eXp World (EXPI) Q2 Profit Falls 113%

Core Insights - eXp World reported Q2 2025 revenue of $1.31 billion, slightly above analyst estimates, but EPS fell to $(0.01), missing expectations of $0.10 [1][2] - The company experienced modest revenue growth of 0.8% year-over-year, but profitability declined significantly due to increased operational costs and a net loss of $2.3 million [5][6] Financial Performance - Revenue (GAAP) for Q2 2025 was $1.31 billion, compared to $1.30 billion in Q2 2024, reflecting a 0.8% increase [2] - EPS (GAAP) was $(0.01), down from $0.08 in Q2 2024, marking a 112.5% decline [2] - Adjusted EBITDA fell 65.9% year-over-year to $11.2 million from $32.8 million [2][5] - Adjusted operating costs increased by 20% to $95.0 million due to investments in technology and operational streamlining [5] Business Model and Strategy - eXp World operates as a cloud-based real estate brokerage, focusing on technology to connect agents globally, which allows for scalability and cost benefits [3] - The company is concentrating on five key areas: technology platform development, international expansion, agent-centric programs, regulatory compliance, and sustainability [4] Operational Metrics - The number of agents and brokers decreased by 5% to 82,704, while total real estate transactions fell by 2% to 118,612 [6] - Despite lower agent counts, real estate sales volume increased by 1% to $52.5 billion, indicating higher productivity per agent [6] Cash Flow and Capital Expenditures - Cash and cash equivalents decreased from $108.4 million to $94.6 million due to a $17.0 million antitrust settlement and increased operational costs [7][10] - Adjusted operating cash flow dropped 77.8% year-over-year to $13.4 million [7][10] - Total assets rose to $481.2 million, with equity at $218.4 million as of June 30, 2025 [11] Future Outlook - Management did not provide specific financial guidance but emphasized long-term growth through technology and international expansion [12] - Key trends to monitor include agent productivity, cost management, and performance in international markets [13]