Exp World Holdings Leans on AI in 2026 Pivot

Exp World Holdings ((EXPI)) has held its Q4 earnings call. Read on for the main highlights of the call.

Exp World Holdings’ latest earnings call carried a cautiously upbeat tone, with management stressing resilient top-line growth, rapid international expansion and better agent productivity despite a tough real estate backdrop. While margin pressure, higher legal costs and a replatforming drag weighed on profitability, executives leaned heavily on AI-driven efficiencies and 2026 guidance to argue that the business is turning a corner.

International Expansion Fuels Revenue Growth

International operations were a standout, with revenue surging 67% year-over-year to $147 million as the company added seven new countries during 2025. Fourth-quarter international revenue jumped nearly 51%, and management highlighted that launch costs for new markets were 37% lower than prior efforts, signaling a more efficient go-to-market playbook.

Steady Top-Line Growth in a Soft Market

Total revenue for 2025 climbed 4% to $4.8 billion, while fourth-quarter growth accelerated to 9% year-over-year, reaching $1.2 billion. North America Realty remained the core engine, delivering $1.1 billion in Q4 and $4.6 billion for the full year, underscoring the resilience of the model even as the broader housing market remained challenged.

Rising Productivity and Transaction Momentum

Agent productivity improved as productivity per person reached 5.3 transactions for the year, with Q4 PPP up 6% year-over-year. Sales transactions rose 6% in the quarter, adding about 110,000 deals, and topped 440,000 for 2025, while transaction volume growth accelerated to 8% in Q4 and 5% for the full year.

Attrition Eases as Teams Drive Performance

Attrition trends turned meaningfully better, with worldwide agent attrition improving 17% and U.S. attrition down 23% year-over-year. Teams were a key lever, as agents on teams are roughly 78% more productive, and 40% of new agents in Q4 joined as part of a team, reinforcing the shift toward higher-output cohorts.

Agent Programs Boost Engagement and Retention

New programs gained traction, notably the co-sponsorship model now live in 28 countries, where 14% of new U.S. and Canadian agents joined with a co-sponsor. These agents proved attractive, showing 64% higher productivity and 19% lower attrition, while FastCAP, AI-infused training series and the FastATTRACT recruiting pilot all pointed to better agent onboarding and recruitment lift.

Solid Cash Position and Positive EBITDA

The company ended 2025 with $124.2 million in cash, maintaining a sizable liquidity cushion despite a more cautious capital allocation stance. Gross profit reached $333.6 million, and adjusted EBITDA stayed positive at $33.2 million for the year, even though it declined versus 2024 as investments and margin compression weighed on results.

Technology and AI Investments Reshape the Platform

Management spotlighted a growing technology stack, including the AI Copilot “Mira” embedded in My eXp, the eXp Hub workspace, expanded Live portal capabilities and listing intelligence tools. An App Store-style marketplace is also emerging, designed to personalize workflows and boost agent productivity, with early adoption around 13% of agents using eXp Hub.

Margins Squeezed by Capped-Agent Mix

Despite healthy 9% revenue growth in the fourth quarter, gross profit was flat year-over-year, reflecting tangible margin compression. Executives tied this to a rising mix of capped transactions as more productive agents hit their caps, a dynamic that supports top-line and volume but limits gross margin expansion.

Profitability Hit by Higher Costs and Investments

Exp World reported a 2025 operating loss of $21.5 million, including a $12.7 million loss in Q4, as expenses climbed. Adjusted EBITDA fell to $33.2 million for the year and $2.1 million in Q4, pressured by gross margin headwinds alongside stepped-up investments in technology and elevated legal costs.

SUCCESS Segment Drags During Rebuild

The SUCCESS business provided only modest revenue while generating a $6.2 million operating loss for 2025 as it underwent a significant retooling and replatforming effort. Management framed these losses as transitional, arguing that the rebuild is necessary to better align the segment with the company’s broader digital and education strategy.

Higher Q4 Operating Expenses and Event Spend

Fourth-quarter operating expenses moved higher, driven by spending on eXpcon events aimed at agent engagement and brand building, alongside increased legal costs in the U.S. Other cost lines saw reductions, but not enough to offset these spikes, keeping near-term profitability under pressure.

Conservative Capital Allocation and Buyback Pause

Capital returns were subdued as share repurchases were scaled back in 2025 to preserve cash, reflecting obligations related to an industry settlement and an internal minimum cash threshold of $100 million. Management emphasized financial flexibility over near-term buybacks, keeping options open for strategic investments as market conditions evolve.

Sluggish Agent Count Growth Masks Quality Shift

The company closed 2025 with 83,060 agents, only slightly higher than a year earlier, as the U.S. market contracted and industry membership fell. Most departing agents were low producers, with 63% of nonproductive leavers exiting the industry altogether, suggesting a slow but deliberate mix shift toward more productive agents.

Forward Guidance Signals Focus on Margin Expansion

For 2026, management is guiding to revenue between $4.85 billion and $5.15 billion and adjusted EBITDA of $50 million to $75 million, with operating expenses expected at $325 million to $345 million. The first quarter is slated for $960 million to $980 million in revenue and modest EBITDA, with leadership stressing that 2025 AI and platform investments should now translate into improved margins while keeping the balance sheet flexible.

Exp World’s call painted a picture of a platform business leaning into technology and international growth while working through the earnings drag of margin pressure and elevated expenses. For investors, the key debate will be whether AI-driven efficiencies, better agent quality and expanding global scale can deliver on the company’s 2026 EBITDA ambitions and eventually restore more robust profitability.