Douglas Elliman (DOUG) - 2024 Q2 - Quarterly Results

Douglas Elliman Inc. Q2 2024 Financial Results Financial Highlights Douglas Elliman reported improved Q2 2024 results with increased revenues, narrower operating loss, and positive Adjusted EBITDA, though H1 2024 losses widened due to a litigation settlement charge Second Quarter 2024 Highlights Q2 2024 saw year-over-year growth in consolidated revenues, significantly narrowing operating and net losses, and achieving positive Adjusted EBITDA Q2 2024 Consolidated Financial Performance | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Consolidated Revenues | $285.8 million | $275.9 million | | Consolidated Operating Loss | $3.7 million | $8.3 million | | Net Loss attributed to Douglas Elliman | $1.7 million | $5.2 million | | EPS (diluted) | ($0.02) | ($0.06) | | Adjusted EBITDA attributed to Douglas Elliman | $2.4 million | ($2.6 million) | - The real estate brokerage segment's gross transaction value was approximately $10.6 billion, up from $9.9 billion in the prior year quarter[1] - The average price per transaction for the real estate brokerage segment was $1.81 million in Q2 2024[1] First Half 2024 Highlights H1 2024 consolidated revenues were flat, but operating and net losses significantly increased due to a $17.75 million litigation settlement H1 2024 Consolidated Financial Performance | Metric | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Consolidated Revenues | $486.0 million | $489.9 million | | Consolidated Operating Loss | $45.1 million | $32.1 million | | Net Loss attributed to Douglas Elliman | $43.1 million | $22.8 million | | EPS (diluted) | ($0.52) | ($0.28) | | Adjusted EBITDA Loss attributed to Douglas Elliman | $15.9 million | $20.2 million | - Results for the first half of 2024 include a $17.75 million litigation settlement charge. Of this amount, $7.75 million was paid in June 2024, with up to two additional $5 million contingent payments possible through December 2027[2] - The real estate brokerage segment's gross transaction value for the first half was approximately $17.8 billion, compared to $17.2 billion in the prior year period[2] Management Commentary Management attributes Q2 performance to strong luxury markets and stabilizing home purchasing, confident in long-term growth as interest rates improve - The CEO attributes the Q2 2024 performance to the strength of luxury markets and the gradual stabilization of home purchasing activity[3] - Management believes the company is well-positioned to drive long-term growth and stockholder value as the interest rate environment improves[3] Financial Performance (GAAP) GAAP results show Q2 2024 improvement, but H1 2024 losses widened significantly due to a litigation settlement charge Three months ended June 30, 2024 Q2 2024 revenues increased to $285.8 million, with operating loss significantly narrowed to $3.7 million and net loss to $1.7 million Q2 2024 GAAP Financial Metrics | GAAP Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Revenues | $285.8 million | $275.9 million | | Operating Loss | $3.7 million | $8.3 million | | Net Loss | $1.7 million | $5.2 million | | Net Loss per Share | $0.02 | $0.06 | Six months ended June 30, 2024 H1 2024 revenues were $486.0 million, with operating and net losses widening significantly due to a $17.75 million litigation settlement charge H1 2024 GAAP Financial Metrics | GAAP Metric | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Revenues | $486.0 million | $489.9 million | | Operating Loss | $45.1 million | $32.1 million | | Net Loss | $43.1 million | $22.8 million | | Net Loss per Share | $0.52 | $0.28 | - The results for the six months ended June 30, 2024, include a $17.75 million litigation settlement charge[4] Financial Performance (Non-GAAP) Non-GAAP results show improved operational efficiency, with Q2 2024 Adjusted EBITDA turning positive and H1 2024 loss narrowing Three months ended June 30, 2024 (Non-GAAP) Q2 2024 Adjusted EBITDA was $2.4 million, a significant improvement from a prior-year loss, with brokerage segment Adjusted EBITDA more than doubling Q2 2024 Non-GAAP Financial Metrics | Non-GAAP Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Adjusted EBITDA (Consolidated) | $2.4 million | ($2.6 million) | | Adjusted EBITDA (Brokerage Segment) | $6.6 million | $2.5 million | | Adjusted Net Loss | $1.1 million | $4.9 million | | Adjusted Net Loss per Share | $0.01 | $0.06 | Six months ended June 30, 2024 (Non-GAAP) H1 2024 Adjusted EBITDA loss improved to $15.9 million, with the brokerage segment's loss also narrowing, though Adjusted Net Loss widened slightly H1 2024 Non-GAAP Financial Metrics | Non-GAAP Metric | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Adjusted EBITDA Loss (Consolidated) | $15.9 million | $20.2 million | | Adjusted EBITDA Loss (Brokerage Segment) | $7.6 million | $10.5 million | | Adjusted Net Loss | $24.8 million | $21.6 million | | Adjusted Net Loss per Share | $0.30 | $0.27 | Operational Metrics & Balance Sheet The brokerage segment achieved year-over-year growth in gross transaction value for Q2 and H1 2024, maintaining a strong cash position Gross Transaction Value (GTV) | Metric | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | Gross Transaction Value (in billions) | $10.6 | $9.9 | $17.8 | $17.2 | - The average price per transaction was $1.81 million for Q2 2024 and $1.72 million for the first six months of 2024[7] - The company maintained a strong balance sheet with cash and cash equivalents of $92.9 million at June 30, 2024[8] Financial Statements Detailed financial tables present consolidated statements of operations, non-GAAP reconciliations, and key operational metrics including gross transaction value Condensed Consolidated Statements of Operations (Table 1) This table details revenues, expenses, and profitability, highlighting a $17.75 million litigation settlement expense in H1 2024, leading to a higher operating loss Condensed Consolidated Statements of Operations (in Thousands) | (In Thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $285,751 | $275,912 | $485,990 | $489,894 | | Operating loss | $(3,673) | $(8,297) | $(45,137) | $(32,105) | | Litigation settlement | $— | $— | $17,750 | $— | | Net loss attributed to Douglas Elliman Inc. | $(1,664) | $(5,219) | $(43,139) | $(22,843) | | Net loss per diluted share | $(0.02) | $(0.06) | $(0.52) | $(0.28) | Reconciliation of Adjusted EBITDA (Table 2) This table reconciles net loss to Adjusted EBITDA, detailing adjustments and segment breakdown, highlighting the brokerage segment's return to positive Adjusted EBITDA in Q2 2024 Reconciliation of Adjusted EBITDA (in Thousands) | (In Thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Net loss attributed to Douglas Elliman Inc. | $(1,664) | $(5,219) | $(43,139) | $(22,843) | | Adjusted EBITDA attributed to Douglas Elliman Inc. | $2,359 | $(2,562) | $(15,887) | $(20,207) | | Real estate brokerage segment Adjusted EBITDA | $6,632 | $2,481 | $(7,566) | $(10,503) | | Corporate and other segment Adjusted EBITDA | $(4,273) | $(5,043) | $(8,321) | $(9,704) | Reconciliation of Adjusted Net Loss (Table 3) This table adjusts GAAP net loss for non-recurring items, primarily the $17.75 million litigation settlement, to derive Adjusted Net Loss for the period Reconciliation of Adjusted Net Loss (in Thousands) | (In Thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Net loss attributed to Douglas Elliman Inc. | $(1,664) | $(5,219) | $(43,139) | $(22,843) | | Litigation settlement adjustment | $— | $— | $17,750 | $— | | Adjusted net loss attributed to Douglas Elliman Inc. | $(1,066) | $(4,867) | $(24,791) | $(21,649) | | Adjusted net loss per diluted share | $(0.01) | $(0.06) | $(0.30) | $(0.27) | Reconciliation of Revenues and Operational Data (Table 4) This table presents revenue components and key operational metrics, showing increased Gross Transaction Value for Q2 and H1 2024 despite a slight decrease in total transactions Reconciliation of Revenues and Operational Data | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Gross transaction value (in billions) | $10.6 | $9.9 | $17.8 | $17.2 | | Total transactions | 5,885 | 6,038 | 10,362 | 10,671 |