define Adjusted EBITDA as net income excluding interest, income taxes, depreciation, amortization, and stock based compensation. We believe that Adjusted EBITDA provides us an important measure of operating performance and enhances comparability while providing investors with useful insight into the underlying trends of the business. Our use of Adjusted EBITDA has limitations as an analytical tool, and this measure should not be considered in isolation or as a substitute for an analysis of our results as reported under GAAP, as the excluded items may have significant effects on our operating results and financial condition. Additionally, our measure of Adjusted EBITDA may differ from other companies' measure of Adjusted EBITDA. When evaluating our performance, Adjusted EBITDA should be considered with other financial performance measures, including various cash flow metrics, net income and other GAAP results. In the future, we may disclose different non-GAAP financial measures in order to help our investors and others more meaningfully evaluate and compare our future results of operations to our previously reported results of operations.

Safe Harbor Statement
The statements contained herein may include statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Such forward-looking statements speak only as of the date hereof, and the company undertakes no obligation to revise or update them. These statements include, but are not limited to, statements about the company's expansion, revenue growth, operating results, financial performance and net income changes. Such statements are not guarantees of future performance. Important factors that may cause actual results to differ materially and adversely from those expressed in forward-looking statements include changes in business or other market conditions; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks detailed from time to time in the company's Securities and Exchange Commission filings, including but not limited to the most recently filed Annual Report on Form 10-K.

             
EXP WORLD HOLDINGS, INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(UNAUDITED)  
             
             
    June 30,     December 31,  
    2017     2016  
                 
ASSETS                
CURRENT ASSETS                
  Cash and cash equivalents   $ 1,564,220     $ 1,684,608  
  Restricted cash     1,116,117       481,704  
  Accounts receivable, net of allowance $170,811 and $133,845, respectively     8,442,372       3,015,767  
  Prepaids and other assets     434,342       383,563  
                 
    TOTAL CURRENT ASSETS     11,557,051       5,565,642  
                 
OTHER ASSETS                
  Fixed assets, net     1,088,748       538,405  
                 
    TOTAL OTHER ASSETS     1,088,748       538,405  
                 
    TOTAL ASSETS   $ 12,645,799     $ 6,104,047  
                 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
                 
CURRENT LIABILITIES                
  Accounts payable   $ 472,162     $ 317,420  
  Customer deposits     1,116,117       481,704  
  Accrued expenses     7,165,071       2,742,119  
  Notes payable     9,116       35,778  
                   
    TOTAL CURRENT LIABILITIES     8,762,466       3,577,021  
                   
  Commitments and contingencies     -       -  
                 
STOCKHOLDERS' EQUITY                
  Common Stock, $0.00001 par value 220,000,000 shares authorized;          
  53,139,694 shares and 52,316,679 shares issued and outstanding at          
  June 30, 2017 and December 31, 2016, respectively       527       523  
  Additional paid-in capital       32,716,439       34,526,859  
  Accumulated deficit       (28,840,651 )     (32,004,561 )
  Accumulated other comprehensive income (loss)       7,018       4,205  
                     
  TOTAL STOCKHOLDERS' EQUITY       3,883,333       2,527,026  
                     
  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY       $ 12,645,799     $ 6,104,047  
                 
                 
The accompanying notes are an integral part of these condensed consolidated financial statements.  
                         
EXP WORLD HOLDINGS, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(UNAUDITED)  
                         
                         
                         
                         
    Three Months Ended June 30,     Six Months Ended June 30,  
    2017     2016     2017     2016  
                                 
Net revenues   $ 39,574,311     $ 13,282,028     $ 61,585,548     $ 20,424,840  
                                 
Operating expenses                                
  Cost of revenues     35,048,967       11,463,125       54,328,593       17,574,112  
  General and administrative     600,420       7,565,698       2,709,772       8,990,856  
  Professional fees     318,383       130,018       682,843       273,393  
  Sales and marketing     348,823       122,285       650,045       199,428  
                                 
  Total expenses     36,316,593       19,281,126       58,371,253       27,037,789  
                                 
Net income (loss) from operations     3,257,718       (5,999,098 )     3,214,295       (6,612,949 )
                                 
Other income and (expenses)                                
  Other income     -       439       -       446  
  Interest expense     (3,762 )     -       (2,047 )     -  
                                 
  Total other income and (expenses)     (3,762 )     439       (2,047 )     446  
                                 
Income (loss) from before income tax expense     3,253,956       (5,998,659 )     3,212,248       (6,612,503 )
                                 
Income tax expense     (23,747 )     (13,968 )     (48,338 )     (25,571 )
                                 
Net income (loss)     3,230,209       (6,012,627 )     3,163,910       (6,638,074 )
                                 
Net loss attributable to non-controlling interest in subsidiary     -       6,720       -       12,300  
                                 
Net income (loss) attributable to common shareholders   $ 3,230,209     $ (6,005,907 )   $ 3,163,910     $ (6,625,774 )
                                 
Net income (loss) per share attributable to common shareholders                                
  Basic from continuing operations   $ 0.06     $ (0.12 )   $ 0.06     $ (0.13 )
  Diluted from continuing operations   $ 0.05     $ (0.12 )   $ 0.05     $ (0.13 )
                                 
Weighted average shares outstanding                                
  Basic     52,749,086       50,940,460       52,583,658       50,779,114  
  Diluted     59,640,200       50,940,460       59,750,835       50,779,114  
                                 
                                 
The accompanying notes are an integral part of these condensed consolidated financial statements.  
   
US-GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA RECONCILIATION  
             
    Quarter Ended,  
Adjusted EBITDA reconciliation   Jun-16     Jun-17  
Net Income / (Loss)   $ (6,012,627 )   $ 3,230,209  
Interest     -       3,762  
Taxes     13,968       23,747  
Depreciation & Amortization     12,929       81,437  
Stock Compensation     482,984       2,229,767  
Stock Option     6,117,510       (3,932,894 )
Adjusted EBITDA   $ 614,764     $ 1,636,028