eXp World Holdings ( NASDAQ: EXPI ) management highlighted the real estate brokerage company's profitable North American business, on an adjusted EBITDA basis, even against a tough backdrop as higher mortgage rates suppress real estate volume, during its Q4 earnings call. On a per-share basis, the company turned in loss , trailing the average analyst estimate of break-even.
The quarter marks the first one in which the company reports its revenue and adjusted EBITDA by its four segments — North American Realty, International Realty, Virbela, and Other Affiliated Services.
Q4 North American Realty adjusted EBITDA of $12.1M dropped from $24.5M in the year-earlier quarter, while International Realty adjusted EBITDA loss of $4.12M widened from $2.22M in Q4 2021. Virbela adjusted EBITDA loss of $958K shrank from $2.44M a year ago, and Other Affiliated Services adjusted EBITDA loss of $461K narroed from $860K.
"We're very, very fortunate in our business to have the North American business really driving growth and profitability that allows us to invest not only in North America but in international and in our technologies," said Chief Financial Officer Jeff Whiteside .
Chairman, CEO, and Founder Glenn Sanford said the company is choosing to invest during the market downturn, a shift in management's approach. He noted that the company's balance sheet has more than $100M in cash and zero debt, "which enables us to continue to be agile and innovative in the various different business segments that we compete in."
"We believe that now is the time to actually grow in a down market, now that we've actually broken out these segments, and you can see that we actually have a scalable profitable model at scale in North America," Sandford said. "Our goal is to actually make that a reality in many, many international markets around the world."
During 2022, eXp Realty ( EXPI ) entered six new markets — Dominican Republic, Greece, New Zealand, Poland, and Dubai. The company started slowing down its international expansion at the end of last year, but will start to approach four to five new countries a year toward the end of this year, Sanford said.
For the operating environment in 2023, Sanford expects Q1 and Q2 quarters to each be worse than the year-ago quarters, with Q3 being "a little bit of a toss up."
As for operating expenses, the company said $93M-$96M per quarter that it spent for total G&A and marketing in the past three quarters is in the "range" of what it expects going forward. "So we don't have a plan to blow out expenses on the SG&A side," Whiteside said. "What we're going to be doing is, we're working on productivity in a big way."
In Wednesday afternoon trading, eXp World ( EXPI ) stock dropped 2.5% .
Take a look at eXp World's ( EXPI ) results over the past 11 quarters here.
In December, SA contributor Horizon Capital, which is long-term bullish on EXPI, expects the real estate company to have a tough time while the housing market remains "essentially frozen."
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eXp World plans to invest, grow in market downturn: Q4 earnings call