eXp, the virtual brokerage that saw its star rise during the early stages of the pandemic, has seen gains moderate significantly as it reported a 12% year-over-year revenue increase last quarter, with agent count still up a strong 30%.
Revenue for the company hit $1.2 billion, with net income down significantly to $4.4 million from $23.8 million last year. eXp still boasts 85,000 agents—though growth there has also tapered.
“As we head into a seasonally slower quarter, we remain confident in our ability to deliver market share growth over the long term,” said eXp CFO and Chief Collaboration Officer Jeff Whiteside, in a statement.
Transactions closed grew 6% year-over-year, and transaction volume grew 8%.
eXp’s stock fell sharply at market open Wednesday, down over 6% in early trading.
When pandemic lockdowns and uncertainty struck in early 2020, agents (and investors) saw the prescient value of eXp’s unique focus on eliminating most physical spaces, allowing agents to work from home or in a proprietary metaverse environment.
That drove a dizzying increase in agent count and company value amid the broader real estate boom, with the company growing from 28,449 agents in Q1 2020 to 50,000 in early 2021, and reaching 80,000 worldwide last spring.
But the ongoing real estate correction, driven by spiraling mortgage rates and still-untamed inflation, is weighing on brokerages across the country. As eXp stock sank 60% from the beginning of the year, the question of whether the company has a model built for a slower market, where virtual and remote work is no longer a novelty, will remain an important one through this year and going into 2023.
eXp Founder, Chair and CEO Glenn Sanford was adamant that his company is not just a pandemic flash in the pan.
“We continue to grow revenue and gain marketshare despite an increasingly challenging market,” he said in a statement. “Our scale enables us to provide a differentiated platform for agents with the extensive resources and tools they need to be successful, both professionally and personally. eXp continues to be an attractive model for leading teams and independent brokerages, and we were pleased to welcome several during the quarter.”
Net income for the first three quarters of 2022 was $22.6 million, compared with $65.7 million for the same timeframe last year. eXp reported $134.5 million cash on hand at the end of Q3, and announced a cash dividend of $0.045 per share for next quarter.
