EXP World Holdings INC (NASDAQ: EXPI)
Headquarters: Bellingham, WA
Employees End of 2Q 2020: 571
Shares outstanding: 68.5M Float: 26.7M
Insider Holdings: 58%
Market Cap: 2.7B
eXp World Holdings, Inc. is the holding company for a number of companies most notably eXp Realty. As a full-service real estate brokerage, eXp Realty provides 24/7 access to collaborative tools, training, and socialization for real estate brokers and agents through its 3-D, fully-immersive, cloud office environment. eXp Realty and eXp Realty of Canada also feature an aggressive revenue sharing program that pays agents a percentage of gross commission income earned by fellow real estate professionals who they attract into the Company.
Through various operating subsidiaries, the Company primarily operates a cloud-based real estate brokerage operating throughout the United States and most of the Canadian provinces, as well as an emerging innovation and technology services company that supports the real estate brokerage operations and third party customers operating in a number of industries. In the fourth quarter of 2019, the Company began real estate brokerage operations in the United Kingdom (U.K.) and Australia. The Company focuses on a number of cloud-based technologies in order to grow an international brokerage without the burden of physical bricks and mortar or redundant staffing costs. eXp World Technologies, LLC, a wholly-owned direct subsidiary of the Company, represents its innovation and technology division, which now holds the VirBELA brand. VirBELA is an immersive technology platform for businesses, events, and education that provides a virtual experience for workers, attendees, students, and other users to communicate, collaborate, meet, and socialize.
-Second-quarter 2020 Financial Results Summary
-Revenue increased 33% in the second quarter of 2020 to $354 million, compared to $267 million in the second quarter of 2019.
-Gross profit grew 55% to $34.4 million in the second quarter of 2020, compared to $22.1 million in the second quarter of 2019. Gross profit is calculated as revenues less commission and other agent-related costs.
-Net income was $8.3 million, or $0.11 per diluted share in the second quarter of 2020, compared to a net loss of $2.2 million, or $(0.04) per diluted share, in the second quarter of 2019.
-Adjusted EBITDA (a non-GAAP financial measure) was $13.6 million in the second quarter of 2020, compared to $3.8 million in the second quarter of 2019.
-Cash flow from operations increased 57% to $28.5 million in the second quarter of 2020, compared to $18.1 million in the second quarter of 2019.
exp Realty is Global “Cloud-based” Real Estate Brokerage
Real Estate Brokerage - eXp Realty launched in October 2009 with a small number of real estate agents in two states and ended the fiscal year 2019 with a team of over 25,400 real estate professionals, operating throughout the United States and most of the Canadian provinces. In the fourth quarter of 2019, we expanded operations in the United Kingdom (U.K.) and Australia. Except for certain employees who hold active real estate licenses, virtually all of our real estate professionals are independent contractors.
-Accounts for the majority of EXPI revenue and earnings
-Delivers a unique agent value proposition, including an attractive commission structure, revenue share and equity
-Cost advantages of a virtual workplace vs traditional “bricks and mortar”
-Currently operating in the US, Canada, UK and Australia
2018-2020 Glassdoor Best Places to Work
32k+ Real Estate Professionals
1 of fastest growing real estate brands in North America due to their unique growth model which is a cloud based brokerage allowing for rich compensation structure for agents.
The revenue sharing program attracts agents to the brokerage, highly attractive commission structure. Agent receives an 80/20 split on first $80k gross commission income and keeps 100% of commission for remainder of year.
Equity awards through incentive program, gets agents pulling rope same way as company.
eXp, one of the fastest-growing, global residential real estate companies and a subsidiary of eXp World Holdings (Nasdaq: EXPI), today announced it intends to expand real estate operations to France, India, Mexico, Portugal and South Africa by the end of 2020.
VirBela is Collaboration and Virtual Workplace Tech Company
Focused on the future of work, fostering company culture and collaboration with a virtual workplace solution
In November 2018, the Company completed its asset acquisition of VirBELA, LLC’s (“VirBELA”) core group of products and services. The Company also launched eXp World Technologies, LLC, its innovation and technology division, which now holds the VirBELA brand. VirBELA continues to offer a modern, cloud-based environment focused on education and team development with clients in various industries from government to retail. The unique virtual collaborative work environment from VirBELA provides service-based businesses with distinct advantages in managing costs, attracting talent, and scaling operations without the burden of “brick and mortar” office locations. This technology provides eXp Realty with a primary source of differentiation and competitive advantage.
-Powers the eXp Realty operating model
- Enables companies to operate entirely remotely
-Hundreds of global customers utilize the virtual collaboration tech, including Deloitte, Stanford, and most recently the NBA
Kaplan joined VirBELA as a strategic advisor in April, streamlining enterprise sales and customer success. During his first three months, the team closed more than 20 enterprise deals, which helped to accelerate the company’s revenue growth by 260% in the second quarter of 2020.
Showcase IDX is a real estate search, consumer engagement and lead generation platform for agents.
Express Offers is a home buying platform connecting buyers and seller to expediite the sales transaction
Title, Escrow, and Settlement Services – During the year ended December 31, 2019, the Company entered into an agreement with a third-party investment firm to form a joint venture to offer title, escrow and settlement services in the United States. The joint venture, Silverline Title & Escrow, LLC is 50% owned by eXp Silverline Ventures, LLC, an indirect subsidiary of eXp and 50% owned by the third-party business partner. Operations in this area are currently in a nascent state.
Mortgage Brokerage Services - During the year ended December 31, 2019, the Company made capital contributions in consideration for at least a minimum 50% ownership interest in First Cloud Investment Group, LLC (“First Cloud”) with the remaining ownership interest held by certain of our independent agents and brokers. First Cloud was organized for the purpose of managing IntroLend First Cloud, LLC (“IntroLend First Cloud”), an indirect wholly-owned subsidiary of the Company created to provide mortgage origination to end-consumers. The Company will always retain at least 50% of the outstanding equity ownership units in First Cloud. Operations in this area are currently in a nascent state.
I believe that this company is utilizing the “cloud” technology to displace traditional real estate brokerages. They have a lower cost structure, so they can “share” a greater percentage of the profits with the real estate agents. This sharing is driving many agents to want to adopt or work with EXPI. I see this as a disruption of a traditional business by implementing new technologies.
It is the same as when electricity was invented and people coupled it with the drill or the wash board to make new items such as the electric drill or the washing machine. New technology allows for displacement or disruption. EXPI is able to share the savings with the realtors which is driving business to EXPI.
I bought a small amount of EXPI today, consisting of less than 1% of my portfolio. I plan on continuing to research the company. However I like what I see so far and wanted to bring it to the board for further discussion.