eXp hopes to stem agent losses with rev share updates
During an earnings call, Glenn Sanford said he wants to help agents “in the middle,” while noting that revenue was up and touching on the commissions lawsuits.
In an effort to stabilize — and grow — its agent count, eXp announced some changes to its revenue sharing program intended to benefit mid-level agent recruiters.
The brokerage is rolling out REVenue Share 2.0, which the company says will allow agents to earn rev share faster and instantly withdraw earnings for transactions that have closed. Starting in July, eXp will also offer an agent attraction bonus of up to $4,000 for each new agent directly sponsored.
During the company's first-quarter earnings call on May 1, eXp Realty Founder Glenn Sanford said he wanted agents who were mid-level recruiters to have access to more revenue tiers.
"Some of the attrition that we had been seeing when agents were leaving to some of our competitors was really that group of agents in the middle," Sanford said during the call.
eXp's agent count declined for a second straight quarter and was down 2% from a year ago at the end of March.
Some of the decline can be attributed to an offboarding program that began in the fourth quarter, and some is the result of agents leaving the industry altogether, said eXp Realty CEO Leo Pareja.
Even as agent count fell, the company said increased agent productivity was largely responsible for driving revenue up 11% year-over-year. The company ended the quarter with a net loss of $15.6 million, partially attributed to antitrust litigation expenses, compared to a net gain of $1.5 million a year prior.
eXp open to settling in commissions cases
Sanford also took some time to share eXp's perspective on the buyer agent commission lawsuits. He told investors that the cases naming eXp as a defendant are still in the early stages of litigation, and the company is not currently in settlement discussions.
"If there is an opportunity to settle for a number that makes sense to us, then we'll take that opportunity. But if not, we think we have some good arguments on our side of the equation," Sanford said.
Key numbers
Revenue: $943 million in the first quarter, up 11% year-over-year but down from $983 million in the fourth quarter.
Cash and cash equivalents: $109.2 million at the end of March, down from $125.9 million at the end of 2023. The company purchased around $33 million of common stock during the first quarter.
Net income/loss: A loss of $15.6 million for the first quarter. In the first quarter of 2023, eXp reported a net gain of $1.5 million. The net loss in Q1 included a $16 million antitrust litigation contingency provision.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization): $11 million in the first quarter, up from $500,000 in Q4, but down from $14.6 million in the first quarter of 2023.
Transactions: 110,976 in the first quarter, up 8% compared to a year ago but down from 115,424 for the fourth quarter.
Agent count: 85,780 at the end of the first quarter, down 2% from a year ago and down from 87,515 at the end of 2023. The company cited the departure of non-productive agents as the main factor.
Notable moves
In April, eXp promoted Leo Pareja, formerly the company's chief strategy officer, to the role of CEO. Glenn Sanford previously held the CEO title at eXp Realty and remains CEO of the parent company, eXp World Holdings.
The company also announced other leadership changes in recent weeks, including the appointment of team leader Kendall Bonner to vice president of industry relations, Wendy Forsythe as chief marketing officer, Amy Weaver as senior vice president of the U.S. growth team, Sean Murphy as senior vice president of commercial growth and Nadia Habib as senior vice president of Canadian growth.