Exp World Holdings ((EXPI)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for eXp World Holdings painted a picture of both significant achievements and ongoing challenges. The company reported notable successes in agent growth, successful program launches, and international expansion. However, concerns were raised regarding decreased agent count year-over-year, increased operating expenses, and a declining gross margin. The overall sentiment was a mix of optimism for the future and acknowledgment of present hurdles.
Agent Growth and Retention
The first quarter since Q2 2024 saw a positive shift in agent growth for eXp World Holdings, with a sequential quarter-over-quarter increase in agent count. Notably, there was a 31% reduction in the number of agents leaving the company compared to the previous year in the U.S. Additionally, sales transactions per agent increased by 4% year-over-year, indicating improved productivity and retention efforts.
Successful Program Launches
The launch of several new programs, including the CRM of Choice, cosponsor program, and eXp Land & Ranch, was met with positive reception. Since its launch in April, the Land & Ranch division has attracted over 100 agents, highlighting the success and appeal of these initiatives.
International Expansion
International growth was a standout area for eXp World Holdings, with expansion into Peru, Turkey, and Ecuador, achieving record starts. Plans are underway to enter Egypt, Japan, and South Korea, furthering the company’s global footprint. The international markets saw a 59% year-over-year revenue growth, driven by increased agent productivity and a growing global agent base.
In-Person Event Success
The company experienced strong attendance and positive feedback at its regional rallies and eXpCon events in Canada and Barcelona. The international event in Barcelona notably doubled in size compared to the previous year, underscoring the growing interest and engagement in eXp’s offerings.
Strategic Investments in Technology
eXp World Holdings is making strategic investments in AI and automation to enhance productivity and efficiency. This includes collaborations with OpenAI and the development of custom GPTs. The cosponsorship program is nearing full automation, reflecting the company’s commitment to leveraging technology for operational excellence.
Decreased Agent Count
Despite the positive trends, the company reported a 5% year-over-year decrease in agent count, although there was a 1% increase quarter-over-quarter. This highlights an area of concern that the company is actively addressing.
Gross Margin Decline
The GAAP gross margin fell to 7.1%, a decrease of 40 basis points from the previous year. This decline was attributed to more productive agents reaching their cap, impacting the overall margin.
Operating Expenses Increase
Operating expenses grew by 20% during the quarter, including $6 million in strategic investments and severance costs. This increase reflects the company’s ongoing investments in growth and technology.
Continued Loss in International Segment
The international segment reported an increased adjusted EBITDA loss, driven by the costs associated with opening new markets and hosting concurrent events. This is an area where the company is focusing on improving efficiency and profitability.
Forward-Looking Guidance
Looking ahead, eXp World Holdings remains optimistic despite the challenging macroeconomic environment. The company reported a revenue of $1.3 billion in the second quarter of 2025, with a 1% year-over-year increase in real estate sales volume. The agent count stood at 82,704, marking a 5% year-over-year decrease but achieving a 1% sequential quarterly growth. Sales transactions per agent rose by 4% year-over-year, and the number of icon agents increased by 9%. The company also experienced a significant 22% reduction in agent turnover compared to the previous year. International operations saw a remarkable 59% revenue growth, driven by a 9% increase in the global agent base and enhanced agent productivity. Strategic investments in technology and AI, along with new program launches, are expected to continue driving positive trends.
In conclusion, eXp World Holdings’ earnings call highlighted a balanced mix of achievements and challenges. While the company made significant strides in agent growth, program launches, and international expansion, it also faced issues with decreased agent count, increased operating expenses, and declining gross margins. The forward-looking guidance suggests optimism for continued growth and improvement, driven by strategic investments and a robust platform.