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]

Financial Data and Key Metrics Changes - The company generated $954.9 million in revenue for Q1 2025, reflecting a 4% increase in real estate sales volume driven by higher home sales prices and increased productivity in the international segment [44] - The agent count decreased to 81,904, but there was an increase in transactions per agent, indicating the retention of high-performing agents [44] - Non-GAAP gross margin was 13%, down 70 basis points year-over-year, while GAAP gross margin was 8%, down 30 basis points year-over-year [46][47] - Adjusted EBITDA was $2.2 million, down year-over-year due to margin compression and increased investments in the agent value stack [47] Business Line Data and Key Metrics Changes - North America Realty segment generated $923 million in revenue with an adjusted EBITDA of $7.7 million, remaining the largest revenue and profit generator [49] - International segment revenue increased by 103% year-over-year, with a significant narrowing of adjusted EBITDA loss, improving by 52% year-over-year [50] - The affiliated services segment, primarily success, showed modest revenue growth with an adjusted EBITDA loss of $1.5 million [50] Market Data and Key Metrics Changes - The company launched operations in Peru and Turkey, with plans for Egypt, aiming for 50,000 agents across 50 countries by 2030 [15][19] - The international expansion strategy has been refined to include localized marketing and partnerships, leading to successful launches and agent onboarding [16][19] Company Strategy and Development Direction - The company aims to build the most agent-centric real estate brokerage globally, focusing on interconnected platform business units [7][11] - Investments in technology and AI are emphasized, with a belief that returns will manifest in future periods [10][11] - The strategy includes a focus on high-income and emerging markets, utilizing self-managed regional teams for scalability [15][16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the tough macroeconomic environment but expressed confidence in the company's ability to attract and retain high-performing agents [44][48] - The leadership team is actively reviewing expenses and building plans for more efficient operations in the latter half of 2025 [48][80] - The company is focused on leveraging AI and automation to enhance operational efficiency and reduce costs [78][80] Other Important Information - The company was recognized as the number one company in the U.S. by transactions for the third consecutive year and ranked 18th on USA Today's top workplaces list [30][31] - The introduction of the cosponsorship program aims to enhance agent collaboration and support, driving growth and connections among agents [27][75] Q&A Session Summary Question: Can you share more details on how eXp is leveraging AI now and what an enabled eXp platform might look like in the future? - The company has been pivoting towards rapid changes with AI, utilizing tools from OpenAI and Google Workspace to enhance operations and tech stack development [57][59] Question: What did you learn about opening new countries, and how do today's launches differ from a year ago? - The company has evolved its approach to international launches by focusing on local leadership, understanding market pain points, and leveraging technology for streamlined operations [64][66] Question: Can you dive deeper into the agent count trends? - The company continues to retain productive agents, with a focus on teams that are 67% more productive than individual agents, leading to improved agent attrition metrics [69][70] Question: What are agents saying about the cosponsored program? - Agents are excited about the cosponsor program, which fosters collaboration and connections, enhancing growth opportunities for both new and existing agents [73][75] Question: How should we think about operating expenses for the remainder of the year? - The company does not flex costs dramatically but can adjust spending in specific areas based on market conditions, focusing on efficiency and automation to improve unit economics [76][80]