eXp World Holdings, Inc.

eXp World Holdings, Inc. operates a diversified portfolio of service-oriented businesses, primarily focused on expanding its real estate brokerage operations through an advanced enabling technology platform that facilitates collaboration and operational leverage across its ecosystem. The company's strategic approach centers on offering agents industry-leading economics, ownership opportunities, and access to tools and services for professional growth, emphasizing cooperation, transparency, and consumer-centric practices as key differentiators for attracting and retaining agents. The company's core business model involves generating revenue primarily from commissions on residential and commercial real estate transactions, with a mix of recurring and transactional income derived from serving residential homeowners and homebuyers through its network of independent agents and brokers. A significant platform dynamic is its cloud-based brokerage model, which aims to reduce costs for agents and brokers while offering stock ownership opportunities and a revenue-sharing plan based on agent attraction.

The company operates through three reportable segments: North American Realty, International Realty, and Other Affiliated Services. The North American Realty segment encompasses residential and commercial brokerage, lead generation, and related support services in the United States and Canada, and, as of the first quarter of 2025, includes FrameVR.io, the company's proprietary web-accessible 3D immersive technology platform for agent collaboration and training. This segment represented 96.9% ¹ of total consolidated revenues in 2025. The International Realty segment includes brokerage operations and support services across 27 countries ² in the Americas, Europe, the Middle East, Asia-Pacific, and South Africa, contributing 3.1% ³ of total consolidated revenues in 2025. Both realty segments generate revenue primarily from commissions on real estate transactions. The Other Affiliated Services segment includes SUCCESS® magazine and its related media properties, which provide training, resources, and tools for professional development to agents, brokers, staff, and general customers.

For the fiscal year ended December 31, 2025, eXp World Holdings, Inc. reported total revenues of $4,772,311 thousand ⁴, an increase of 4% ⁵ compared to $4,567,672 thousand ⁶ in 2024. Gross profit for 2025 was $333,578 thousand ⁷, a decrease of (3)% ⁸ from $342,395 thousand ⁹ in 2024. The company reported an operating loss of ($21,466) thousand ¹⁰ in 2025, a (13)% ¹¹ increase in loss from ($18,994) thousand ¹² in 2024. Net loss for 2025 was ($22,714) thousand ¹³, compared to a net loss of ($21,267) thousand ¹⁴ in 2024, representing a (7)% ¹⁵ increase in loss. Diluted EPS from continuing operations was ($0.14) ¹⁶ in 2025, compared to ($0.11) ¹⁷ in 2024. Consolidated adjusted EBITDA decreased by $42.3 million ¹⁸ to $33,172 thousand ¹⁹ in 2025 from $75,483 thousand ²⁰ in 2024. As of December 31, 2025, cash and cash equivalents totaled $124,245 thousand ²¹. The company reported no bank debt ²² and net working capital increased by $23.0 million ²³, or 28% ²⁴, to $105,167 thousand ²⁵ from $82,119 thousand ²⁶ in the prior year.

Year-over-year, North American Realty revenue increased 3% ²⁷ in 2025, driven by higher home sale prices in the U.S. and increased real estate transactions in Canada, along with improved agent productivity, partially offset by a reduction in the agent base. International Realty revenue saw a significant increase of 67% ²⁸ in 2025, primarily due to increased real estate transactions and productivity in previously launched markets, as well as the strategic launch of several new markets. Other Affiliated Services revenue decreased (53)% ²⁹ in 2025 due to lower SUCCESS® Magazine revenues. Gross profit decreased in 2025, reflecting revenue growth offset by increased agent capping and lower agent fees. Operating loss increased due to higher legal expenses and accruals, employee-related costs, and technology improvement expenses.

During 2025, the company introduced several significant operational developments. In the second quarter of 2025, it launched its Land and Ranch Division to support agents specializing in rural, recreational, and agricultural properties, and the Co-Sponsor Program, allowing agents to designate both a primary and co-sponsor. Additionally, a U.S. open-sourced Seller Advisory: Risks of Limited Market Exposure form was introduced. In the third quarter of 2025, the CRM of Choice initiative was launched, offering agents three leading customer relationship management platforms, and LYVVE™, a global property search platform, was released. The fourth quarter of 2025 saw the launch of the Sports and Entertainment Division for agents serving those sectors. Key leadership appointments included Jesse Hill as Chief Financial Officer in Q3 2025, and Carrie Lysenko as Chief Technology Officer and Holly Mabery as Chief Brokerage Officer of eXp Realty in Q4 2025. The company also made the first payment of $17.0 million ³⁰ related to the antitrust litigation accrual during the fiscal quarter ended June 30, 2025.

Management believes that its existing balances of cash and cash equivalents and cash flows expected to be generated from its operations will be sufficient to satisfy its normal operating requirements for at least the next 12 months and beyond. The Board currently intends to continue paying quarterly dividends, with a cash dividend of $0.05 ³¹ per common share approved on February 10, 2026 ³², expected to be paid on March 27, 2026 ³³ to stockholders of record on March 9, 2026 ³⁴. However, payment of cash dividends is at the discretion of the Board and no assurance is given for future dividends.

The company is positioned for growth with a strong base of agents, an efficient cloud-based operating model, and low fixed costs, which allows it to adapt quickly to market changes while supporting long-term productivity and retention. The company's strategic focus is the continued expansion of its real estate brokerage operations by delivering a differentiated value proposition to agents, centered on industry-leading economics, ownership opportunities, and access to tools and services that support long-term professional growth.

A major growth area is the continued expansion of its real estate brokerage operations into new international markets. In the first quarter of 2025, the company announced expansion into Peru. This was followed by expansion into Ecuador and Türkiye in the second quarter of 2025, and Japan in the third quarter of 2025. During the fourth quarter of 2025, the company announced expansion into Romania and the Netherlands. These strategic launches and increased productivity in previously launched markets contributed to a 67% ³⁵ increase in International Realty revenue in 2025.

Another growth vector involves the introduction of new programs and specialized divisions designed to support agents across various property types and client segments. In the second quarter of 2025, the company launched its Land and Ranch Division to support agents specializing in rural, recreational, and agricultural properties. During the fourth quarter of 2025, the company launched its Sports and Entertainment Division, aimed at supporting agents serving clients in the sports and entertainment sectors. These initiatives are intended to empower agents and expand their business opportunities.

Operationally, the company continues to invest in its technology platform and agent-facing tools to create process efficiencies and facilitate transactions. In the third quarter of 2025, the company launched its CRM of Choice initiative, allowing agents to select from three leading customer relationship management platforms based on their individual business needs. It also released LYVVE™, its global property search platform designed to consolidate listings and related data from multiple countries into a single, border-agnostic search interface for agents and consumers. Technology and development expenses increased 20% ³⁶ in 2025, primarily due to these continued improvements in technology offerings.

The company's planned capital allocation includes continued investment in technology and growth initiatives. During 2025, the company utilized its cash on hand to support agent productivity, growth initiatives, and investment in technology. The company has an authorized share repurchase program approved by the Board up to $1.0 billion ³⁷ in aggregate, though it does not obligate the company to acquire a minimum amount of shares. In 2025, the company repurchased $56.2 million ³⁸ of its common stock and paid cash dividends of $30.8 million ³⁹.

Management explicitly flagged several structural headwinds and execution risks to its growth plan. The company's business results are materially influenced by the strength of the U.S. residential real estate sector and overall economic conditions, including increased unemployment, higher interest rates, increased costs of obtaining mortgages, and changes in consumer attitudes. Elevated mortgage rates, combined with an increased overall cost of living and broader economic pressures, create significant affordability challenges that reduce the ability and willingness of prospective buyers to purchase a home. Fluctuations in housing inventory levels, whether too low or too high, can also negatively impact the business. Material decreases in the average brokerage commission rate, due to changes in regulation, litigation, or competitive models, could materially adversely affect financial results. The introduction and integration of emerging technologies, including artificial intelligence, presents operational, compliance, and reputational risks, and failures or limitations in these technologies could disrupt operations or expose the company to harm.

Geographic, regulatory, and macro factors identified as constraints include the risks associated with international operations in 27 countries ⁴⁰, such as fluctuations in foreign currency exchange rates, exposure to local economic conditions and laws, political instability, and difficulties in enforcing contractual rights or protecting intellectual property. The company is subject to extensive federal, state, local, and international regulation in the residential real estate industry, including RESPA, antitrust laws, and worker classification rules. Recent regulatory scrutiny of broker compensation and MLS practices, including the NAR settlement requiring significant changes to policies and a payment of $34.0 million ⁴¹, may increase compliance burdens and alter competitive dynamics. The company is also a defendant in certain antitrust class actions in the U.S. and Canada, and the Canadian antitrust litigation has no recorded accruals as of December 31, 2025 ⁴², with management unable to reasonably estimate the possible loss.

The company faces material risks from macroeconomic conditions, including the strength of the U.S. residential real estate sector, which is cyclical and influenced by factors such as increased unemployment, higher interest rates, and reduced mortgage availability. Specifically, high interest rates during 2024 and 2025, coupled with inflationary pressures, have created affordability challenges, potentially reducing transaction volumes. Fluctuations in housing inventory, whether excessive or insufficient, can also negatively impact the business. Competitive risks include potential decreases in average brokerage commission rates due to regulatory changes, litigation, or the rise of discount brokers and non-traditional platforms, which could adversely affect profitability. The company is subject to significant regulatory and legal risks, including ongoing antitrust litigation, such as the U.S. antitrust lawsuit where the company agreed to a settlement payment of $34.0 million ⁴³, with $17.0 million ⁴⁴ already paid in the fiscal quarter ended June 30, 2025. The Canadian antitrust litigation has no recorded accruals as of December 31, 2025 ⁴⁵, and management is unable to reasonably estimate the possible loss. Changes in NAR policies and buyer-broker compensation practices resulting from industry settlements could significantly alter the brokerage landscape. Operational risks include the challenge of attracting and retaining qualified real estate professionals, the potential loss of executive officers, and the substantial harm that could result from security breaches, interruptions, delays, or failures in its systems and operations, particularly given the reliance on its cloud-based platform and the collection of sensitive data. The introduction and integration of emerging technologies like AI also present risks related to reliability, accuracy, data privacy, bias, and regulatory compliance. International operations are exposed to foreign currency fluctuations, local economic and political instability, and differing employment laws.

Management's message to shareholders emphasizes the company's strategic focus on expanding its real estate brokerage operations by delivering a differentiated value proposition to agents, centered on industry-leading economics, ownership opportunities, and access to tools and services that support long-term professional growth. They highlight the company's commitment to cooperation, transparency, and consumer-centric practices as essential to a healthy, open real estate marketplace and a key differentiator in attracting and retaining professional agents. Management believes that the company is positioned for growth with a strong base of agents, an efficient cloud-based operating model, and low fixed costs, which allows for quick adaptation to market changes while supporting long-term productivity and retention. The Board currently intends to continue paying quarterly dividends, with a cash dividend of $0.05 ⁴⁶ per common share approved on February 10, 2026 ⁴⁷, expected to be paid on March 27, 2026 ⁴⁸ to stockholders of record on March 9, 2026 ⁴⁹. The three strategic priorities emphasized for the period ahead include the continued expansion of real estate brokerage operations, particularly in international markets, disciplined investment in technology and agent-facing tools to enhance efficiency and agent experience, and the introduction of new programs and specialized divisions to support agents in growing and expanding their businesses across a range of property types.