eXp World’s first quarter was marked by a notable miss relative to Wall Street expectations, as revenue growth was muted and profitability metrics declined, leading to a significant negative market reaction. Management attributed these results to ongoing headwinds in the U.S. real estate market, including a challenging macroeconomic environment and a net decline in agent count. CEO Glenn Sanford and his team emphasized that while agent attrition persisted, the company continued to attract and retain higher-producing agents, with interim CFO Jesse Hill highlighting that 77% of departing agents had minimal sales activity. Increased investment in technology and international expansion, along with a focus on agent productivity, were key themes, but margin pressures remained as more productive agents hit compensation caps.
Is now the time to buy EXPI? Find out in our full research report (it’s free).
eXp World (EXPI) Q1 CY2025 Highlights:
- Revenue: $954.9 million vs analyst estimates of $994.8 million (1.3% year-on-year growth, 4% miss)
- Adjusted EBITDA: $2.16 million vs analyst estimates of $11.96 million (0.2% margin, 82% miss)
- Operating Margin: -1.1%, in line with the same quarter last year
- Agents and Brokers: 81,904, down 3,876 year on year
- Market Capitalization: $1.45 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions eXp World’s Q1 Earnings Call
- Oscar Nieves (Stephens): asked about expectations for gross margin and operating expenses for the full year. Interim CFO Jesse Hill explained that increased agent productivity compresses margins as more agents hit compensation caps, but the focus remains on driving volume and efficiency, expecting AI investments to improve cost structure in the second half of the year.
- Oscar Nieves (Stephens): followed up on the impact of new alignment with Zillow and listing standards, specifically asking about risks to private listing strategies. CEO Leo Pareja clarified that eXp’s open-market approach aims to minimize liability and protect both consumers and the enterprise, differentiating from competitors who treat private listings as a business model.
- Oscar Nieves (Stephens): also questioned management’s view on the U.S. housing market outlook for the rest of the year. Pareja responded that the company is in a “pause holding pattern,” closely watching interest rates and consumer confidence, with the business model built for flexible scaling amid ongoing headwinds.
- Andrew Thompson (eXp Country Leader, South Africa): submitted a pre-recorded question regarding whether the U.S. is going into a recession and management's outlook for U.S. property sales for the balance of the year. Pareja noted the company is in a holding pattern pending more data on rates and consumer confidence, emphasizing the importance of consumer confidence as a key variable and the model's flexibility to scale up or down as conditions warrant.
- No further analyst questions were recorded on the call.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the pace and success of international market launches and agent onboarding, (2) the impact of AI and automation on operational efficiency and cost savings, and (3) signs of stabilization or improvement in U.S. agent recruitment and transaction volumes. The effectiveness of new programs like Cosponsor and broader trends in consumer confidence will also be important indicators for the company’s trajectory.
eXp World currently trades at $9.60, up from $8.67 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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