Core Insights - Villa Spectre has set a new record as the highest-priced sale in Delray Beach, closing at approximately $55 million, handled by renowned real estate agent Senada Adžem of Douglas Elliman [1][9]. Company Overview - Douglas Elliman Inc. is one of the largest residential brokerage companies in the United States, with operations across multiple states including New York, Florida, California, and Texas [10]. - The company also invests in early-stage property technology solutions and provides various real estate services such as development marketing and property management [10]. Property Features - Villa Spectre spans 21,725 square feet on 2.5 acres of lakefront property, designed by Aldo Stark of Prestige Design Homes, blending modern European elegance with exclusivity [2][3]. - The estate includes six-bedroom suites, two grand primary suites, a sophisticated executive office, and a grand salon with a 20-person dining table [4][5]. - Amenities include a Bulgari-inspired spa, state-of-the-art home theater, dual gourmet kitchens, and extensive outdoor entertainment facilities such as a resort-style pool, basketball court, and private soccer field [6][7][8].

Financial Performance - Total transactions for the last twelve months ended September 30, 2024, were 21,466, an increase from 16,444 in the previous nine months[112] - Gross transaction value reached $35.5 billion, up from $27.6 billion in the previous nine months[112] - Average transaction value per transaction was $1,655.3 thousand, slightly down from $1,679.1 thousand in the previous nine months[112] - Revenue for the three months ended September 30, 2024, was $266,316, an increase of $14,768 (5.9%) compared to $251,548 for the same period in 2023[122] - Revenues for the nine months ended September 30, 2024, were $752,306, an increase of $10,864 compared to $741,442 for the same period in 2023[129] Operating Loss and Expenses - Net loss attributed to Douglas Elliman Inc. was $(85,162) thousand, compared to $(70,319) thousand in the previous nine months[112] - Adjusted EBITDA attributed to Douglas Elliman was $(34,792) thousand, worsening from $(17,333) thousand in the previous nine months[112] - Operating loss for the real estate brokerage segment was $(48,305) thousand, compared to $(31,885) thousand in the previous nine months[118] - Operating loss for the nine months ended September 30, 2024, was $52,568, compared to $40,926 for the same period in 2023, reflecting an increase of $11,642[129] - Operating expenses for the three months ended September 30, 2024, were $273,747, an increase of $13,378 (5.1%) from $260,369 in 2023[122] - Operating expenses for the nine months ended September 30, 2024, were $804,874, an increase of $22,506 from $782,368 in 2023[129] Commissions and Agent Metrics - Real estate agent commissions increased to $199,133, representing 74.8% of total revenues for the three months ended September 30, 2024, compared to 73.9% in the same period of 2023[125] - Real estate agent commissions expense was $564,606 for the nine months ended September 30, 2024, an increase of $17,857 from $546,749 in 2023, representing 75.1% of revenues[132] - The number of Principal Agents as of September 30, 2024, was 5,062, a decrease from 5,307 in the previous nine months[112] - Annual retention rate decreased to 87% from 92%[112] Cash Flow and Liquidity - Cash, cash equivalents, and restricted cash increased by $27,746 to $157,263 as of September 30, 2024[136] - Cash used in operations decreased to $16,987 for the nine months ended September 30, 2024, from $27,773 in 2023[136] - Cash provided by financing activities was $46,742 for the nine months ended September 30, 2024, compared to cash used of $4,233 in 2023[138] - As of September 30, 2024, the company had cash and cash equivalents of approximately $151,416, which is expected to meet liquidity needs over the next twelve months[139] - The company anticipates that cash flows from operations and financing will be sufficient to meet liquidity needs, despite potential acquisitions[139] Litigation and Settlements - The company recognized an expense of $17,750 related to a litigation settlement during the nine months ended September 30, 2024[120] - The company entered into a settlement agreement for $7,750 to resolve claims in class action litigations, with additional contingent payments of $10,000 due by December 31, 2027[139] - Management cannot predict cash requirements related to future settlements or judgments from ongoing litigation, which could materially affect financial position[139] Market Risks and Forward-Looking Statements - The company is exposed to market risks from fluctuations in interest rates and may face future risks from foreign currency exchange rates and equity prices[143] - Forward-looking statements indicate risks from economic conditions, litigation, and regulatory changes that could impact future performance[148] Corporate Actions - The company issued $50,000 in senior secured convertible notes on July 2, 2024, with an interest rate of 7.0% per annum[120] - The company plans to use the net proceeds from the convertible notes for general corporate purposes[120] - The company issued $50,000 in Convertible Notes due 2029, bearing interest at 7.0% per annum, with an option for 8.0% paid in kind[139] Other Financial Metrics - Other losses amounted to $20,018 for the three months ended September 30, 2024, compared to income of $1,822 for the same period in 2023[122] - Other loss for the nine months ended September 30, 2024, was $16,978, compared to income of $4,226 for the same period in 2023[129] - Adjusted EBITDA for the nine months ended September 30, 2024, was $(4,100), an improvement from $(9,031) in 2023[129] - Escrow funds administered by a subsidiary amounted to $36,061 as of September 30, 2024, down from $41,338 at the end of 2023[142] - The company has approximately $3,000 of letters of credit outstanding as of September 30, 2024, collateralized by certificates of deposit[140] - The company remains contingently liable for the disposition of escrow deposits, which are not considered assets on the balance sheet[142]

Core Viewpoint - Douglas Elliman Inc. is undergoing a transformation and growth phase under the leadership of newly appointed Chairman and CEO Michael Liebowitz, focusing on diversification and strategic initiatives [5]. Group 1: Company Leadership - Michael Liebowitz has been named Chairman and CEO, indicating a significant leadership change aimed at steering the company through a new chapter [5]. - Bryant Kirkland serves as the Chief Financial Officer, supporting the financial strategy of the company [5]. Group 2: Earnings Call Details - The earnings conference call is being recorded and will be available for one year on the company's Investor Relations website [1]. - The call will discuss non-GAAP financial measures such as adjusted EBITDA and adjusted net loss, which are important for understanding the company's financial performance [2].

Financial Data and Key Metrics Changes - Douglas Elliman reported revenues of $266.3 million for Q3 2024, an increase from $251.5 million in Q3 2023 [17] - The net loss attributed to Douglas Elliman for Q3 2024 was $27.2 million, or $0.33 per diluted share, compared to a net loss of $4.9 million, or $0.06 per diluted share in Q3 2023 [18] - Adjusted EBITDA for Q3 2024 was a loss of $1.4 million, an improvement from a loss of $3 million in Q3 2023 [19] - For the nine months ended September 30, 2024, revenues were $752.3 million, up from $741.4 million in the same period of 2023 [20] - The net loss for the nine months ended September 30, 2024, was $70.3 million, or $0.84 per diluted share, compared to a net loss of $27.7 million, or $0.34 per diluted share in 2023 [20] Business Line Data and Key Metrics Changes - The real estate brokerage segment reported an operating income of $454,000 in Q3 2024, compared to an operating loss of $2 million in Q3 2023 [19] - Adjusted EBITDA for the real estate brokerage segment was income of $3.8 million in Q3 2024, compared to $1.5 million in Q3 2023 [19] - For the nine months ended September 30, 2024, the real estate brokerage segment reported an operating loss of $31.9 million, compared to a loss of $20.3 million in the same period of 2023 [21] Market Data and Key Metrics Changes - The average price per home sale transaction increased to $1.6 million in Q3 2024, up from $1.57 million in Q3 2023 [12] - Year-to-date average price per home sale transaction was $1.68 million, compared to $1.6 million in the 2023 period [12] - Listing volume increased by 6% in Q3 2024 compared to the prior year period [12] - The development marketing division has a pipeline of approximately $26.8 billion in gross transaction value, with $16.4 billion located in Florida [13] Company Strategy and Development Direction - The company aims to grow and diversify its business through strategic M&A, focusing on complementary acquisitions in ancillary businesses such as title, escrow, and property management [9] - The management emphasizes the importance of ROI in all business dealings and plans to enhance agent collaboration and diversification [23][24] - The company is optimistic about future growth opportunities, particularly in the context of a changing political landscape and potential easing of regulations [35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning, noting that they are less sensitive to interest rate changes due to a higher percentage of cash buyers [32] - The management anticipates increased market activity following the recent election, which could spur homebuilding and sales [35] - The company believes it is well-positioned to capitalize on the underbuilt housing market in the U.S. [35] Other Important Information - The company maintained liquidity with cash and cash equivalents of approximately $151.4 million as of September 30, 2024 [17] - A significant non-cash charge of $20.2 million was recorded due to a change in the fair value of a derivative embedded within convertible debt [18][28] Q&A Session Summary Question: Can you explain the charge from the embedded derivative change in the convertible debt? - The charge was primarily due to a 71% increase in the company's stock price, which led to a non-cash charge of $20.2 million [27][28] Question: How do you see the impact of interest rates on your markets? - The company believes it is better positioned than peers due to a higher percentage of cash buyers and anticipates that additional rate cuts could benefit the market [32] Question: What ROI targets are being set for investments? - The company is still discussing ROI targets but emphasizes quality over quantity in agent recruitment and aims to enhance profitability through existing agents [39][40]

Financial Performance - Douglas Elliman Inc. reported a quarterly loss of $0.08 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.04, and compared to a loss of $0.06 per share a year ago, indicating a significant earnings surprise of -100% [1] - The company posted revenues of $266.32 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 11.34%, and showing an increase from year-ago revenues of $251.55 million [2] - Over the last four quarters, the company has surpassed consensus revenue estimates two times [2] Stock Performance - Douglas Elliman Inc. shares have declined approximately 34.6% since the beginning of the year, contrasting with the S&P 500's gain of 24.3% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.06 on revenues of $240.34 million, and for the current fiscal year, it is -$0.55 on revenues of $976 million [7] Industry Outlook - The Real Estate - Operations industry, to which Douglas Elliman Inc. belongs, is currently ranked in the bottom 46% of over 250 Zacks industries, suggesting potential challenges ahead [8] - The performance of Douglas Elliman Inc. may be influenced by the overall outlook for the industry, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Financial Performance - Douglas Elliman reported Q3 2024 revenues of $266.3 million, a 5.7% increase from $251.5 million in Q3 2023[2] - For the nine months ended September 30, 2024, revenues were $752.3 million, up from $741.4 million for the same period in 2023[3] - Total revenues for Q3 2024 reached $266.3 million, a 5.3% increase from $251.5 million in Q3 2023[14] - Total revenues for the nine months ended September 30, 2024, were $752.3 million, a 1.5% increase from $741.4 million for the same period in 2023[14] - Total revenues for the three months ended September 30, 2024, were $966.44 million, a slight increase from $955.58 million in the same period of 2023, representing a growth of approximately 1.3%[17] Losses and Expenses - The company recorded an operating loss of $7.4 million in Q3 2024, an improvement from the $8.8 million loss in Q3 2023[2] - Net loss attributed to Douglas Elliman for Q3 2024 was $27.2 million, or $0.33 per diluted share, compared to a net loss of $4.9 million, or $0.06 per diluted share in Q3 2023[2] - The company recorded an operating loss of $52.6 million for the nine months ended September 30, 2024, compared to a loss of $40.9 million for the same period in 2023[3] - Adjusted Net Loss for the nine months ended September 30, 2024 was $31.3 million, or $0.38 per diluted share, compared to $26.4 million, or $0.32 per diluted share in the same period of 2023[6] - Adjusted net loss attributed to Douglas Elliman Inc. was $6.51 million for the three months ended September 30, 2024, compared to an adjusted net loss of $4.72 million in the same period of 2023[16] - Adjusted net loss per diluted common share was $0.08 for the three months ended September 30, 2024, compared to $0.06 in the same period of 2023[16] Transaction and Revenue Details - Gross transaction value for Q3 2024 was approximately $9.8 billion, compared to $9.3 billion in Q3 2023[7] - Real estate agent commissions increased to $199.1 million in Q3 2024, up from $185.8 million in Q3 2023[14] - Commissions and other brokerage income increased to $254.1 million in Q3 2024, up 6.2% from $239.3 million in Q3 2023[14] - Commissions and other brokerage income for the three months ended September 30, 2024, was $916.94 million, compared to $906.07 million in the same period of 2023, reflecting an increase of approximately 1%[17] - Property management revenue increased to $36.39 million for the three months ended September 30, 2024, from $35.54 million in the same period of 2023, marking a growth of approximately 2.4%[17] - Other ancillary services revenue decreased to $13.11 million for the three months ended September 30, 2024, from $13.97 million in the same period of 2023, a decline of about 6.2%[17] Adjusted Metrics - Adjusted EBITDA for Q3 2024 was a loss of $1.4 million, an improvement from a loss of $3.0 million in Q3 2023[5] - Adjusted EBITDA for Q3 2024 was $(1.6) million, an improvement from $(3.2) million in Q3 2023[15] Cash and Investments - Douglas Elliman maintained cash and cash equivalents of $151.4 million as of September 30, 2024[8] - The company is exploring complementary acquisitions in ancillary businesses and expanding its property management business into Florida[1] Other Financial Metrics - The company reported a change in fair value of derivatives embedded within convertible debt of $(20.2) million in Q3 2024[15] - Operating loss for the real estate brokerage segment was $48.3 million in Q3 2024, compared to $36.8 million in Q3 2023[15] - Technology expenses rose to $6.0 million in Q3 2024, compared to $5.6 million in Q3 2023[14] - Interest expense decreased to $1.5 million in Q3 2024 from $4,000 in Q3 2023[14] - The company recorded total transactions of 21,466 for the three months ended September 30, 2024, slightly down from 21,606 in the same period of 2023[17] - The total adjustments for the three months ended September 30, 2024, amounted to $20.67 million, compared to $215, indicating significant restructuring and litigation settlements[16]

Financial Data and Key Metrics Changes - Douglas Elliman reported revenues of $285.8 million for Q2 2024, an increase from $275.9 million in Q2 2023, representing a growth of approximately 4% [10] - The net loss attributed to Douglas Elliman for Q2 2024 was $1.7 million, or $0.02 per diluted share, compared to a net loss of $5.2 million, or $0.06 per diluted share in Q2 2023 [10] - Adjusted EBITDA for Q2 2024 was $2.4 million, compared to a loss of $2.6 million in Q2 2023 [10] - For the first half of 2024, revenues were $486 million, down from $489.9 million in the prior year period [11] Business Line Data and Key Metrics Changes - The real estate brokerage segment reported an operating income of $2.9 million in Q2 2024, compared to an operating loss of $1 million in Q2 2023 [10] - The real estate brokerage segment's adjusted EBITDA was $6.6 million in Q2 2024, up from $2.5 million in Q2 2023 [10] - Listing volume increased by 23% in Q2 2024 compared to the prior year period, indicating strong performance in luxury markets [7] Market Data and Key Metrics Changes - Average daily cash receipts from existing home sales in July 2024 increased by approximately 12% compared to July 2023, indicating a positive trend in the market [5] - The average sales price per transaction remained at $1.81 million in Q2 2024, reflecting the strength of luxury markets [8] Company Strategy and Development Direction - The company received a $50 million growth investment from Kennedy Lewis, positioning it for strategic growth and expansion [3][4] - Douglas Elliman is focusing on market expansion in no-income tax states, with significant activity in Florida and Texas [18][22] - The company aims to enhance operational efficiencies and recruit outstanding talent while adopting innovative solutions to empower agents [13] Management's Comments on Operating Environment and Future Outlook - Management noted that generationally high interest rates have led to sustained inventory shortages, impacting transaction volumes [4] - Despite industry challenges, management expressed optimism about recent improvements and the potential for increased transaction volumes as the market adjusts to higher interest rates [5] - Management believes the company is well-positioned to weather potential economic downturns and continue leading the luxury real estate market [30] Other Important Information - The company has maintained ample liquidity with cash and cash equivalents of approximately $92.9 million as of June 30, 2024 [11] - Cost reduction efforts have led to a decrease in operating expenses by approximately 7.9% in the first half of 2024 compared to the prior year [9] Q&A Session Summary Question: Inventory increase in core markets - Management indicated that agents report buyers are waiting for potential rate cuts, which has slowed transaction growth despite increased inventory [15] Question: Impact of cash receipts on future revenue - Management explained that while cash receipts are up 12%, revenue recognition occurs upon sale completion, suggesting positive future revenue potential [16] Question: Capital raise deployment - Management clarified that expansion efforts will focus on no-income tax states and may involve collaborations with developers rather than acquisitions [18][19] Question: Managing expenses with potential volume increases - Management stated that they can scale expenses as revenues return, emphasizing a focus on enhancing agent experience [20][21] Question: Dynamics of commission splits - Management noted that changes in commission splits are influenced by market mix and significant high-value transactions, which can lower margins but increase absolute gross profit [24][25] Question: Market share gains - Management confirmed that record-breaking sales and a strong agent base contributed to market share gains, with the average sale significantly higher than industry peers [27][28] Question: Macro backdrop and recession concerns - Management expressed confidence in the company's ability to weather potential recessions, citing a strong position in the luxury market [30] Question: Strategic market expansion - Management discussed plans for expansion through new development projects in various states without incurring significant costs [31][32]

Financial Performance - Total transactions for the last twelve months ended June 30, 2024, were 21,297, compared to 21,606 for the year ended December 31, 2023, reflecting a decrease of approximately 1.4%[87] - Gross transaction value reached $35.0 billion for the last twelve months ended June 30, 2024, up from $34.4 billion for the year ended December 31, 2023, indicating an increase of about 1.7%[87] - Average transaction value per transaction was $1,642.7 thousand for the last twelve months ended June 30, 2024, compared to $1,592.3 thousand for the year ended December 31, 2023, representing an increase of approximately 3.2%[87] - Revenues for the three months ended June 30, 2024, were $285,751, an increase of $9,839 from $275,912 in the same period in 2023[95] - Revenues for the six months ended June 30, 2024, were $485,990, a decline of $3,904 compared to $489,894 in the same period of 2023[102] Operating Loss and Expenses - Net loss attributed to Douglas Elliman Inc. was $(62,848) thousand for the last twelve months ended June 30, 2024, compared to $(42,552) thousand for the year ended December 31, 2023, reflecting an increase in loss of approximately 47.7%[87] - The operating loss for the real estate brokerage segment was $(50,751) thousand for the last twelve months ended June 30, 2024, compared to $(36,769) thousand for the year ended December 31, 2023, indicating a worsening of approximately 37.9%[90] - Operating loss increased to $45,137 for the six months ended June 30, 2024, compared to $32,105 for the same period in 2023, primarily due to a litigation settlement of $17,750[103] - General and administrative expenses decreased to $39,073 for the six months ended June 30, 2024, down from $49,806 in 2023, due to personnel reductions and lower incentive compensation[106] - Operating expenses in the real estate brokerage segment decreased by approximately $11,300 (7.9%) for the six months ended June 30, 2024, compared to the same period in 2023[92] Adjusted EBITDA - Adjusted EBITDA attributed to Douglas Elliman was $(36,373) thousand for the last twelve months ended June 30, 2024, compared to $(40,693) thousand for the year ended December 31, 2023, showing an improvement in EBITDA loss of about 10.5%[90] - Adjusted EBITDA for the real estate brokerage segment was $6,632 for the three months ended June 30, 2024, compared to $2,481 in the same period in 2023[95] Agent Commissions - Real estate agent commissions increased to $216,457 (75.8% of revenues) for the three months ended June 30, 2024, up from $204,802 (74.2% of revenues) in 2023[98] - Real estate agent commissions expense was $365,473 for the six months ended June 30, 2024, up from $360,904 in 2023, representing 75.2% of revenues compared to 73.7% in the prior year[106] Corporate Actions and Investments - The company continues to invest in PropTech opportunities through its New Valley Ventures subsidiary, indicating a strategic focus on market expansion and innovation[84] - The company issued $50,000 in senior secured convertible notes with a 7.0% interest rate, convertible at $1.50 per share, to be used for general corporate purposes[92] - The company issued $50,000 in Convertible Notes on July 2, 2024, with an interest rate of 7.0% per annum, potentially increasing to 8.0% if paid in kind[114] Settlement and Legal Matters - A settlement agreement was reached for $17,750 related to litigation, with $7,750 paid upfront and two contingent payments of $5,000 each due by December 31, 2027[92] - The company entered into a settlement agreement for $7,750 to resolve class action litigations, with additional contingent payments of $10,000 due by December 31, 2027[114] - The company recognized an expense of $17,750 related to the settlement for the six months ended June 30, 2024[114] Cash and Liquidity - Cash, cash equivalents, and restricted cash decreased by $26,613 to $102,904 as of June 30, 2024[109] - Cash used in operations was $25,973 for the six months ended June 30, 2024, compared to $23,140 in 2023, reflecting lower operating income[109] - As of June 30, 2024, the company had cash and cash equivalents of approximately $92,864, which is expected to meet liquidity needs over the next twelve months[114] - The company anticipates that cash flows from operations and financing will be sufficient to meet liquidity needs, despite potential acquisitions[114] Market Risks - The company is exposed to market risks from interest rate fluctuations and may face future risks from foreign currency exchange rates and equity prices[118] - The company faces various risks including economic conditions, litigation outcomes, and regulatory changes that could materially affect its financial position[122] Headcount and Operational Changes - The company reduced its headcount by approximately 100 employees in 2023 as part of ongoing expense reduction programs[92] Escrow and Contingent Liabilities - Escrow funds held by the company's subsidiary amounted to $34,314 as of June 30, 2024, down from $41,338 at the end of 2023[117] - The company remains contingently liable for the disposition of escrow deposits, which are not included in the balance sheets[117]

FOR IMMEDIATE RELEASE Contact: Stephen Larkin, Douglas Elliman Inc. 917-902-2503 Columbia Clancy/Catherine Livingston, FGS Global, 212-687-8080 J. Bryant Kirkland III, Douglas Elliman Inc. 305-579-8000 DOUGLAS ELLIMAN INC. REPORTS SECOND QUARTER 2024 FINANCIAL RESULTS Second Quarter 2024 Highlights: • Consolidated revenues of $285.8 million, compared to $275.9 million in the prior year quarter ◦ Douglas Elliman's real estate brokerage segment's gross transaction value was approximately $10.6 billion, compar ...

Douglas Elliman Inc. (DOUG) came out with a quarterly loss of $0.01 per share versus the Zacks Consensus Estimate of a loss of $0.02. This compares to loss of $0.06 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 50%. A quarter ago, it was expected that this company would post a loss of $0.02 per share when it actually produced a loss of $0.28, delivering a surprise of -1,300%. Over the last four quarters, the company has sur ...