10q10k10q10k.net

What changed in eXp World Holdings, Inc.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of eXp World Holdings, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+429 added−370 removedSource: 10-K (2025-02-20) vs 10-K (2024-02-22)

Top changes in eXp World Holdings, Inc.'s 2024 10-K

429 paragraphs added · 370 removed · 250 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

46 edited+44 added−27 removed31 unchanged
Biggest changeFor example, in October 2023, California enacted a new climate accountability package pursuant to its new Climate Corporate Data Accountability Act that will require annual disclosure of certain greenhouse gas emissions and new Climate-Related Financial Risk Act that will require biennial disclosure of certain climate-related financial risks and mitigation measures, each beginning in 2026, subject to applicable implementing regulations and rulemaking that may impact final scope and compliance timing.
Biggest changeIn 2024, California amended its 2023 climate accountability package, including the Climate Corporate Data Accountability Act and Climate-Related Financial Risk Act, to clarify the scope of emissions reporting and extend certain compliance deadlines. These laws mandate annual reporting of greenhouse gas emissions and biennial disclosure of climate-related financial risks and mitigation measures beginning in 2026.
While RESPA and similar statutes allow 4 for certain payments, fee splits, and affiliated business arrangements, compliance can be challenging due to varying interpretations by courts and regulators. Violations can result in significant penalties, including fines and legal fees, particularly where RESPA and similar statutes have been invoked by plaintiffs in private litigation for various purposes.
While RESPA and similar statutes allow for certain payments, fee splits, and affiliated business arrangements, compliance can be challenging due to varying interpretations by courts and regulators. Violations can result in significant penalties, including fines and legal fees, particularly where RESPA and similar statutes have been invoked by plaintiffs in private litigation for various purposes.
The industry is currently experiencing increased scrutiny by private parties, regulators and other government offices, both on a federal and state level, particularly in the areas of antitrust and competition, Real Estate Settlement Procedures Act (“RESPA”) compliance (and similar state statutes), Telephone Consumer Protection Act compliance (“TCPA”) (and similar state statutes) and worker classification.
The industry is currently experiencing increased scrutiny by private parties, regulators and other government offices, both on a federal and state level, particularly in the areas of antitrust and competition, Real Estate Settlement Procedures Act (“RESPA”) (and similar state statutes) compliance, Telephone Consumer Protection Act of 1991 (“TCPA”) (and similar state statutes) compliance and worker classification.
Further, lawsuits, investigations, disputes and regulatory proceedings against us or other professionals or businesses in the residential real estate industry and tangential industries may impact the Company and its affiliated real estate professionals when the outcomes of those cases address practices common to the broader industry, business community, or the Company and may result in litigation or investigations for the Company.
Lawsuits, investigations, disputes and regulatory proceedings against us or other professionals or businesses in the residential real estate industry and tangential industries may impact the Company and its affiliated real estate professionals when the outcomes of those cases address practices common to the broader industry, business community, or the Company and may result in litigation or investigations for the Company.
Additionally, we're bound by state laws that restrict inducements and gifts to consumers, affecting our lead-generation efforts. Antitrust Our business is subject to various antitrust and competition laws, including the Sherman Antitrust Act, the Federal Trade Commission Act, the Clayton Act, and other related federal, state, and provincial laws in the jurisdictions in which we operate.
Additionally, we're bound by state laws that restrict inducements and gifts to consumers, affecting our lead-generation efforts. Antitrust 4 Our business is subject to various antitrust and competition laws, including the Sherman Antitrust Act, the Federal Trade Commission Act, the Clayton Act, and other related federal, state, and provincial laws in the jurisdictions in which we operate.
Our operational model and growth strategies necessitate the proprietary technologies used to support our operations now and in the future, as 3 well as requiring us to, at times, consider existing and emerging technology companies for acquisition, partnerships and other collaborative relationships.
Our operational model and growth strategies necessitate the proprietary technologies used to support our operations now and in the future, as well as requiring us to, at times, consider existing and emerging technology companies for acquisition, partnerships and other collaborative relationships.
These laws prevent anti-competitive behaviors such as price-fixing and other conduct that unreasonably restrains trade and competition. In 2021, the Department of Justice (“DOJ”) withdrew its consent to a November 2020 proposed settlement with NAR concerning alleged anti-competitive practices in real estate.
These laws are designed to prevent anti-competitive behaviors such as price-fixing and other conduct that unreasonably restrains trade and competition. In 2021, the Department of Justice (“DOJ”) withdrew its consent to a November 2020 proposed settlement with NAR concerning alleged anti-competitive practices in real estate.
As disclosed in Note 13 – Commitments and Contingencies to the consolidated financial statements included elsewhere within this Annual Report, we are a defendant in certain antitrust class action complaints which allege violations of federal antitrust law in the United States and Canada.
As disclosed in Note 14 – Commitments and Contingencies to the consolidated financial statements included elsewhere within this Annual Report, we are a defendant in certain antitrust class action complaints which allege violations of federal antitrust law in the United States and Canada.
We also utilize part-time and temporary employees and consultants when necessary; in many of our foreign markets we rely on the use of indirect employment structures where personnel providing certain services to the foreign entities are employed by a contractor of the Company and are not employed by the Company. Management: Our operations are overseen directly by management.
We also utilize part-time and temporary employees and consultants when necessary; in a limited number of our foreign markets, we rely on the use of indirect employment structures where personnel providing certain services to the foreign entities are employed by a contractor of the Company and are not employed by the Company. Management: Our operations are overseen directly by management.
Markets and Customers Real Estate Brokerage : Our clients are primarily residential homeowners and homebuyers in the markets in which we operate as serviced by our international network of independent agents and brokers.
Markets and Customers Real Estate Brokerage : Our clients are primarily residential homeowners and homebuyers in the markets in which we operate as serviced by our global network of independent agents and brokers.
Business Segments The Company is operated and managed as four reportable segments which are North American Realty, International Realty, Virbela and Other Affiliated Services. Our business segments bring together related eXp technologies and services to support the success and development of agents, entrepreneurs and businesses and provide them remote business solutions.
Business Segments The Company is operated and managed as three reportable segments which are North American Realty, International Realty and Other Affiliated Services. Our business segments bring together related eXp technologies and services to support the success and development of agents, entrepreneurs and businesses and provide them remote business solutions.
The following are developments in our business since the beginning of the fiscal year ended December 31, 2023: ● During 2023, the Company announced various new agent incentive programs to enhance the agent experience and to attract culturally aligned agents, teams of agents and independent brokerages to the Company.
The following are developments in our business since the beginning of the fiscal year ended December 31, 2024: ● The Company announced various new agent incentive programs to enhance the agent experience and to attract culturally aligned agents, teams of agents and independent brokerages to the Company.
Our International Realty segment operates in the U.K., Australia, South Africa, India, Mexico, Portugal, France, Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Panama, Germany, the Dominican Republic, Greece, New Zealand, Chile, Poland and Dubai. Our International Realty segment represented 1.3% of total consolidated revenues in 2023.
Our International Realty segment operates in the U.K., Australia, South Africa, India, Mexico, Portugal, France, Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Panama, Germany, the Dominican Republic, Greece, New Zealand, Chile, Poland and Dubai. Our International Realty segment represented 1.9% of total consolidated revenues in 2024.
Our experienced agents and brokers are well suited to support our customers’ needs with a high level of professionalism, knowledge and support as they endeavor on one of the largest transactions they will most likely experience. Our North American Realty segment is comprised of operations in the U.S. and Canadian residential real estate markets.
Our experienced agents and brokers are well suited to support our customers’ needs with a high level of professionalism, knowledge and support as they endeavor on one of the largest lifetime purchases they will most likely undertake. Our North American Realty segment is comprised of operations in the U.S. and Canadian residential real estate markets.
The contents of any website referred to in this Annual Report on Form 10-K are not intended to be incorporated into this Annual Report on Form 10-K or in any other report or document we file with the SEC and any references to our websites are intended to be inactive textual references only.
The contents of any website referred to in this Annual Report are not incorporated into this Annual Report or in any other report or document we file with the SEC and any references to our websites are intended to be inactive textual references only.
Available Information The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as amended (the “Exchange Act”), are filed with the U.S. Securities and Exchange Commission (the “SEC”).
Available Information The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as amended (the “Exchange Act”), are filed with the SEC.
Through our network of independent agents and brokers, we have brokerages in all 50 states in the U.S. residential real estate market and residential real estate markets in most of the Canadian provinces. Our North American Realty segment represented 98.6% of total consolidated revenues in 2023.
Through our network of independent agents and brokers, we have brokerages in all 50 states in the U.S. residential real estate market and residential real estate markets in all of the Canadian provinces. Our North American Realty segment represented 98.1% of total consolidated revenues in 2024.
Such information would include climate-related risks that are reasonably likely to have a material impact on an issuer’s business or results of operations, as well as certain climate-related financial statement metrics. In addition, we expect state laws and regulations regarding these topics to continue to evolve and impose new and additional requirements.
If implemented, such rules would require disclosure of information about climate-related risks that are reasonably likely to have a material impact on an issuer’s business or results of operations, as well as certain climate-related financial statement metrics. In addition, we expect state laws and regulations regarding these topics to continue to evolve and impose new and additional requirements.
Under its ownership, the Company has built upon SUCCESS ® magazine and its related media properties to develop a robust SUCCESS ® brand of innovative personal and professional development tools, including SUCCESS ® Coaching and SUCCESS ® Space.
Under its ownership, the Company has also built upon SUCCESS® magazine and its related media properties to develop a robust SUCCESS ® brand of innovative personal and professional development tools.
This segment also includes SUCCESS ® Space, a new kind of coworking solution offering highly flexible, on-demand rental work spaces for individual and group use, access to professional development coaching, media production services, virtual-world communications technology and full-service cafes.
This segment also includes SUCCESS ® Space, a coworking solution offering highly flexible, on-demand rental workspaces for individual and group use, access to professional development coaching, media production services, virtual-world communications technology and full-service cafes.
We believe it is critical to our success that agent voices are heard at every level of the Company, including management, whose mission is supported by our Agent Advisory Council and our Board of Directors, which includes a rotating agent director seat.
We believe it is critical to our success that agent voices are heard at every level of the Company, including management, whose mission is supported by our Agent Advisory Council and our Board of Directors, which includes a rotating agent director seat. Refer to our Agent Advisory Council section of our website at https://expworldholdings.com/who-we-are/.
Such reports and information for the previous 12 months are available free of charge through our website at www.expworldholdings.com/investors/sec-filings/. 8 Additionally, the SEC maintains an internet website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. The public can obtain any documents that we file with the SEC at www.sec.gov .
Such reports and information for the previous 12 months are available free of charge through our website at www.expworldholdings.com/investors/sec-filings/. Additionally, the SEC maintains an internet website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.
For additional information with respect to related risks facing our business, see Item 1A - Risk Factors in this Annual Report, in particular under the caption “Cybersecurity incidents could disrupt our business operations, result in the loss of critical and confidential information, adversely impact our reputation and harm our business.” TCPA The TCPA limits specific telemarketing actions, such as autodialing and using artificial voice messages, and has established a national Do-Not-Call registry.
For additional information with respect to related risks facing our business, see Item “1A - Risk Factors” in this Annual Report, in particular under the caption “Cybersecurity incidents could disrupt our business operations, result in the loss of critical and confidential information, adversely impact our reputation and harm our business.” ​ ​ 5 TCPA The TCPA limits specific telemarketing actions, such as autodialing and using artificial voice messages, and has established rules for telemarketing compliance that account for consumer registration on a national or state Do-Not-Call registry.
As of December 31, 2023, the Company had approximately 2,114 full-time equivalent employees and 87,515 real estate agents. Our employees are not members of any labor union and we have never experienced business interruptions due to labor disputes.
As of December 31, 2024, the Company had approximately 2,001 full-time equivalent employees and 82,980 real estate agents. Our employees are not members of any labor union, and we have never experienced business interruptions due to labor disputes.
Our Company also uses the following channels as a means of disclosing information about the Company on a broad, non-exclusionary basis, including information about our brokerage, upcoming investor and industry conferences, our planned financial and other announcements and other matters and for complying with our disclosure obligations under Regulation FD: eXp investors website ( www.expworldholdings.com/investors/ ) eXp Realty X Account ( https://x.com/eXpRealty ) eXp World Holdings X Account ( https://x.com/eXpWorldIR ) eXp Realty LinkedIn page ( https://www.linkedin.com/company/exp-realty/ ) eXp World Holdings LinkedIn page ( https://www.linkedin.com/company/expworldholdings/ ) eXp Realty Facebook Page ( https://www.facebook.com/eXpRealty ) eXp World Holdings Facebook Page ( https://www.facebook.com/eXpWorldHoldings ) eXp Realty Instagram Page ( https://www.instagram.com/eXpRealty_ ) eXp World Holdings Instagram Page ( https://www.instagram.com/eXpWorldHoldings ) Please note that this list may be updated from time to time.
The public can obtain any documents that we file with the SEC at www.sec.gov . 8 Our Company also uses the following channels as a means of disclosing information about the Company on a broad, non-exclusionary basis, including information about our brokerage, upcoming investor and industry conferences, our planned financial and other announcements and other matters and for complying with our disclosure obligations under Regulation FD: eXp investors website ( www.expworldholdings.com/investors/ ) eXp Realty LinkedIn page ( https://www.linkedin.com/company/exp-realty/ ) eXp Realty Facebook Page ( https://www.facebook.com/eXpRealty ) eXp Realty Instagram Page ( https://www.instagram.com/eXpRealty ) eXp International LinkedIn Page ( https://www.linkedin.com/company/exp-realty-international/ ) eXp International Facebook Page ( https://www.facebook.com/expintl/ ) eXp International Instagram Page ( https://www.instagram.com/exp.intl/ ) eXp World Holdings LinkedIn page ( https://www.linkedin.com/company/expworldholdings/ ) eXp World Holdings Facebook Page ( https://www.facebook.com/eXpWorldHoldings ) eXp World Holdings Instagram Page ( https://www.instagram.com/eXpWorldHoldings ) Please note that this list may be updated from time to time.
Our management oversees all responsibilities in the areas of corporate administration, business development and technological research and development. We have successfully expanded our current management to retain skilled employees with experience relevant to our business and intend to continue with this initiative.
Our management oversees all responsibilities in the areas of corporate administration, business development and technological research and development. We continue to expand our current management to retain skilled employees with experience relevant to our business.
By contrast, our Virbela and Other Affiliated Services segments experience generally consistent revenue during the year, with some increased adoption around the Company’s spring and fall events. Government Regulation See Note 13 – Commitments and Contingencies to the consolidated financial statements included elsewhere within this Annual Report for additional information on the Company’s legal proceedings.
By contrast, our Other Affiliated Services segment experiences generally consistent revenue during the year, with some increased adoption around the Company’s eXpcon events held throughout the year. Government Regulation See Note 14 – Commitments and Contingencies to the consolidated financial statements included elsewhere within this Annual Report for additional information on the Company’s legal proceedings.
We are positioned to earn commissions on either — or both — of the buy side or sell side of residential real estate transactions, as well as the ability to receive other fees for complementary services provided during the closing process.
We are positioned to earn commissions on either — or both — of the buy side or sell side of residential real estate transactions, as well as the ability to receive other fees for complementary services provided during the closing process. We believe that we are the only global cloud-based real estate brokerage with massive scale.
We also own the rights to key domain names used by our domestic and international brokerages: including, for example, https://exprealty.com and https://exprealty.ca. Additionally, we own registered trademarks and the rights to domain names which are leveraged in our other business segments and in connection with services that complement our real estate brokerage, such as the “SUCCESS” registered trademark and https://success.com.
Additionally, we own registered trademarks and the rights to 3 domain names which are leveraged in our other business segments and in connection with services that complement our real estate brokerage, such as the “SUCCESS” registered trademark and https://success.com.
Additionally, our agents and brokers have a unique choice to attain a greater vested interest in eXp through the acceptance of equity awards in eXp stock as part of their compensation offerings.
Independent Agent and Broker Support : We provide entrepreneurial business opportunities and a competitive compensation structure to our agents and brokers. Additionally, our agents and brokers have a unique choice to attain a greater vested interest in eXp through the acceptance of equity awards in shares of eXp common stock as part of their compensation offerings.
These lawsuits, together with similar lawsuits against other businesses in our industry, have prompted discussion of regulatory changes to rules established by local or state real estate boards or MLSs. The resolution of the antitrust litigation and/or other regulatory changes may require changes to our or our brokers’ business models, including changes in agent and broker compensation.
These lawsuits and the Settlement, together with similar lawsuits against other businesses in our industry and related settlements, have prompted discussion of regulatory changes to rules established by local or state real estate boards or MLSs.
Our management’s relationships with agents, brokers, technology providers and customers will provide the foundation with which we expect to grow our business in the future. We believe the skill set of our management team will be a primary asset in the development of our brands and trademarks.
We believe our management’s relationships with agents, brokers, technology providers and customers provide the foundation with which we expect to grow our business in the future.
We have also engaged various third parties to extend enterprise licenses for critical transaction management, client relationship management and other proprietary software. While there can be no assurance that registered trademarks and other intellectual property rights will protect our proprietary information, we intend to assert our intellectual property rights against any infringement.
While there can be no assurance that registered trademarks and other intellectual property rights will protect our proprietary information, we intend to assert our intellectual property rights against any infringement.
The TCPA has a broad definition of autodialing and mandates written consent for some communications to mobile phones. Some states have, or might introduce, their own versions of the TCPA.
The TCPA has a broad definition of autodialing and mandates written consent for some communications to mobile phones. Some states have, or might introduce, their own versions of the TCPA. We are susceptible to class action claims suggesting we're responsible for contacts made by our real estate professionals.
We believe that our ongoing success is attributable in large part to our eXp employees who work across the U.S. and internationally in the cloud environment to support our agent-centric business model and core values.
At eXp, these core values are manifested throughout everything we do and support the Company’s overall vision and shape our culture. We believe that our ongoing success is attributable to our outstanding agents, brokers, and employees who work across the U.S. and internationally in the cloud environment to drive and support our agent-centric business model and core values.
In 2021, 2022, and 2023, we were named as one of the Top 100 Companies to Watch for Remote Jobs by FlexJobs. Health & Safety: Our employees operate in a fully remote environment and are located across the U.S. and internationally.
In 2021, 2022, and 2023, we were named as one of the Top 100 Companies to Watch for Remote Jobs by FlexJobs. In 2024, eXp was rated #7 on Glassdoor Best Places to Work. Health & Safety: Our employees and agents span the U.S. and international locations, with our employees operating in a fully remote environment.
We also value transparency and are committed to an open and accountable workplace where employees are empowered to raise issues. The Company provides multiple channels to speak up, ask for guidance and report concerns. eXp has been named one of the Best Places to Work on Glassdoor for each of the years 2019 through 2023.
The Company provides multiple channels to speak up, ask for guidance and report concerns. eXp has been named one of the Best Places to Work on Glassdoor in the big-sized company category for each of the years 2019 through 2024.
We believe that we are the only international real estate brokerage presently using a 3D immersive office environment in place of physical brick-and-mortar offices. Additionally, this innovative operational structure coupled with our distribution model allows us to effectively enter new markets with speed and flexibility and without much of the investment and cost associated with establishing a traditional brokerage.
This innovative operational structure coupled with our distribution model allows us to effectively enter new markets with speed and flexibility and without much of the investment and cost associated with establishing a traditional brokerage. We also believe our compensation and incentive programs to attract and retain highly productive agents are one of the most compelling in the industry.
Resources Software Development Our Company continues to increase our investment in the development of our own cloud-based transaction processing platforms and further expand our technological products and service offerings. We continue to create process efficiencies and provide our agents and brokers with technologies designed to facilitate transactions in an efficient and consumer-friendly way.
We continue to create process efficiencies and provide our agents and brokers with technologies designed to facilitate transactions in an efficient and consumer-friendly way.
Refer to our Agent Advisory Council section of our website at https://expworldholdings.com/agent-advisory-council/ for information on agent participation in the management of eXp. Information contained on our website is not incorporated by reference into this Annual Report.
Information contained on our website is not incorporated by reference into this Annual Report.
Globally, the International Sustainability Standards Board and applicable sustainability disclosure standards impact how national regulators and governance bodies approach these and related topics. Other Regulation We operate in multiple geographies and industries which subject us to various governmental and non-governmental rules and regulations, including without limitation, franchising, fair trade, health and data privacy rules.
Other Regulation We operate in multiple geographies and industries which subject us to various governmental and non-governmental rules and regulations, including, without limitation, franchising, fair trade, health and data privacy rules. As we expand into new businesses and markets, we assign and/or engage appropriate personnel to manage and comply with such requirements.
Talent and Culture : Our business is driven by nine core values of community, sustainability, integrity, service, collaboration, innovation, transparency, agile and fun. At eXp, these core values are manifested throughout everything we do and support the Company’s overall vision and shape our culture.
We believe the skill set of our management team is a primary asset in the development of our brands and trademarks. 7 Talent and Culture : Our business is driven by nine core values of community, sustainability, integrity, service, collaboration, innovation, transparency, agility and fun.
This could reduce the fees we receive from our affiliated real estate professionals, which, in turn, could adversely affect our financial condition and results of operations. Internationally, our operations are also subject to laws against improper payments, including the U.S. Foreign Corrupt Practices Act and similar global regulations.
The resolution of the antitrust litigation or other regulatory changes have required and may continue to require changes to our or our brokers’ business models, including changes in agent and broker compensation. This could potentially reduce the fees we receive from our affiliated real estate professionals, which, in turn, could adversely affect our financial condition and results of operations.
However, sustainable investing and environmental, social, and governance practices continue to be the focus of increased regulatory scrutiny across jurisdictions. In the U.S., the SEC has proposed climate disclosure rules to require public issuers to include enhanced disclosure regarding corporate climate-related information in their periodic reports and registration statements.
Securities and Exchange Commission (“SEC”) adopted climate disclosure rules in March 2024 to require public issuers to include enhanced disclosure regarding corporate climate-related information in their periodic reports and registration statements; however, the SEC stayed the effectiveness of such rules in April 2024 due to litigation initiated immediately following the SEC’s adoption of such rules.
As our customers evolve post-COVID, including a return-to-work-offices, and in light of ongoing internal and external demand for web-accessible platforms and artificial intelligence solutions, we have experienced a decline in demand for our application-based platform, Virbela, and a rising interest our web-accessible platform, Frame. 2 Other Affiliated Services Includes key assets such as SUCCESS ® magazine and SUCCESS ® Coaching, which provide training, classes, resources, and tools to empower our agents, brokers, staff, and general customers to excel and empower their professional development.
Other Affiliated Services The Company’s Other Affiliated Services segment includes key assets such as FrameVR.io, our web-accessible proprietary technology offering immersive 3D platforms that are deeply social and collaborative, and SUCCESS ® magazine and its related media properties, which provide training, classes, resources, and tools to empower our agents, brokers, staff, and general 2 customers to excel and empower their professional development.
In 2022, we conducted a robust ESG materiality assessment with the assistance of an external consultant, GlobeScan, to identify the material ESG topics that have the greatest impact on the Company’s success, which was delivered in January 2023 to our leadership team, employees and agents.
In 2022, the Company conducted a materiality assessment with GlobeScan to identify key sustainability topics influencing our business success, which informed the establishment of the Sustainability Committee of our Board in 2023.
Removed
New incentive programs include Boost, Accelerate, and Thrive, which offer unique financial incentives. ● In 2023, the Company launched various new ancillary programs and services to support the development and success of its agents, brokers and customers, including the continued global expansion of eXp Luxury™, Military Rewards Program, Listing Kits, Bundle Select™, eXp Exclusives™, My Link My Lead™, and affiliate relationships like HomeHunter™. ● Additional talent joined the Company in 2023, including the appointment of Peggie Pelosi to our Board of Directors in January 2023 and the appointment of Fred Reichheld to our Board of Directors in September 2023.
Added
New incentive programs include the ICON Incentive Program, Revenue Share Capping Incentive Program, and REVenue Share 2.0, which offer unique financial incentives. ● The Company launched various new platforms and services to support the development and success of its agents, brokers and customers, including the launch of eXp Elevate Coaching, Global Agent Referral Platform, eXp Commercial Groups, new on-demand eXp University courses including the Fast Cap Training Program and Fast Start Series, and affiliate relationships with Sisu and Canva.
Removed
Virbela We operate over the internet and rely on cloud-based technologies to provide our residential real estate brokerage services. Our brokers and agents leverage our technology, services, data, lead generation and marketing tools to represent residential real estate buyers and sellers.
Added
In 2024, the Company acquired the assets of LUXVT to enhance our eXp Luxury agent program, which experienced continued growth throughout the year. ● The Company announced expansion into Türkiye, Peru and Egypt, currently expected to be launched in 2025. ● Numerous remarkable agents, teams of agents, and independent brokerages joined the Company in 2024 in the US, Canadian, and global markets.
Removed
Among other technologies we use to operate our business, our proprietary Virbela ® and Frame™ platforms offer metaverse solutions, including 3D, fully immersive, cloud offices.
Added
Additionally, new talent joined the Company and certain key talent promoted to new roles in 2024, including the appointment of Leo Pareja as Chief Executive Officer of eXp Realty, LLC, a wholly owned subsidiary of the Company (“eXp Realty”), Wendy Forsythe as Chief Marketing Officer of eXp Realty, Renee Kaspar as Chief Human Resources Officer of eXp Realty, Seth Siegler as Chief Innovation Officer of eXp Realty, and Sumanth Kamath as Chief Technology Officer of eXp Realty.
Removed
These cloud offices include virtual conference rooms, training centers and individual offices in which our management, employees, agents and brokers all work on a daily basis and, in separate custom settings, in which our customers operate as well, collaborating, socializing and transacting business across geographic regions.
Added
In prior years, the Company’s Virbela and FrameVR.io businesses represented an operating and reporting segment under Accounting Standards Codification (“ASC”) 280.
Removed
While most Company and customer operations have taken place on the Virbela platform since 2016, many operations have begun to shift to the Frame platform as its development has matured, including its unique capability to operate fully on the web without the requirement for a separate client application.
Added
As a result of the Company’s decision to wind down or sell of the application-based Virbela business in the first quarter of 2024, the Company determined that the remaining operations of Virbela did not meet the operating or reporting segment criteria; therefore, any operating results related to Virbela, prior to the completion of its disposition in the fourth quarter of 2024, are included in discontinued operations.
Removed
Virbela: Our innovative technologies are used primarily by our brokerage real estate agents and their clients within our U.S., Canadian and international markets. We continue to innovate the Virbela portfolio, expanding the product offering to include and enhance our Frame platform.
Added
Operating results related to FrameVR.io technologies are included in the Other Affiliated Services segment beginning in the first quarter of 2024. All prior period segment disclosure information has been reclassified to conform to the current reporting structure in this Annual Report.
Removed
We have experienced a decline, among internal staff and agent users as well as among external unaffiliated customers, in demand for our application-based platform, Virbela, and an increased demand for our web-accessible platform, Frame. Other Affiliated Services: We provide affiliated services to our agents, brokers and customers that support their professional efforts and personal betterment.
Added
Other Affiliated Services: We provide affiliated services to our agents, brokers and customers that support their professional efforts and personal betterment. The Company’s cloud-based brokerage is powered by FrameVR.io technology, offering immersive 3D platforms that are deeply social and collaborative, enabling agents to be more connected and productive.
Removed
We also believe our compensation and incentive programs to attract and retain highly productive agents are one of the most compelling in the industry. As such, we believe that we are well positioned in our competitive landscape.
Added
As such, we believe that we are well positioned in our competitive landscape. Resources Software Development Our Company continues to increase our investment in the development of our own cloud-based technology and transaction processing platforms and further expand our technological products and service offerings.
Removed
For example, the White House issued an Executive Order in July 2021 identifying real estate brokerages and listings as an area of focus. In 2018, a joint workshop by the DOJ and FTC addressed potential competition issues in the residential real estate sector which could be the subject of future enforcement actions.
Added
We also own the rights to key domain names used by our domestic and international brokerages: including, for example, https://exprealty.com and https://exprealty.ca.
Removed
We are susceptible to class action claims suggesting we're responsible for contacts made by our real estate professionals. 5 Environmental Regulation The Company operates in a cloud-based model which gives us an insignificant physical geographical footprint. Due to this, we are not materially impacted by any environmental regulation.
Added
We have also engaged various third parties to extend enterprise licenses for critical transaction management, client relationship management and other proprietary software. Information contained on the websites associated with such domain names is not incorporated by reference into this Annual Report.
Removed
As we expand into new businesses and markets, we assign and/or engage appropriate personnel to manage and comply with such requirements. Environmental, Social and Governance Initiatives As a company dedicated to disrupting the traditional industry model, eXp understands the importance of ingraining environmental, social and governance (ESG) best practices across the organization.
Added
In 2024, antitrust enforcement in the real estate industry has continued to evolve, with regulators maintaining a focus on transparency and competition in broker compensation and MLS practices. In March 2024, the NAR reached a settlement with the plaintiffs in various related antitrust lawsuits.
Removed
We are committed to running a sustainable business for our agents, their clients, and the greater good of our planet by bringing people together beyond boundaries with advanced collaboration technologies. Our approach leverages the power of community and cloud-based solutions to drive positive impact for people and the environment.
Added
The settlement required significant changes to NAR’s policies, including increased transparency in agent compensation and modifications to MLS rules, which have begun to impact industry practices. These changes have prompted brokerages, including ours, to evaluate and adapt business models to comply with the revised standards.
Removed
In 2023, the Company’s Board of Directors created a Sustainability Committee of the Board tasked with overseeing and developing, alongside management, strategies related to the material ESG topics identified in the assessment.
Added
While the long-term effects of the settlement on the real estate industry remain uncertain, these adjustments could potentially increase operational costs or alter competitive dynamics.
Removed
We have chosen to focus our efforts on three key pillars that we have termed our “Core Values”: empowering people development, building inclusive and equitable communities and advancing climate-positive solutions.
Added
In December 2024, the Company entered into a settlement agreement (the “Settlement”) to resolve U.S. antitrust claims whereby the Company agreed to make certain changes to its business practices and to pay a total settlement amount of $34.0 million. The Settlement remains subject to preliminary and final court approval and will become effective following any appeals process, if applicable.
Removed
The results of the materiality assessment were provided to the Company’s Board and management to identify our key focus areas and to develop a strategy to address the material ESG topics identified in the assessment. 6 ​ During 2023, the Company had various social initiatives in support of these Core Values, including the following: ● Empowering People Development: We are helping people achieve their fullest potential by fostering personal and professional growth through our tools, technology and collaboration.
Added
In addition to U.S. regulatory activity, our operations are subject to international antitrust and anti-corruption laws, including the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and other comparable laws in other countries where we operate. We remain committed to compliance with these regulations and to maintaining transparent and competitive practices across our business operations.
Removed
We have continued throughout 2023 to provide tools for productivity and health and wellbeing, for our employees, access to wellness platforms such as Calm, Vitality and Noom, and, for our real estate agents and brokers, providing toolkits for scaling business and entrepreneurship. ● Building Inclusive and Equitable Communities: We drive fairness, inclusivity and belonging by supporting diverse groups of clients, agents, brokers and employees, and encouraging them to create a positive impact in their communities through philanthropic initiatives.
Added
Environmental Regulation The Company operates in a cloud-based model which gives us an insignificant physical geographical footprint. Despite this, we are impacted by environmental regulations, particularly those focusing on emissions associated with data centers and cloud-based operations. However, sustainable investing and environmental, social, and governance practices continue to be the focus of increased regulatory scrutiny across jurisdictions.
Removed
We are committed to creating an equitable, diverse and inclusive culture for our clients, agents, brokers and employees.
Added
The amendments also emphasized reporting of Scope 3 emissions (as defined in the amendments) for entities exceeding specified thresholds, creating additional administrative requirements for many businesses, including the Company. Globally, the European Union’s Corporate Sustainability Due Diligence Directive (CSDDD), finalized in 2024, imposes due diligence obligations on companies operating within the EU or with significant business ties to EU markets.

… 37 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

93 edited+64 added−18 removed109 unchanged
Biggest changeSee the section of this Annual Report titled “Forward-Looking Statements.” Risks Related to Our Industries Our profitability is tied to the strength of the residential real estate market, which is subject to a number of general business and macroeconomic conditions beyond our control.
Biggest changeSee the section of this Annual Report titled “Forward-Looking Statements.” Risk Factor Summary This risk factor summary contains a high-level summary of certain of the principal factors, events and uncertainties that make an investment in our securities risky, including risks related to our industries, risks related to our general business and operations, risks related to our real estate business, risks related to legal and regulatory matters and risks related to our shares of common stock.
Pre-fiscal 2018 certain state and foreign net operating losses will carry forward for a limited number of years. Federal, as well as some state and foreign net operating losses generated in and after fiscal 2018 do not expire and can be carried forward indefinitely.
Certain pre-fiscal 2018 state net operating losses will carry forward for a limited number of years. Federal, as well as, some state and foreign net operating losses generated in and after fiscal 2018 do not expire and can be carried forward indefinitely.
Any such events could also damage our reputation and impair our ability to attract and service homebuyers, home sellers, agents, clients and customers as well our ability to attract brokerages, brokers, teams of agents and agents to our company, without increasing our costs.
Any such events could also damage our reputation and impair our ability to attract and service homebuyers, home sellers, agents, clients and customers as well as our ability to attract brokerages, brokers, teams of agents and agents to our Company, without increasing our costs.
As a result, we are and may, in the future, be blocked from or limited in providing each of our agent compensation plans in certain markets. In addition, these laws, rules and regulations are subject to judicial and agency interpretation and it might be determined that our agent compensation plans are not permitted to be offered to independent contractors.
As a result, we are, and may be in the future, blocked from or limited in providing each of our agent compensation plans in certain markets. In addition, these laws, rules and regulations are subject to judicial and agency interpretation, and it might be determined that our agent compensation plans are not permitted to be offered to independent contractors.
In response to such limitations, we have and may, in the future, be required to modify our agent compensation practices in such markets.
In response to such limitations, we have, and may be in the future, required to modify our agent compensation practices in such markets.
Any acquisitions and joint ventures we pursue would involve numerous risks, including the following: ● difficulties in integrating and managing the operations and technologies of the companies we acquire, including higher than expected integration costs and longer integration periods; ● diversion of our management’s attention from normal daily operations of our business; ● our inability to maintain the customers, key employees, key business relationships and reputations of the businesses we acquire; ● our inability to generate sufficient revenue or business efficiencies from acquisitions or joint ventures to offset our increased expenses associated with acquisitions or joint ventures; ● our responsibility for the liabilities of the businesses we acquire or gain ownership in through joint ventures, including, without limitation, liabilities arising out of their failure to maintain effective data security, data integrity, disaster recovery and privacy controls prior to the acquisition, their infringement or alleged infringement of third-party intellectual property, 13 contract or data access rights prior to the acquisition, or failure to comply with regulatory standards applicable to new business lines; ● difficulties in complying with new markets or regulatory standards to which we were not previously subject; ● delays in our ability to implement internal standards, controls, procedures and policies in the businesses we acquire or gain ownership in through joint ventures and increased risk that our internal controls will be ineffective; ● operations in a nascent state depend directly on utilization by eXp Realty agents and brokers and new and existing customers; ● adverse effects of acquisition and joint venture activity on the key performance indicators we use to monitor our performance as a business; and ● inability to fully realize intangible assets recognized through acquisitions or joint ventures and related non-cash impairment charges that may result if we are required to revalue such intangible assets.
Any acquisitions and joint ventures we pursue would involve numerous risks, including the following: ● difficulties in integrating and managing the operations and technologies of the companies we acquire, including higher than expected integration costs and longer integration periods; ● diversion of our management’s attention from normal daily operations of our business; ● our inability to maintain the customers, key employees, key business relationships and reputations of the businesses we acquire; ● our inability to generate sufficient revenue or business efficiencies from acquisitions or joint ventures to offset our increased expenses associated with acquisitions or joint ventures; ● our responsibility for the liabilities of the businesses we acquire or gain ownership in through joint ventures, including, without limitation, liabilities arising out of their failure to maintain effective data security, data integrity, disaster recovery and privacy controls prior to the acquisition, their infringement or alleged infringement of third-party intellectual property, contract or data access rights prior to the acquisition, or failure to comply with regulatory standards applicable to new business lines; ● difficulties in complying with new markets or regulatory standards to which we were not previously subject; ● delays in our ability to implement internal standards, controls, procedures and policies in the businesses we acquire or gain ownership in through joint ventures and increased risk that our internal controls will be ineffective; ● operations in a nascent state may depend directly on utilization by eXp Realty agents and brokers and new and existing customers; ● adverse effects of acquisition and joint venture activity on the key performance indicators we use to monitor our performance as a business; and ● inability to fully realize intangible assets recognized through acquisitions or joint ventures and related non-cash impairment charges that may result if we are required to revalue such intangible assets.
The market price for our common stock could fluctuate significantly for various reasons, many of which are outside our control, including those described above and the following: ● our operating and financial performance and prospects; ● future sales of substantial amounts of our common stock in the public market, including but not limited to shares we may issue as consideration for acquisitions or investments; ● housing and mortgage finance markets; ● our quarterly or annual earnings or those of other companies in our industry; ● the public’s reaction to our press releases, other public announcements and filings with the SEC; ● changes in recommendations or analysis of our prospects by securities analysts who track our common stock; ● market and industry perception of our success, or lack thereof, in pursuing our growth strategy; ● strategic actions by us or our competitors, such as acquisitions or restructurings; ● actual or potential changes in laws, regulations and regulatory interpretations; ● changes in interest rates; ● changes in demographics relating to housing such as household formation or other consumer preferences toward home ownership; ● changes in accounting standards, policies, guidance, interpretations or principles; ● arrival and departure of key personnel; ● the filing of and/or adverse resolution of new or pending litigation or regulatory proceedings against us; and ● changes in general market, economic and political conditions in the United States and global economies.
The market price for our common stock could fluctuate significantly for various reasons, many of which are outside our control, including those described above and the following: ● our operating and financial performance and prospects; ● future sales of substantial amounts of our common stock in the public market, including but not limited to shares we may issue as consideration for acquisitions or investments; ● housing and mortgage finance markets; ● our quarterly or annual earnings or those of other companies in our industry; ● the public’s reaction to our press releases, other public announcements and filings with the SEC; ● changes in or cessation of recommendations or analysis of our prospects by securities analysts who track our common stock; ● market and industry perception of our success, or lack thereof, in pursuing our growth strategy; ● strategic actions by us or our competitors, such as acquisitions or restructurings; ● actual or potential changes in laws, regulations and regulatory interpretations; ● changes in interest rates; ● changes in demographics relating to housing such as household formation or other consumer preferences toward home ownership; ● changes in accounting standards, policies, guidance, interpretations or principles; ● arrival and departure of key personnel; ● the filing of and/or adverse resolution of new or pending litigation or regulatory proceedings against us; and ● changes in general market, economic and political conditions in the United States and global economies.
We may bring lawsuits to protect against the potential infringement of our intellectual property rights and other companies, including our competitors, could make claims against us alleging our infringement of their intellectual property rights. 14 There can be no assurance that we would prevail in such lawsuits. Any significant impairment of our intellectual property rights could harm our business.
We may bring lawsuits to protect against the potential infringement of our intellectual property rights and other companies, including our competitors, could make claims against us alleging our infringement of their intellectual property rights. There can be no assurance that we would prevail in such lawsuits. Any significant impairment of our intellectual property rights could harm our business.
In addition, we may incur significant costs for remediation that may include liability for stolen assets or information, repair of system damage and compensation to clients, customers and business partners. We may also be subject to legal claims, government investigations and additional state and federal statutory requirements.
In addition, we may incur significant costs for remediation that may include liability for stolen assets or information, repair of system damage and compensation to clients, agents, customers and business partners. We may also be subject to legal claims, government investigations and additional state and federal statutory requirements.
Further, if legal standards for classification of real estate 18 professionals as independent contractors change or appear to be changing, it may be necessary to modify our compensation and benefits structure for our affiliated real estate professionals in some or all of our markets, including by paying additional compensation or reimbursing expenses.
Further, if legal standards for classification of real estate professionals as independent contractors change or appear to be changing, it may be necessary to modify our compensation and benefits structure for our affiliated real estate professionals in some or all of our markets, including by paying additional compensation or reimbursing expenses.
The introduction and integration of emerging technologies into the real estate industry and any delay or inability to successfully integrate such technologies into our business or the businesses of our real estate professionals could result in competitive harm. The real estate brokerage industry is susceptible to disruption by emerging technologies, particularly artificial intelligence and machine learning.
The introduction and integration of emerging technologies into the real estate industry and any delay or inability to successfully integrate such technologies into our business or the businesses of our real estate professionals could result in competitive harm. The real estate brokerage industry is susceptible to disruption by emerging technologies, particularly artificial intelligence (“AI”) and machine learning.
Adverse outcomes in legal and regulatory actions against other companies, brokers, and agents in the residential and commercial real estate industry may adversely impact the financial condition of the Company and our real estate brokers and agents when those matters relate to business practices shared by the Company, our real estate brokers and agents, or our industry at large.
Adverse outcomes in legal and regulatory actions against other companies, brokers, and agents in the residential and commercial real estate industry may adversely impact the financial condition of the Company and our real estate brokers and agents when 20 those matters relate to business practices shared by the Company, our real estate brokers and agents, or our industry at large.
A violation of any of these applicable laws could have a material adverse effect on our business. 17 Maintaining legal compliance is challenging and increases our costs due to resources required to continually monitor business practices for compliance with applicable laws, rules and regulations and to monitor changes in the applicable laws themselves.
A violation of any of these applicable laws could have a material adverse effect on our business. Maintaining legal compliance is challenging and increases our costs due to resources required to continually monitor business practices for compliance with applicable laws, rules and regulations and to monitor changes in the applicable laws themselves.
Our competitors may have access to greater financial resources than us, allowing them to undertake expensive local advertising or marketing efforts. In addition, our 15 competitors may be able to leverage local relationships, referral sources and strong local brand and name recognition that we have not established.
Our competitors may have access to greater financial resources than us, allowing them to undertake expensive local advertising or marketing efforts. In addition, our competitors may be able to leverage local relationships, referral sources and strong local brand and name recognition that we have not established.
Our competitors could, as a result, have greater leverage in attracting new and established agents in the market and in generating business among local consumers. Our ability to grow in the local markets that we serve will depend on our ability to compete with these local brokerages.
Our competitors could, as a result, have greater leverage in attracting new and established agents in the 19 market and in generating business among local consumers. Our ability to grow in the local markets that we serve will depend on our ability to compete with these local brokerages.
The rate of growth of our agent and broker base cannot be predicted and is subject to many factors outside of our control, including actions taken by our competitors and macroeconomic factors affecting the real estate industry in general.
The rate of growth of our agent and broker base cannot be predicted and is 17 subject to many factors outside of our control, including actions taken by our competitors and macroeconomic factors affecting the real estate industry in general.
In the event we 19 or the vendors with which we contract to provide services on behalf of our customers were to suffer a breach of personal information, our customers and independent agents could terminate their business with us.
In the event we or the vendors with which we contract to provide services on behalf of our customers were to suffer a breach of personal information, our customers and independent agents could terminate their business with us.
Factors that can contribute to a material decrease in brokerage commissions include regulation, litigation (including pending litigation described elsewhere in this Annual Report), the rise of certain competitive brokerage or non-traditional competitor modes, an increase in the popularity of discount brokers and agents, increased adoption of flat fees, commission models with more competitive rates, rebates or lower commission rates on transactions, adverse outcomes of pending antitrust litigation across our industry, as well as other competitive factors.
Factors that can contribute to a material decrease in brokerage commissions include regulation, litigation (including pending litigation and industry practice changes described elsewhere in this Annual Report), the rise of certain competitive brokerage or non-traditional competitor modes, an increase in the popularity of discount brokers and agents, increased adoption of flat fees, commission models with more competitive rates, rebates or lower commission rates on transactions, adverse outcomes of pending antitrust litigation across our industry, as well as other competitive factors.
Although we employ measures designed to prevent, detect, 11 address and mitigate these threats (including access controls, data encryption, vulnerability assessments and maintenance of backup and protective systems), cybersecurity incidents, depending on their nature and scope, could potentially result in the misappropriation, destruction, corruption, or unavailability of critical data and confidential or proprietary information (our own or that of third parties, including potentially sensitive personal information of our clients and customers) and the disruption of business operations.
Although we employ measures designed to prevent, detect, address and mitigate these threats (including access controls, data encryption, vulnerability assessments and maintenance of backup and protective systems), cybersecurity incidents, depending on their nature and scope, could potentially result in the misappropriation, destruction, corruption, or unavailability of critical data and confidential or proprietary information (our own or that of third parties, including potentially sensitive personal information of our clients, agents, and customers) and the disruption of business operations.
Expanding our service offerings could involve significant up-front costs that may only be recovered after lengthy periods of time. The barrier to entry in new real estate markets is low given our cloud-based operating model; however, attempts to pursue new business opportunities could result in a disproportionate increase in our expenses and in reduced profit margins.
Expanding our service offerings could involve significant up-front costs that may only be recovered after lengthy periods of time. The barrier to entering in new real estate markets is low given our cloud-based operating model; however, attempts to pursue new business opportunities could result in a disproportionate increase in our expenses and in reduced profit margins.
We are subject to risk of and are from time to time involved in, or may in the future be subject to, claims, suits, government investigations and proceedings arising from our business, including actions with respect to securities, intellectual property, privacy, information security, data protection or law enforcement matters, tax matters, labor and employment, including claims challenging the classification of our agents and brokers as independent contractors and compliance with wage and hour regulations and claims alleging violations of RESPA or state consumer fraud statutes and commercial arrangements.
We are subject to risk of and are from time to time involved in, or may in the future be subject to, claims, suits, government investigations and proceedings arising from our business, including, but not limited to, actions with respect to securities, intellectual property, privacy, information security, data protection or law enforcement matters, tax matters, labor and employment, including claims challenging the classification of our agents and brokers as independent contractors and compliance with wage and hour regulations, and claims alleging violations of RESPA or state consumer fraud statutes and commercial arrangements.
We must also compete with technology companies for developers with high levels of experience in designing, developing and managing cloud-based software, as well as for skilled service and operations professionals and we may not be successful in attracting and retaining the professionals we need.
We must also compete with technology companies for developers with high levels of experience in designing, developing and managing cloud-based software, as well as for skilled service and operations professionals and we may not be successful in attracting and retaining the highly skilled professionals and agents we need.
For example, we may allocate resources to acquiring lower margin brokerage models and have invested in the development of a mortgage servicing division, a commercial real estate division, a title and escrow company, a mortgage lending company, a personal development company or a continuing education division.
For example, we may allocate resources to acquiring lower margin brokerage models and have invested in the development of a mortgage servicing division, a commercial real estate division, title and escrow companies, a mortgage lending company, and a personal and continuing education company.
Our value proposition for agents and brokers includes allowing them to participate in the revenues of our Company and is not typical in the real estate industry. If agents and brokers do not understand our value proposition, we may not be able to attract, retain and incentivize agents.
Our value proposition for agents and brokers includes allowing them to participate in the revenues of our Company and is not typical in the real estate industry. If agents and brokers do not understand our unique value propositions, we may not be able to attract, retain and incentivize agents.
In addition, while we disclose our information collection and dissemination practices in a published privacy statement on our websites, which we may modify from time to time, we may be subject to legal claims, government action and damage to our reputation if we act or are perceived to be acting inconsistently with the terms of our privacy statement, customer expectations or state, national and international regulations.
In addition, while we disclose our information collection and dissemination practices in the published privacy statements on our various websites, which we may modify from time to time, we may be subject to legal claims, government action and damage to our reputation if we act or are perceived to be acting inconsistently with the terms of our privacy statement, customer expectations or state, national and international regulations.
Macroeconomic conditions that could adversely impact the growth of the real estate market and have a material adverse effect on our business include, but are not limited to, economic slowdown or recession, increased unemployment, increased energy costs, reductions in the availability of credit or higher interest rates, increased costs of obtaining mortgages, an increase in foreclosure activity, inflation, disruptions in capital markets, declines in the stock market, adverse tax policies or changes in other regulations, lower consumer confidence, lower wage and salary levels, war, terrorist attacks or other geopolitical and security issues, including Russia’s ongoing war with Ukraine, the conflict between Israel and Hamas and rising tensions between China and Taiwan, natural disasters or adverse weather events, or the public perception that any of these events may occur.
Macroeconomic conditions that could adversely impact the growth of the real estate market and have a material adverse effect on our business include, but are not limited to, economic slowdown or recession, increased unemployment, increased energy costs, reductions in the availability of credit or higher interest rates, increased costs of obtaining mortgages, an increase in foreclosure activity, inflation, disruptions in capital markets, declines in the stock market, adverse tax policies or changes in other regulations, lower consumer confidence, lower wage and salary levels, war, terrorist attacks or other geopolitical and security issues, including Russia’s ongoing war with Ukraine, the conflict between Israel and Palestine and rising tensions between China and Taiwan as well as between China and the U.S., natural disasters or adverse weather events, or the public perception that any of these events may occur.
Except as set forth in Note 13 – Commitments and Contingencies to the consolidated financial statements included elsewhere within this Annual Report, we are not involved in any material pending legal proceedings and there are no proceedings in which any of our directors, officers or affiliates is an adverse party or has a material interest adverse to our interest.
Except as set forth in Note 14 – Commitments and Contingencies to the consolidated financial statements included elsewhere within this Annual Report, we are not involved in any material pending legal proceedings and there are no known proceedings in which any of our directors, officers or affiliates is an adverse party or has a material interest adverse to our interest.
In addition, provisions of our amended and restated certificate of incorporation and amended and restated bylaws may make it more difficult 21 for, or prevent a third party from, acquiring control of us without the approval of our Board of Directors.
In addition, provisions of our restated certificate of incorporation and restated bylaws may make it more difficult for, or prevent a third party from, acquiring control of us without the approval of our Board of Directors.
In addition, changes in executives and key personnel could be disruptive to our business. We may not be able to utilize a portion of our net operating loss or research tax credit carryforwards, which may adversely affect our profitability. As of December 31, 2023, we had federal, state and foreign net operating losses carryforward due to prior years’ losses.
In addition, changes in executives and key personnel could be disruptive to our business. We may not be able to utilize a portion of our net operating loss or research tax credit carryforwards, which may adversely affect our profitability. As of December 31, 2024, we had federal, state and foreign net operating losses carryforwards due to prior years’ losses.
In addition, our competitors or other third parties may incorporate artificial intelligence and emerging technologies into their products or operations more quickly or more successfully than we do, which could impair our ability to compete effectively. Additionally, artificial intelligence algorithms and other emerging technologies may be flawed and datasets underlying such technologies may be insufficient or contain biased information.
In addition, our competitors or other third parties may incorporate AI and emerging technologies into their products or operations more quickly or more successfully than we do, which could impair our ability to compete effectively. Additionally, AI algorithms and other emerging technologies may be flawed and datasets underlying such technologies may be insufficient or contain biased information.
Integrating advancements like natural language processing, artificial intelligence, and machine learning is vital for optimizing efficiency and reducing operational costs for real estate brokerages, professionals, and clients. These tools have the potential to streamline operations, enhance client interactions, and provide insights derived from vast data sets.
Integrating advancements like natural language processing, AI, and machine learning is vital for optimizing efficiency and reducing operational costs for real estate brokerages, professionals, and clients. These tools have the potential to streamline operations, enhance client interactions, and provide insights derived from vast data sets.
As the number of agents and brokers in our company grows, our success will depend on our ability to expand, maintain and improve the technology that supports our business operations, including, but not limited to, our cloud office platform, as well as our ability to adopt and integrate new technologies, including, but not limited to, machine learning and artificial intelligence solutions.
As the number of agents and brokers in our company grows, our success will depend on our ability to expand, maintain and improve the technology that supports our business operations, including, but not limited to, our cloud office platform, as well as our ability to adopt and integrate new technologies, including, but not limited to, machine learning and AI solutions.
Our policy and safeguards could be deemed insufficient if third parties with whom we have shared personal information fail to protect the privacy of that information.
Our policies and safeguards could be deemed insufficient if third parties with whom we have shared personal information fail to protect the privacy of that information.
Our revenue and operating margins each quarter will remain subject to seasonal fluctuations, poor weather and natural disasters and macroeconomic market changes that may make it difficult to compare or analyze our financial performance effectively across successive quarters. 10 General changes in consumer attitudes and behaviors could negatively impact home sale transaction volume.
Our revenue and operating margins each quarter will remain subject to seasonal fluctuations, poor weather and natural disasters and macroeconomic market changes that may make it difficult to compare or analyze our financial performance effectively across successive quarters. 12 General changes in consumer attitudes and behaviors could negatively impact home sale transaction volume and our business model.
If we fail to attract new personnel or fail to retain and motivate our current personnel, our growth prospects could be severely harmed. Our business, financial condition and reputation may be substantially harmed by security breaches, interruptions, delays and failures in our systems and operations.
If we fail to attract and retain new personnel or agents or fail to retain and motivate our current personnel and agents, our growth prospects and financial performance could be severely harmed. 13 Our business, financial condition and reputation may be substantially harmed by security breaches, interruptions, delays and failures in our systems and operations.
The Company believes that it continues to be well positioned for growth in the current economic climate, due to our strong base of agent support, and the superior agent value proposition enabled by our efficient operating model, with lower fixed costs and no brick-and-mortar locations, but we cannot provide assurances that our operating results or cash flows will not be materially impacted by the macroeconomic factors.
The Company believes that it continues to be well positioned for growth in the current economic climate, due to our strong base of agent support, and the superior agent value proposition enabled by our efficient operating model, with lower fixed costs and no brick-and-mortar locations, but we cannot provide assurances that our operating results or cash flows will not be materially impacted by macroeconomic factors such as inflation and interest rates.
In general, the laws, rules and regulations that apply to our business practices include, without limitation, the Real Estate Settlement Procedures Act (“RESPA”), the federal Fair Housing Act, the Dodd-Frank Act, the Exchange Act and federal advertising and other laws, as well as comparable state statutes; rules of trade organizations such as NAR, local MLSs and state and local AORs; licensing requirements and related obligations that could arise from our business practices relating to the provision of services other than real estate brokerage services, including without limitation, our mortgage lending services; privacy regulations relating to our use of personal information collected from the registered users of our websites; laws relating to the use and publication of information through the internet; and state real estate brokerage and mortgage lending licensing requirements, as well as statutory due diligence, disclosure, record keeping and standard-of-care obligations relating to these licenses.
In general, the laws, rules and regulations that apply to our business practices include, without limitation, the RESPA, the federal Fair Housing Act, the Dodd-Frank Act, the Exchange Act and federal advertising and other laws, as well as comparable state statutes; rules of trade organizations such as NAR, local MLSs and state and local Association of Realtors; licensing requirements and related obligations that could arise from our business practices relating to the provision of services other than real estate brokerage services, including without limitation, our mortgage lending services; privacy regulations relating to our use of personal information collected from the registered users of our websites; laws relating to the use and publication of information through the internet; and state real estate brokerage and mortgage lending licensing requirements, as well as statutory due diligence, disclosure, record keeping and standard-of-care obligations relating to these licenses.
Such litigation and other proceedings may include, but are 16 not limited to, the currently pending antitrust litigation as disclosed in Note 13 – Commitments and Contingencies to the consolidated financial statements included elsewhere within this Annual Report.
Such litigation and other proceedings may include, but are not limited to, the currently pending antitrust litigation as disclosed in Note 14 – Commitments and Contingencies to the consolidated financial statements included elsewhere within this Annual Report.
Our systems and operations are vulnerable to security breaches, interruption or malfunction due to events beyond our control, including natural disasters, such as earthquakes, fire and flood, power loss, telecommunication failures, break-ins, sabotage, computer viruses, intentional acts of vandalism and similar events.
Our systems and operations are vulnerable to security breaches, interruption or malfunction due to events beyond our control, including natural disasters, such as earthquakes, fires and floods, power loss, telecommunication failures, break-ins, sabotage, computer viruses, intentional acts of vandalism and similar events.
In addition, we rely on third-party vendors to provide the cloud office platform and to provide additional systems and related support. If we cannot continue to retain these services on acceptable terms, our access to these systems and services could be interrupted.
In addition, we rely on third-party vendors to provide key components of our cloud office platform and to provide additional systems and related support. If we cannot continue to retain these services on acceptable terms, our access to these systems and services could be interrupted.
Because the real estate industry relies on home sale transactions, climate crises can exacerbate negative financial results for real estate companies operating in particularly affected areas. Risks Related to our General Business and Operations We may be unable to attract and retain additional qualified personnel. To execute our business strategy, we must attract and retain highly qualified personnel.
Because the real estate industry relies on home sale transactions, climate crises can exacerbate negative financial results for real estate companies operating in particularly affected areas. Risks Related to our General Business and Operations We may be unable to attract and retain qualified personnel and agents.
Inflation and rising interest rates have and may continue to contribute to declining real estate transaction volumes, which have and may continue to materially impact operating results, profits and cash flows. Inflation and rising interest rates have generally impacted real estate transaction volumes in the U.S., Canada and other international markets.
Inflation and relatively high interest rates have and may continue to contribute to declining real estate transaction volumes, which have and may continue to materially impact operating results, profits and cash flows. Inflation and relatively high interest rates in recent years have generally impacted real estate transaction volumes in the U.S., Canada and other international markets.
If our brokerage has to pay a larger share of commissions to independent real estate professionals involved in property transactions, or if our commission earnings from these transactions decrease, it could harm the operating margins of our Company.
If our brokerage has to pay a larger share of commissions to independent real estate professionals involved in property transactions, or if our commission earnings from these transactions decrease, it could materially harm the operating margins of our Company as well as our cash flows.
Participation in our revenue sharing plan represents a key component of our agent and broker value proposition. Agents and brokers may not understand or appreciate its value due to the intricacies of our programs.
Participation in our revenue sharing plan represents a key component of our agent and broker value proposition. Agents and brokers may not understand or appreciate its value due to the intricacies of our programs or changes and iterations to such programs over time.
The risks involved in our international operations and relationships that could result in losses against which we are not insured and, therefore, affect our profitability include: ● fluctuations in foreign currency exchange rates; ● exposure to local economic conditions and local laws and regulations; ● employment laws that are significantly different that U.S. laws; ● diminished ability to legally enforce our contractual rights and use of our trademarks in foreign countries; ● difficulties in registering, protecting or preserving trade names and trademarks in foreign countries; ● restrictions on the ability to obtain or retain licenses required for operations; ● withholding and other taxes on third-party cross-border transactions as well as remittances and other payments by subsidiaries; ● onerous requirements, subject to broad interpretation, for indirect taxes and income taxes that can result in audits with potentially significant financial outcomes; ● changes in foreign taxation structures; ● compliance with the Foreign Corrupt Practices Act, the U.K.
The risks involved in our international operations and relationships that could result in losses against which we are not insured and, therefore, affect our profitability include: ● fluctuations in foreign currency exchange rates, foreign exchange controls, and limitations on the repatriation of funds; ● exposure to local economic conditions and local laws and regulations; 16 ● exposure to political, economic, legal, regulatory and social conditions, or instability, and economic and political tensions between governments; ● employment laws that are significantly different that U.S. laws; ● diminished ability to legally enforce our contractual rights and use of our trademarks in foreign countries; ● difficulties in registering, protecting or preserving trade names and trademarks in foreign countries; ● restrictions on the ability to obtain or retain licenses required for operations; ● withholding and other taxes on third-party cross-border transactions as well as remittances and other payments by subsidiaries; ● onerous requirements, subject to broad interpretation, for indirect taxes and income taxes that can result in audits with potentially significant financial outcomes; ● changes in foreign taxation structures; ● compliance with the U.S.
As part of our business and growth strategy, we evaluate acquisitions of, or investments in, a wide array of potential strategic opportunities, including third-party technologies and businesses, as well as other real estate brokerages. If we are not able to effectively integrate acquired businesses and assets or successfully execute joint venture strategies, our operating results and prospects could be harmed.
As part of our business and growth strategy, we evaluate acquisitions of, or investments in, a wide array of potential strategic opportunities, including third-party technologies and businesses complimentary to our brokerage services. If we are not able to effectively integrate acquired businesses and assets or successfully execute joint venture strategies, our operating results and prospects could be harmed.
Home sale transaction volume can be impacted by natural disasters and other climate-related interruptions. Natural disasters are occurring more frequently and/or with more intense effects and may impact general population trends.
Home sale transaction volume can be impacted by natural disasters and other climate-related interruptions. Natural disasters, such as hurricanes, flooding and wildfires, are occurring more frequently and/or with more intense effects and may impact general population trends.
In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, our ability to utilize net operating loss carryforwards or other tax attributes, in any taxable year, may be limited if we experience an "ownership change.” A Section 382 “ownership change” generally occurs if one or more stockholders or groups of stockholders who own at least 5% of our stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period.
A nominal portion of our net operating loss may expire, increasing future income tax liabilities which may adversely affect our profitability. 14 In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, our ability to utilize net operating loss carryforwards or other tax attributes, in any taxable year, may be limited if we experience an "ownership change.” A Section 382 “ownership change” generally occurs if one or more stockholders or groups of stockholders who own at least 5% of our stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period.
Home sales in successive quarters can fluctuate widely due to a wide variety of factors, including holidays, national or international emergencies, the school year calendar’s impact on timing of family relocations, interest rate changes, speculation of pending interest rate changes and the overall macroeconomic market.
Home sales in successive quarters can fluctuate significantly due to a wide variety of factors, including holidays, national or international emergencies, the school year calendar’s impact on timing of family relocations, interest rate changes, speculation of pending interest rate changes, natural disasters, including hurricanes, flooding and wildfires, and the overall macroeconomic market.
The declaration, payment and amount of any future dividends will be made at the discretion of the Board of Directors and will depend upon, among other things, the results of operations, cash flows and financial condition, operating and capital requirements and other factors as the Board of Directors considers relevant.
The declaration, payment, and amount of any future dividends will be made at the discretion of 25 the Board of Directors and will depend upon, among other things, the Company’s results of operations, cash flows, financial condition, operating and capital requirements, and other factors deemed relevant by the Board of Directors.
The U.S. home inventory levels have been low throughout 2023 and 2022. Continuing constraints on home inventory levels may adversely impact the volume of home sale transactions closed by our brokers and agents and, as such, could have a material adverse effect on our business and profitability.
The U.S. home inventory levels have been low throughout 2023 and 2022, with a moderate rebound in 2024. Continuing or increasing constraints on home inventory levels may adversely impact the volume of home sale transactions closed by our brokers and agents and, as such, could have a material adverse effect on our business and profitability.
Except for our employed state brokers and commission-only employees, all real estate professionals in our brokerage operations have been retained as independent contractors, either directly or indirectly through third-party entities formed by these independent contractors for their business purposes.
Except for our employed state brokers, commission-only employees, and where otherwise dictated by local law, all other real estate agent professionals in our brokerage operations have been retained as independent contractors, either directly or indirectly through third-party entities formed by these independent contractors for their business purposes.
Because we may not pay any cash dividends on our shares of common stock in the near future, our stockholders may not be able to receive a return on their shares unless they sell them. On August 4, 2021, the Company’s Board of Directors declared and subsequently paid its first cash dividend.
Because there is no guarantee that we will continue to pay cash dividends on our shares of common stock in the future, our stockholders may not be able to receive a return on their shares unless they sell them. ​ On August 4, 2021, the Company’s Board of Directors declared and subsequently paid its first cash dividend.
Our business and particularly our cloud-based platform, is reliant on the uninterrupted functioning of our information technology systems. The secure processing, maintenance and transmission of information are critical to our operations, especially the processing and closing of real estate transactions.
Our business and particularly our cloud-based platform, is reliant on the uninterrupted functioning of our information technology systems. The secure processing, maintenance and transmission of information are critical to our operations, especially the processing and closing of real estate transactions, which are increasingly targeted by wire fraud schemes.
In addition, in making employment decisions, particularly in the software industry, job candidates often consider the value of the stock options or other equity incentives they are to receive in connection with their employment. If the price of our stock declines or continues to experience significant volatility, our ability to attract or retain key employees may be adversely affected.
In addition, in making employment or affiliation decisions, candidates and agents often consider the value of the stock options or other equity incentives they are to receive in connection with their employment or affiliation. If the price of our stock declines or experiences significant volatility, our ability to attract or retain key employees and agents may be adversely affected.
To mitigate these risks, we have executed contractual agreements with our real estate professionals that mandate compliance with applicable laws and adherence to our established policies and procedures, and stipulate potential liabilities for agents in the event of contractual breaches.
To 18 mitigate these risks, we have executed contractual agreements with our real estate professionals that mandate compliance with applicable laws and adherence to our established policies and procedures, and stipulate potential liabilities for agents in the event of contractual breaches. However, no mitigation efforts can eliminate all risk.
In 2022 and 2023, the Company has experienced declining transaction volume, which has had an impact on operating results. If we are not able to organically grow our market share, to offset the declining transactions, our operating results, profits and cash flow may be materially impacted in the event interest rates stay level or continue to rise.
In 2024 and 2023, the Company has experienced declining transaction volume, which has had an impact on operating results. If we are not able to organically grow our market share, to offset declining transactions, our operating results, profits and cash flow may be materially impacted.
Alternatively, excessive home inventory levels can contribute to a reduction in home values, which can result in some potential home sellers deferring entry into the residential real estate market.
Insufficient home inventory levels can cause a reduction in housing affordability, which can result in potential homebuyers deferring entry or reentry into the residential real estate market. Alternatively, excessive home inventory levels can contribute to a reduction in home values, which can result in some potential home sellers deferring entry into the residential real estate market.
Any such compromises to our security could cause harm to our reputation, which could cause customers to lose trust and confidence in us or could cause agents and brokers to stop working for us.
Any such compromises to our security could cause harm to our reputation, which could cause clients, agents and customers to lose trust and confidence in us or could cause agents and brokers to unaffiliate with us.
Such matters may include, without limitation, RESPA, Telephone Consumer Protection Act of 1991 and state consumer protection law, antitrust and anticompetition, and worker classification claims.
Such matters may include, without limitation, RESPA, TCPA and state consumer protection law, antitrust and anticompetition, and worker classification claims.
On January 12, 2024, Glenn Sanford and Penny Sanford filed an amended Schedule 13D with the Securities and Exchange Commission, which disclosed that they beneficially owned approximately 45.73% of our outstanding common stock as of November 30, 2023 and that they had agreed to vote their shares as a group with respect to the election of directors and any other matter on which our shares of common stock are entitled to vote.
On February 19, 2025, Glenn Sanford and Penny Sanford filed an amended Schedule 13D with the Securities and Exchange Commission, which disclosed that they beneficially owned approximately 44.77% of our outstanding common stock as of December 31, 2024 and that they had agreed to vote their shares as a group with respect to the election of directors and any other matter on which our shares of common stock are entitled to vote.
If we fail, or we have alleged to have failed, to comply with any existing or future applicable laws, rules and regulations, we could be subject to lawsuits and administrative complaints and proceedings, as well as criminal proceedings. Our noncompliance could result in significant defense costs, settlement costs, damages and penalties.
If we fail, or we are alleged to have failed, to comply with any existing or future applicable laws, rules and regulations, we could be subject to lawsuits and administrative complaints and proceedings, as well as criminal proceedings.
Our business licenses could be suspended or revoked, our business practices enjoined, or we could be required to modify our business practices, which could materially impair, or even prevent, our ability to conduct all or any portion of our business.
Our noncompliance could result in significant defense costs, settlement costs, damages and penalties. 21 Our business licenses could be suspended or revoked, our business practices enjoined, or we could be required to modify our business practices, which could materially impair, or even prevent, our ability to conduct all or any portion of our business.
Cybersecurity incidents could disrupt our business operations, result in the loss of critical and confidential information, adversely impact our reputation and harm our business. Cybersecurity threats and incidents directed at us could range from uncoordinated individual attempts to gain unauthorized access to information technology systems to sophisticated and targeted measures aimed at disrupting business or gathering personal data of customers.
Cybersecurity threats and incidents directed at us could range from uncoordinated individual attempts to gain unauthorized access to information technology systems to sophisticated and targeted measures aimed at disrupting business or gathering personal data of clients, agents, or customers.
Our business could be negatively impacted by any rising interest rate environment. As mortgage rates rise, the number of home sale transactions may decrease as potential home sellers choose to stay with their lower mortgage rate rather than sell their home and pay a higher mortgage rate with the purchase of another home.
As mortgage rates rise, the number of home sale transactions may decrease as potential home sellers choose to stay with their lower mortgage rate rather than sell their home and pay a higher mortgage rate with the purchase of another home. Similarly, in higher interest rate environments, potential homebuyers may choose to rent rather than pay higher mortgage rates.
Additionally, bad actors are increasingly using artificial intelligence technology to launch more automated, targeted and coordinated attacks generally. In the ordinary course of our business, we and our agents and brokers collect and store sensitive data, including proprietary business information and personal information about our clients and customers.
Additionally, bad actors are increasingly using AI technology to launch more automated, targeted, and coordinated attacks, including deep-fake impersonations and other techniques that could facilitate wire fraud or other fraudulent activities. In the ordinary course of our business, we and our agents and brokers collect and store sensitive data, including proprietary business information and personal information about our clients.
Future guidance from 12 the Internal Revenue Service and other tax authorities with respect to the Tax Act may affect us, and certain aspects of the Tax Act could be repealed or modified in future legislation.
Future guidance from the Internal Revenue Service and other tax authorities with respect to the Tax Act may affect us, and certain aspects of the Tax Act could be repealed or modified in future legislation. In addition, it is uncertain if, and to what extent, various states will conform to the Tax Act or any newly enacted federal tax legislation.
In the future we could incur substantial costs, penalties and damages, including back pay, unpaid benefits, taxes, expense reimbursement and attorneys’ fees, in defending future challenges by our affiliated real estate professionals to our employment classification or compensation practices.
In the future, we could incur substantial costs, penalties and damages, including back pay, unpaid benefits, taxes, expense reimbursement and attorneys’ fees, in defending future challenges by our affiliated real estate professionals to our employment classification or compensation practices. 22 We are and may, in the future, be blocked from or limited in providing our agent compensation plans in certain jurisdictions and may be required to modify our business model in those jurisdictions as a result .
Additionally, concern among potential homebuyers or sellers could keep them from using our services or require us to incur significant expense to alter our business practices or educate them about how we use personal information. SUCCESS Lending and SUCCESS Franchising are relatively new business initiatives with regulatory and compliance risks, many of which are beyond our control.
Additionally, concern among potential homebuyers or sellers could keep 23 them from using our services or require us to incur significant expense to alter our business practices or educate them about how we use personal information.
Our international operations are subject to risks not generally experienced by our U.S. operations. We have operations in Canada, the U.K., Australia, South Africa, India, Mexico, Portugal, France, Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Panama, Germany, the Dominican Republic, Greece, New Zealand, Chile, Poland, and Dubai.
We have operations in Canada, the U.K., Australia, South Africa, India, Mexico, Portugal, France, Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Panama, Germany, the Dominican Republic, Greece, New Zealand, Chile, Poland, and Dubai and expect to expand into Türkiye, Peru and Egypt, currently expected to be launched in 2025.
As an example, in the matter of Burnett v. National Association of Realtors (U.S. District Court for the Western District of Missouri), a federal jury found NAR and certain other remaining brokerage defendants liable for $1.8 billion in damages related to allegations of breach of federal and state antitrust laws, which matter remains subject to final court approval.
As an example, in the matter of Burnett v. National Association of Realtors (U.S. District Court for the Western District of Missouri), a federal jury found NAR and certain other brokerage defendants liable for $1.8 billion in damages; all defendants have since settled, subject to ongoing appeals processes, which include both monetary and non-monetary settlement terms.
The Company then declared and paid subsequent dividends during each quarter of the fiscal year ended December 31, 2023. There is no assurance that future dividends will be paid and if dividends are paid, there is no assurance with respect to the amount of any such dividend.
Since then, the Company has declared and paid quarterly dividends through the fiscal year ended December 31, 2024. However, there is no assurance that future dividends will be declared or paid, and if dividends are paid, there is no assurance as to the amount or frequency of any such dividends.
The U.S. real estate market is substantially reliant on the monetary policies of the U.S. federal government and its agencies and is particularly affected by the policies of the Federal Reserve Board, which regulates the supply of money and credit in the U.S., which, in turn impacts interest rates.
The U.S. real estate market is particularly affected by the policies of the Federal Reserve Board, which regulates the supply of money and credit in the U.S., which, in turn impacts interest rates. Our business could be negatively impacted by any rising interest rate environment.
For example, we have and may continue to incorporate new technologies such as machine learning and artificial intelligence into our processes and systems, which are under increased regulatory scrutiny.
For example, we have and may continue to incorporate new technologies such as machine learning and AI—defined broadly as the use of computer systems to simulate human intelligence, including decision-making, pattern recognition, and predictive analysis—into our processes and systems, which are under increased regulatory scrutiny.
If the new technologies integrated into our products or that we use in our operations produce analyses or recommendations that are or are alleged to be deficient, inaccurate, or biased, our reputation, business, financial condition, and results of operations may be adversely affected.
If the new technologies integrated into our products or that we use in our operations produce analyses or recommendations that are or are alleged to be deficient, inaccurate, or biased, our reputation, business, financial condition, and results of operations may be adversely affected. 15 We intend to evaluate acquisitions, mergers, joint ventures or investments in third-party technologies and businesses, but we may not realize the anticipated benefits from and may have to pay substantial costs related to, any acquisitions, mergers, joint ventures, or investments that we undertake.
Further, we may be subject to claims to the extent individual employees or independent contractors breach or fail to adhere to Company policies and practices and such actions jeopardize any personal information. Our legal liability could include significant defense costs, settlement costs, damages and penalties, plus, damage our reputation with consumers, which could significantly damage our ability to attract customers.
Further, we may be subject to claims to the extent individual employees or independent contractors breach or fail to adhere to Company policies and practices and such actions jeopardize any personal information.
Bribery Act, or similar laws of other countries; and ● regional and country specific data protection and privacy laws including the European Union’s General Data Protection Regulation (“GDPR”). In addition, activities of agents and brokers outside of the U.S. are more difficult and more expensive to monitor and improper activities or mismanagement may be more difficult to detect.
In addition, activities of agents and brokers outside of the U.S. are more difficult and more expensive to monitor and improper activities or mismanagement may be more difficult to detect.
Any or all of these consequences would result in a meaningful unfavorable impact on our brand, business model, revenue, expenses, income and margins. In addition, concern among potential homebuyers or sellers about our privacy practices could result in regulatory investigations, especially in the European Union as related to the GDPR.
In addition, concern among potential homebuyers or sellers about our privacy practices could result in regulatory investigations, especially in the European Union as related to the GDPR.
We also have recorded federal research tax credits for the years 2020-2023 which will carry forward for 20 years and are expected to be fully utilized before expiration. A nominal portion of our net operating loss may expire, increasing future income tax liabilities which may adversely affect our profitability.
We also have recorded federal research tax credits for the years 2019 to 2024 which will carry forward for 20 years and are expected to be fully utilized before expiration.
Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them. Delaware law and our organizational documents may impede or discourage a takeover, which could deprive our investors of the opportunity to receive a premium for their shares.
Fluctuations in our stock price and market conditions may affect the ability of stockholders to realize a return, making it uncertain whether they will achieve their investment goals. ​ Delaware law and our organizational documents may impede or discourage a takeover, which could deprive our investors of the opportunity to receive a premium for their shares.

… 95 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

14 edited+16 added−15 removed2 unchanged
Biggest changeCybersecurity Governance eXp World Holdings, Inc.’s Board of Directors (the “Board”) is aware of the critical nature of managing risks associated with cybersecurity threats and meets regularly to discuss managing risk from cybersecurity threats, among other risks facing the Company. The Board has established oversight mechanisms to ensure effective governance in managing risks associated with cybersecurity threats.
Biggest changeFor more information regarding risks from cybersecurity threats, see “Item 1A - Risk Factors” in this Annual Report, in particular under the caption “Cybersecurity incidents could disrupt our business operations, result in the loss of critical and confidential information, adversely impact our reputation and harm our business.” Cybersecurity Governance The Company’s Board of Directors (the “Board”) is aware of the critical nature of managing risks associated with cybersecurity threats and meets regularly to discuss managing risk from cybersecurity threats, among other risks facing the Company.
This ensures the highest levels of management are knowledgeable and updated about the cybersecurity posture and potential risks facing the Company. Furthermore, cybersecurity incidents, strategic risk management decisions, and materiality analysis are escalated to the Board, ensuring that they have comprehensive oversight and can provide guidance on critical cybersecurity issues.
This ensures the highest levels of oversight are aware and updated about the cybersecurity posture and potential risks facing the 28 Company. Furthermore, cybersecurity incidents, strategic risk management decisions, and materiality analysis are escalated to the Board, ensuring that they have comprehensive oversight and can provide guidance on critical cybersecurity issues.
Engage Third Parties on Risk Management Understanding the complexity and evolving nature of cybersecurity threats, each reporting segment engages with a range of external experts, including cybersecurity assessors and consultants, to assess, identify, and manage material risks posed by cybersecurity threats, as determined by each reporting segment’s IT personnel.
Engage Third Parties on Risk Management Understanding the complexity and evolving nature of cybersecurity threats, each reporting segment may engage with a range of external experts, including cybersecurity assessors and consultants, to assess, identify, and manage material risks posed by cybersecurity threats, as determined by each reporting segment.
Where required, IT staff in each reporting segment may communicate with their counterparts in different reporting segments or with executive management of the Company to ensure compliance with cybersecurity incident and data breach reporting requirements under applicable law.
Where required, IT staff in each reporting segment may communicate with their counterparts in different reporting segments or with executive management of the Company to ensure compliance with cybersecurity incident and data breach reporting requirements under applicable law. Staff across all segments are required to complete company facilitated cybersecurity training at least annually.
Item 1C. CYBERSECURITY We recognize the critical importance of creating a multifaceted defense-in-depth cybersecurity ecosystem to protect the confidentiality, integrity, and availability of Company systems and data.
Item 1C. CYBERSECURITY We recognize the critical importance of creating a multifaceted defense-in-depth cybersecurity ecosystem to protect the confidentiality, integrity, and availability of Company systems and data. Managing Material Risk The Company’s approach to risk management is tailored to its reporting segments.
They are experienced in information security practices, having been involved in SOC 2, GDPR, CCPA, and PCI DSS compliance frameworks. ● Virbela’s Vice President of Frame. The person currently in this role has a Master in Education Technology and a decade working at the intersection of collaboration and spatial computing as a developer and technical product manager.
The person currently in this role has Master in Education Technology and a decade working at the intersection of collaboration and spatial computing as a developer and technical product manager. They also have general experience working with information security and privacy frameworks such as SOC-2, GDPR, and COPPA. The Vice President of FrameVR.io reports to the CIO.
The person currently in this role has over 15 years of experience managing enterprise level cyber security programs in various industries in addition to having a Bachelor of Science in Information Technology Management and Information Security Manager Certification. 23 ● Virbela’s Director of IT.
The person currently in this role has over 25 years of experience managing enterprise level cyber security programs in various industries in addition to having a Bachelor of Science in Information Technology Management and is a Certified Information Security Manager (CISM), along with ITIL and ISO certifications. ● North American Realty and International Realty’s Senior Director of Data Privacy & GRC.
These briefings include a broad range of topics, including: ● Current cybersecurity landscape and emerging threats; ● Status of ongoing cybersecurity initiatives and strategies in various reporting segments; ● Incident reports and learnings from any cybersecurity events; and ● Compliance with regulatory requirements and industry standards.
The CTO provides comprehensive briefings to the Nominating and Corporate Governance Committee on a quarterly basis covering a broad range of topics, including, without limitation: ● Current cybersecurity landscape and emerging threats; ● Status of ongoing cybersecurity initiatives and strategies within his purview; ● Incident reports and learnings from any cybersecurity events; and ● Compliance with regulatory requirements and industry standards.
Board of Directors Oversight The Board’s Nominating and Corporate Governance Committee is central to the Board’s oversight of cybersecurity risks and bears the primary responsibility for cybersecurity risk oversight. When required, additional information is provided from the IT management for each reporting segment for further insight and analysis.
The Board has established oversight mechanisms to manage risks associated with cybersecurity threats. Board of Directors Oversight The Board’s Nominating and Corporate Governance Committee is central to the Board’s oversight of cybersecurity risks and bears the primary responsibility for cybersecurity risk oversight.
When appropriate, each reporting segment escalates information to the CIO to ensure awareness of cybersecurity risks across the reporting segments and to enable required incident management procedures applicable to each reporting segment. The reporting segments provide analysis to aid in the remediation of cybersecurity incidents.
FrameVR.io is independently responsible for its assessments, alert monitoring, and management of cybersecurity threats. When appropriate, each reporting segment escalates information to the CEO of the Company or CTO to ensure awareness of relevant cybersecurity risks across the reporting segments and to enable required incident management procedures applicable to each reporting segment.
The CIO receives updates on any significant developments in the cybersecurity domain from each reporting segment, which the CIO then reports to the Nominating and Corporate Governance Committee, ensuring the Board’s oversight is proactive and responsive. Risk Management Personnel Primary oversight and responsibility for managing the Company’s cybersecurity risks resides with the CIO.
The CTO receives updates on any significant developments in the cybersecurity domain from North American (excluding FrameVR.io), International Realty, and, recently, Other Affiliated Services which the CTO then reports to the Nominating and Corporate Governance Committee, ensuring the Board’s oversight is proactive and responsive.
Managing Material Risk The Company’s approach to risk management is unique to each reporting segment, with Virbela and Other Affiliated Services each independently identifying, assessing, and managing their material risk from cybersecurity threats, and North American Realty and International Realty operating under a joint risk framework due to the similarities in cybersecurity risk they face.
FrameVR.io, which was moved to the North American Realty segment during the first quarter of 2025, independently identifies, assesses, and manages its material risk from cybersecurity threats, and North American Realty, International Realty, and, recently, Other Affiliated Services, operate under a joint risk framework due to the similarities in cybersecurity risk they face.
These external assets allow the reporting segment IT leaders to leverage cybersecurity tools applicable to their segment’s risks, ensuring our cybersecurity strategies and processes continue to align with business objectives and operational needs. Segment IT personnel collaborate with these third-parties to review and discuss vulnerabilities and threats, consult on security enhancements for better risk identification, and audit risk management systems.
Each reporting segment may enable external technologies and specialists, as deemed necessary by the reporting segment, to test, alert, and report on the Company’s various computing ecosystems. These external assets allow the reporting segment leaders to leverage cybersecurity tools applicable to their segment’s risks, ensuring our cybersecurity strategies and processes continue to align with business objectives and operational needs.
Additionally, he has worked in IT policy development, single sign-on implementation, and cloud security. The staff in each reporting segment have extensive knowledge of cybersecurity risk applicable to their reporting segment. Monitoring Cybersecurity Incidents Daily security assessments, alert monitoring, and the management of cybersecurity threats are the responsibility of each reporting segment.
Monitoring Cybersecurity Incidents Daily security assessments, alert monitoring, and the management of cybersecurity threats are the responsibility of each reporting segment and each reporting segment deploys an approach that is tailored to their risk environment within the Company and its overall business objectives. Notwithstanding the foregoing, Frame.
Removed
Each reporting segment has enabled external technologies and specialists, as deemed necessary by the reporting segment, to continuously test, alert, and report on the Company’s various computing ecosystems.
Added
Segment personnel that engage such third-parties collaborate with these third-parties to review and discuss vulnerabilities and threats, consult on security enhancements for better risk identification, and audit risk management systems. 26 Oversee Third -Party Risk The Company recognizes that third-party service providers may introduce cybersecurity risks related to access to certain systems and data.
Removed
Oversee Third-Party Risk Due to the risks associated with third-party access to certain systems and data in each reporting segment, when a reporting segment enters into a relationship with a third-party service provider that presents a cybersecurity risk, various security assessments may be issued by the reporting segment to enable the applicable reporting segment to identify, oversee, and manage these risks.
Added
The Company’s cybersecurity processes include documentation of certain third-party service providers’ security postures, with risk-related information recorded in TrustArc or similar internal tracking tools. Where applicable, these processes involve requesting third-party audit reports. Certain third-party relationships, including individual AI licenses and vendors onboarded through non-IT channels, may not be documented or reviewed as part of the Company’s cybersecurity processes.
Removed
The security assessments are designed to establish communication channels as between the reporting segment and the third-party for purposes of cybersecurity risk management and reporting, as well as to ensure that security controls are established as necessary to comply with that reporting segment’s security and privacy policies.
Added
Where applicable, the Company maintains written contractual provisions requiring third-party service providers to report security incidents. Any information obtained through such reporting may be reviewed and recorded by security personnel. The Company does not routinely provide feedback to third parties on identified risks but may document available security information to facilitate internal awareness.
Removed
Such assessments may include an initial assessment conducted by the IT staff of the reporting segment, an annual assessment thereafter by the IT staff of the reporting segment, and ongoing monitoring of tools deployed within the third-party’s environment by the third-party’s IT staff or equivalent thereof.
Added
When required, additional information is provided from the IT management from North American Realty and additional staff for each reporting segment for further insight and analysis. The Company is continually monitoring its cybersecurity oversight, strategy and governance for improvement and refinement.
Removed
Where applicable, the reporting segment imposes security incident reporting requirements on third-party 22 service providers via written contract in order to ensure the timely reporting of incidents.
Added
Management’s Role Managing Risk The Company’s Chief Technology Officer (“CTO”) oversees cybersecurity risks for North American Realty, International Realty, and, as of recently, Other Affiliated Services; provided, however, that cybersecurity risk management for FrameVR.io, which was moved to the North American Realty segment during the first quarter of 2025, is overseen by the Vice President of FrameVR.io, in consultation with the CTO as requested.
Removed
Information obtained in initial and ongoing assessments as well as incident reports are presented to applicable reporting segment staff who (i) review and engage the third party on preventative and responsive actions based on such assessments and reports, as applicable, and (ii) evaluate the continued relationship with the third party and terminate the relationship, if necessary.
Added
Personnel from FrameVR.io are empowered to report cybersecurity risk to their respective leaders who may then report to the Nominating and Corporate Governance Committee directly or funnel such reporting to the CEO. 27 Risk Management Personnel Primary oversight and responsibility for managing the Company’s cybersecurity risks resides with the CEO.
Removed
The Company is continually monitoring its cybersecurity oversight, strategy and governance for improvement and refinement. Management’s Role Managing Risk The Company’s Chief Information Officer (“CIO”) plays a key role in informing the Nominating and Corporate Governance Committee of cybersecurity risks across the reporting segments.
Added
With over 25 years of experience in technology leadership, entrepreneurship, and real estate innovation, his expertise lies in leveraging technology to transform traditional industries, including pioneering the first fully cloud-based real estate brokerage model. The CEO’s career began in the technology sector, where he founded eShippers.com, an eCommerce and logistics platform that integrated online storefronts with a national fulfillment network.
Removed
This management member provides comprehensive briefings to the Nominating and Corporate Governance Committee on a quarterly basis.
Added
This experience in developing scalable, technology-driven solutions laid the groundwork for his later success in building the Company . His vision for integrating advanced IT systems into real estate has driven eXp Realty’s growth to over 82,000 agents across 24 countries.
Removed
With over 25 years of experience in business and information technology management, the current Company CIO is an accomplished software executive with an exceptional record of building large-scale product delivery organizations, which include product management, engineering, information technology, and information security.
Added
He holds a degree in Economics and Computer Science from the University of Oklahoma, which supports his ability to align technology initiatives with strategic business goals. Under the CEO’s leadership, the Company continues to innovate through immersive virtual environments, advanced data systems, and scalable global operations, ensuring its position as a leader in real estate technology.
Removed
The current Company CIO is graduate of Southern Methodist University where he obtained his M.B.A. and University of Oklahoma where he received his B.S. in Computer Sciences. Accompanying the CIO with the development of the security ecosystem is key personnel at each reporting segment, including: ● North American and International Realty’s Sr. Director of Information Security.
Added
Accompanying the CEO with the development of the security ecosystem is key personnel at each reporting segment, including: ● North American Realty and International Realty’s Chief Innovation Officer. The person in this role has over 20 years of experience as a technologist, startup founder, and technology executive with expertise in software development, product management, and real estate technology innovation.
Removed
The person currently in this role has a Master of Computer Information Systems degree and has fifteen years of professional experience in IT roles, specializing in data management and security, operational reliability and assurance, and regulatory compliance.
Added
He holds a Bachelor of Arts from the College of Charleston and has led transformative technology initiatives, including two successful PropTech startup exits. ● North American Realty and International Realty’s Chief Technology Officer. The person in this role has over 20 years of experience leading global technology teams, delivering innovative software solutions, and driving business transformation.
Removed
They also have broad experience working with information security and privacy frameworks such as SOC-2, GDPR, and COPPA. ● Virbela’s President.
Added
He is experienced in building and delivering secure, scalable technology solutions, with a focus on software reliability, data integrity, and secure system architecture. He is also actively expanding his expertise in cybersecurity, focusing on cloud security, threat mitigation, and risk management to strengthen enterprise system protection.
Removed
The person currently in this role has a Doctorate of Philosophy in Consulting Psychology and over eleven (11) years of expertise designing and managing the Virbela product, including its cyber vulnerabilities, data collection, and related processes. ● Other Affiliated Services Vice President, Operations.
Added
He holds a Master of Science in Computer Science and a Bachelor of Engineering in Mechanical Engineering. He also completed a postgraduate degree in AI and machine learning from the University of Texas at Austin. ● North American Realty and International Realty’s Senior Director of Information Security.
Removed
The person currently in this role has Master of Business Administration in Accounting and Business/Management with sophisticated professional experience in software implementation and business intelligence. His experience encompasses conducting security audits, implementing intrusion detection with cloud service providers, developing access controls and API encryption, and mitigating risks through vendor relations.
Added
The person in this role has over 15 years of experience in data privacy, governance, and compliance, with expertise in managing enterprise-wide privacy programs and mitigating regulatory risks.
Removed
Each reporting segment has developed an incident response plan to pool resources that determines actions and remediation efforts, including escalation to the CIO, when necessary. Reporting to Board of Directors The CIO, in his capacity, informs the Chief Executive Officer of the Company and Chief Strategy Officer of eXp Realty, LLC of all aspects related to cybersecurity risks and threats.
Added
She holds a Master of Public Administration and a Bachelor of Science in Political Science, both from Kennesaw State University, and is a Certified Information Privacy Manager (CIPM) and Certified Data Privacy Solutions Engineer. ● Vice President, FrameVR.io.
Added
The reporting segments and FrameVR.io provide information and analysis to aid in the remediation of cybersecurity incidents. Reporting to Board of Directors The CTO , together with reporting segment and FrameVR.io key personnel listed above and with input from the CEO, inform the Nominating and Corporate Governance Committee of relevant material aspects related to cybersecurity risks and threats.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 3. LEGAL PROCEEDINGS The information set forth under “ Contingencies ” under Note 13 – Commitments and Contingencies to the consolidated financial statements included in Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report is incorporated herein by reference. Item 4. MINE SAFETY DISCLOSURES Not applicable. 24 PART II
Biggest changeItem 3. LEGAL PROCEEDINGS The information set forth under “ Contingencies ” under Note 14 – Commitments and Contingencies to the consolidated financial statements included in Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report is incorporated herein by reference. Item 4. MINE SAFETY DISCLOSURES Not applicable. 29 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+1 added−3 removed5 unchanged
Biggest changeThe following table provides information about repurchases of our common stock during the quarter ended December 31, 2023: ​ 25 ​ ​ ​ ​ ​ ​ ​ ​ ​ Period ​ Total number of shares purchased ​ Average price paid per share ​ Total number of shares purchased as part of publicly announced plans or programs (1) ​ Approximate dollar value of shares that may yet be purchased under the plans or programs 10/1/2023-10/31/2023 ​ 827,770 ​ $ 14.49 ​ 827,770 ​ $ 444,553,702 11/1/2023-11/30/2023 ​ 614,063 ​ 12.85 ​ 614,063 ​ 436,563,204 12/1/2023-12/31/2023 ​ 411,270 ​ 14.81 ​ 411,270 ​ 430,567,463 Total ​ 1,853,103 ​ $ 14.05 ​ 1,853,103 ​ ​ (1) In December 2018, the Company’s Board of Directors approved a stock repurchase program authorizing the Company to purchase its common stock.
Biggest changeRefer to Note 10 – Stockholders’ Equity to the consolidated financial statements included elsewhere within this Annual Report for more details regarding our stock repurchase program. ​ 30 The following table provides information about repurchases of our common stock during the quarter ended December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ Period ​ Total number of shares purchased ​ Average price paid per share ​ Total number of shares purchased as part of publicly announced plans or programs (1) ​ Approximate dollar value of shares that may yet be purchased under the plans or programs 10/1/2024-10/31/2024 ​ 630,215 ​ $ 13.14 ​ 630,215 ​ $ 305,706,069 11/1/2024-11/30/2024 ​ 600,792 ​ 13.81 ​ 600,792 ​ 297,424,144 12/1/2024-12/31/2024 ​ 655,913 ​ 12.69 ​ 655,913 ​ 289,144,088 Total ​ 1,886,920 ​ $ 13.21 ​ 1,886,920 ​ ​ (1) In December 2018, the Company’s Board of Directors approved a stock repurchase program authorizing the Company to purchase its common stock, which has been amended from time to time.
Company Stock Performance The following graph compares the performance of our common stock to the Standard & Poor’s (“S&P”) 500 Index, the S&P Homebuilders Select Industry Index and the S&P Internet Select Industry Index by assuming $100 was invested in each investment option as of December 31, 2018.
Company Stock Performance The following graph compares the performance of our common stock to the Standard & Poor’s (“S&P”) 500 Index, the S&P Homebuilders Select Industry Index and the S&P Internet Select Industry Index by assuming $100 was invested in each investment option as of December 31, 2019.
Holders of Record As of February 16, 2024, we had approximately 113,899 stockholders of record who hold shares of the Company’s common stock. This does not include persons whose stock is in nominee or “street name” accounts through brokers.
Holders of Record As of February 10, 2025, we had approximately 116,122 stockholders of record who hold shares of the Company’s common stock. This does not include persons whose stock is in nominee or “street name” accounts through brokers.
Dividends During 2023, the Company’s Board of Directors declared the following dividends on its common stock: Declaration Date Record Date Payable Date Per Share February 9, 2023 March 13, 2023 March 31, 2023 $0.045 April 27, 2023 May 12, 2023 May 31, 2023 $0.045 July 28, 2023 August 18, 2023 September 4, 2023 $0.050 October 25, 2023 November 16, 2023 November 30, 2023 $0.050 ​ Payment of cash dividends is at the discretion of the Company’s Board of Directors in accordance with applicable law after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs and plans for growth.
Dividends During 2024, the Company’s Board of Directors declared the following dividends on its common stock: Declaration Date Record Date Payable Date Per Share February 14, 2024 March 8, 2024 March 29, 2024 $0.050 April 24, 2024 May 13, 2024 May 27, 2024 $0.050 July 26, 2024 August 14, 2024 August 30, 2024 $0.050 November 4, 2024 November 18, 2024 December 2, 2024 $0.050 Payment of cash dividends is at the discretion of the Company’s Board of Directors in accordance with applicable law after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs and plans for growth.
No date has been established for the completion of the share repurchase program and we are not obligated to repurchase any shares. Subject to applicable corporate securities laws, repurchases may be made at such times and in such amounts as management deems appropriate or in accordance with the terms of the 10b5-1 plan.
Subject to applicable corporate securities laws, repurchases may be made at such times and in such amounts as management deems appropriate or in accordance with the terms of the 10b5-1 plan. Repurchases under the program can be discontinued at any time the Board of Directors feels additional repurchases are not warranted.
Repurchases under the program can be discontinued at any time the Board of Directors feels additional repurchases are not warranted. Any shares repurchased under the program are returned to the status of authorized but unissued shares of common stock until retired.
Any shares repurchased under the program are returned to the status of authorized but unissued shares of common stock until retired.
The S&P Internet Select Industry Index is comprised of U.S. equities of internet and direct marketing retail, internet services and infrastructure and interactive media and services companies. ​ ​ ​ ​ ​ ​ ​ ​ Year 2018 2019 2020 2021 2022 2023 EXPI $ 100.00 $ 88.00 $ 490.00 $ 524.00 $ 174.00 $ 247.00 S&P 500 Index 100.00 119.00 138.00 176.00 141.00 176.00 S&P Homebuilders Index (XHB) 100.00 114.00 146.00 219.00 156.00 253.00 S&P Internet Index (XWEB) 100.00 109.00 209.00 195.00 85.00 119.00 ​ ​ ​ Item 6. [RESERVED]
The S&P Internet Select Industry Index is comprised of U.S. equities of internet and direct marketing retail, internet services and infrastructure and interactive media and services companies. ​ ​ ​ ​ ​ ​ ​ ​ Year 2019 2020 2021 2022 2023 2024 EXPI $ 100.00 $ 557.00 $ 596.00 $ 198.00 $ 280.00 $ 211.00 S&P 500 Index 100.00 116.00 148.00 119.00 148.00 182.00 S&P Homebuilders Index (XHB) 100.00 146.00 192.00 137.00 220.00 244.00 ​ ​ ​ 31 Item 6. [RESERVED]
The stock repurchase program is more fully disclosed in Note 9 – Stockholders’ Equity to the consolidated financial statements included elsewhere in this Annual Report.
Most recently, in June 2023, the Board approved an increase to the total amount of its buyback program from $500.0 million to $1.0 billion. The stock repurchase program is more fully disclosed in Note 10 – Stockholders’ Equity to the consolidated financial statements included elsewhere in this Annual Report.
Removed
Refer to Note 9 – Stockholders’ Equity to the consolidated financial statements included elsewhere within this Annual Report for more details regarding our stock repurchase program.
Added
No date has been established for the completion of the share repurchase program and we are not obligated to repurchase any shares; however, the Board has limited the Company’s historical and ongoing repurchase program to $1.0 billion in the aggregate, inclusive of associated fees.
Removed
In November 2019, the Board amended the repurchase program, increasing the total amount authorized to be purchased from $25.0 million to $75.0 million. In December 2020, the Board approved another amendment to the repurchase program, increasing the total amount authorized to be purchased from $75.0 million to $400.0 million.
Removed
In May 2022, the Board approved an increase to the total amount of its buyback program from $400.0 million to $500.0 million. In June 2023, the Board approved an increase to the total amount of its buyback program from $500.0 million to $1.0 billion.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

85 edited+54 added−57 removed31 unchanged
Biggest changeThe following table presents our net working capital for the periods presented: ​ ​ ​ ​ ​ ​ December 31, 2023 December 31, 2022 Current assets ​ $ 266,475 ​ $ 255,113 Current liabilities ​ (141,640) ​ (127,299) Net working capital ​ $ 124,835 ​ $ 127,814 ​ ​ ​ ​ ​ As of December 31, 2023, net working capital decreased ($3.0) million, or (2)%, compared to the prior year, primarily due to a decrease in accounts receivable of ($1.3) million, partially offset by an increase in accrued liabilities of $9.2 million and an increase in cash and cash equivalents of $5.3 million.
Biggest changeThe following table presents our net working capital for the periods presented: ​ ​ ​ ​ ​ ​ December 31, 2024 December 31, 2023 Current assets ​ $ 267,972 ​ $ 266,475 Current liabilities ​ (185,853) ​ (141,660) Net working capital ​ $ 82,119 ​ $ 124,815 ​ ​ ​ ​ ​ As of December 31, 2024, net working capital decreased ($42.7) million, or (34)%, compared to the prior year, primarily due a decrease in cash and cash equivalents of ($12.3) million and an increase in the litigation contingency accrual of $34 million related to the antitrust lawsuits, partially offset by an increase in accounts receivable of $2.3 million and a decrease in accrued expenses of ($0.8) million. 42 Cash Flows The following table presents our cash flows for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 ​ 2023 Net cash provided by operating activities ​ $ 191,514 ​ $ 209,131 ​ Net cash used in investment activities ​ (19,470) ​ (13,503) ​ Net cash used in financing activities ​ (170,377) ​ (184,089) ​ Effect of changes in exchange rates on cash, cash equivalents and restricted cash ​ (2,972) ​ (38) ​ Net change in cash, cash equivalents and restricted cash ​ ($ 1,305) ​ $ 11,501 ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, 2024, cash provided by operating activities decreased (8)% compared to the same period in 2023, primarily due to lower agent equity program participation in 2024, partially offset by an increase in gross profit net of agent commission and related expenses.
Factors include, among others, (i) changes in demand for the Company’s services and changes in consumer behavior; (ii) macroeconomic conditions beyond our control; (iii) the Company’s ability to effectively maintain its infrastructure to support its operations and initiatives; (iv) the impact of governmental regulations related to the Company’s operations; (v) the outcome of ongoing antitrust litigation; and (vi) other factors, as described in this Annual Report in Part II, Item 1A, “Risk Factors.” 35 CRITICAL ACCOUNTING POLICIES AND ESTIMATES The preparation of financial statements in accordance with U.S.
Factors include, among others, (i) changes in demand for the Company’s services and changes in consumer behavior; (ii) macroeconomic conditions beyond our control; (iii) the Company’s ability to effectively maintain its infrastructure to support its operations and initiatives; (iv) the impact of governmental regulations related to the Company’s operations; (v) the outcome of ongoing antitrust litigation; and (vi) other factors, as described in this Annual Report in Part II, Item 1A, “Risk Factors.” CRITICAL ACCOUNTING POLICIES AND ESTIMATES The preparation of financial statements in accordance with U.S.
Transaction volume represents the total sales value for all transactions and is influenced 29 by several market factors, including, but not limited to, the pricing and quality of our services and market conditions that affect home sales, such as macroeconomic factors, economic growth, local inventory levels, mortgage interest rates, and seasonality.
Transaction volume represents the total sales value for all transactions and is influenced by several market factors, including, but not limited to, the pricing and quality of our services and market conditions that affect home sales, such as macroeconomic factors, economic growth, local inventory levels, mortgage interest rates, and seasonality.
Management evaluates the operating results of each of its reportable segments based upon revenue and Adjusted Segment EBITDA. Adjusted Segment EBITDA is defined by us as net income before depreciation and amortization, stock-based compensation expense, interest expense, net, income taxes, impairment expense and other items that are not core to the operating 33 activities of the Company.
Management evaluates the operating results of each of its reportable segments based upon revenue and Adjusted Segment EBITDA. Adjusted Segment EBITDA is defined by us as net income before depreciation and amortization, stock-based compensation expense, interest expense, net, income taxes, impairment expense and other items that are not core to the operating activities of the Company.
GAAP and should not be considered as an alternative to net income, operating income, or any other measures derived in accordance with U.S. GAAP. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, and a discussion of why we believe Adjusted EBITDA is useful to investors, see “Non-U.S. GAAP Financial Measures”.
GAAP and should not be considered as an alternative to net income, operating income, or any other measures derived in accordance with U.S. GAAP. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net (loss) income, and a discussion of why we believe Adjusted EBITDA is useful to investors, see “Non-U.S. GAAP Financial Measures”.
As home prices and interest rates have increased, the housing affordability index has become unfavorable. When the index is above 100, it indicates that a family earning the median income has sufficient income to purchase a median-priced home, assuming a 20 percent down payment and ability to qualify for a mortgage.
As home prices and interest rates have increased, the housing affordability index has become unfavorable. When the index is above 100, it indicates that a family earning the median income has sufficient income to purchase 34 a median-priced home, assuming a 20 percent down payment and ability to qualify for a mortgage.
The value of the stock award is amortized over this period and recognized as stock compensation expense starting on the grant date. If factors change causing different assumptions to be made in future periods, estimated compensation expense may differ significantly from that recorded in the current period.
The value of the stock award is amortized over this period and recognized as stock-based compensation expense starting on the grant date. If factors change causing different assumptions to be made in future periods, estimated compensation expense may differ significantly from that recorded in the current period.
Our future capital requirements will depend on many factors, including the outcome of pending antitrust litigation, our level of investment in technology, our rate of growth into new markets and cash used to pay quarterly cash dividends and repurchase shares of the Company’s common stock.
Our future capital requirements will depend on many factors, including the outcome of pending antitrust litigation settlement, our level of investment in technology, our rate of growth into new markets and cash used to pay quarterly cash dividends and repurchase shares of the Company’s common stock.
Significant assumptions used in determining the allocation of fair value include the following valuation techniques: the cost approach, the income approach and 36 the market approach, which are determined based on cash flow projections and related discount rates, industry indices, market prices regarding replacement cost and comparable market transactions.
Significant assumptions used in determining the allocation of fair value include the following valuation techniques: the cost approach, the income approach and the market approach, which are determined based on cash flow projections and related discount rates, industry indices, market prices regarding replacement cost and comparable market transactions.
The following discussion focuses on the operating performance of the Company for the years ended December 31, 2023 and 2022 and the financial condition of the Company as of December 31, 2023.
The following discussion focuses on the operating performance of the Company for the years ended December 31, 2024, 2023, and 2022 and the financial condition of the Company as of December 31, 2024 and 2023.
At each reporting period, we estimate and accrue revenue for closed transactions for which we are entitled to but have not yet received the closing documents due to timing of when a transaction settles. The accrual for estimated revenue was immaterial for the years ended December 31, 2023 and 2022.
At each reporting period, we estimate and accrue revenue for closed transactions for which we are entitled to but have not yet received the closing documents due to timing of when a transaction settles. The accrual for estimated revenue was immaterial for the years ended December 31, 2024 and 2023.
GAAP and should not be considered as an alternative to net income, operating income, or any other measures derived in accordance with U.S. GAAP. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, and why we believe Adjusted EBITDA is useful to investors see “Non-U.S. GAAP Financial Measures”.
GAAP and should not be considered as an alternative to net income, operating income, or any other measures derived in accordance with U.S. GAAP. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, and why we believe Adjusted EBITDA is useful to investors see “Non-U.S.
Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP. There are a number of limitations related to the use of Adjusted EBITDA compared to net income, the closest comparable U.S. GAAP measure.
Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP. There are a number of limitations related to the use of Adjusted EBITDA and Adjusted Segment EBITDA compared to net income, the closest comparable U.S. GAAP measure.
Actual costs of resolving legal claims could have a material adverse impact on our results of operations and cash flow. While the currently pending antitrust litigation presents various reasonably possible outcomes, the financial impact(s) of such litigation is not presently estimable.
Actual costs of resolving legal claims could have a material adverse impact on our results of operations and cash flow. While the currently pending derivative litigation presents various reasonably possible outcomes, the financial impact(s) of such litigation is not presently estimable.
Some of these limitations are that: ● Adjusted EBITDA excludes stock-based compensation expense related to our agent growth incentive program and stock option expense, which have been and will continue to be for the foreseeable future, significant recurring expenses in our business and an important part of our compensation strategy; and ● Adjusted EBITDA excludes certain recurring, non-cash charges such as depreciation of fixed assets, amortization of intangible assets and impairment charges related to these long-lived assets and, although these are non-cash charges, the assets being depreciated, amortized, or impaired may have to be replaced in the future.
Some of these limitations are: ● Adjusted EBITDA and Adjusted Segment EBITDA exclude stock-based compensation expense related to our agent growth incentive program and stock option expense, which have been and will continue to be for the foreseeable future, significant recurring expenses in our business and an important part of our compensation strategy; and ● Adjusted EBITDA and Adjusted Segment EBITDA exclude certain recurring, non-cash charges such as depreciation of fixed assets, amortization of intangible assets and impairment charges related to these long-lived assets and, although these are non-cash charges, the assets being depreciated, amortized, or impaired may have to be replaced in the future.
The decrease in income tax benefit was primarily attributable to the decrease in excess benefit from stock-based compensation in current year and higher non-deductible executive compensation expenses. Refer to Critical Accounting Policies and Estimates within the MD&A and Note 13 - Income Taxes to the consolidated financial statements included elsewhere in this Annual Report for further information.
The decrease in income tax benefit was primarily attributable to the decrease in excess benefit from stock-based compensation in 2023 and higher non-deductible executive compensation expenses. Refer to Critical Accounting Policies and Estimates within the MD&A and Note 13 - Income Taxes to the consolidated financial statements included elsewhere in this Annual Report for further information.
Through our cloud-based operations and technology platform, we strive to achieve customer-focused efficiencies that allow us to increase market share and attain strong returns as we scale our business within the markets in which we operate. By building partnerships and strategically deploying capital, we seek to grow the business and enter attractive vertical and adjacent markets.
Through our technology platform, we strive to achieve customer-focused efficiencies that allow us to increase market share and attain strong returns as we scale our business within the markets in which we operate. By building partnerships and strategically deploying capital, we seek to grow the business and enter attractive vertical and adjacent markets.
For information regarding the Company’s expected cash requirement related to settlement costs, see Note 13 – Commitments and Contingencies to the consolidated financial statements included elsewhere in this Annual Report .
For information regarding the Company’s expected cash requirement related to settlement costs, see Note 14 – Commitments and Contingencies to the consolidated financial statements included elsewhere in this Annual Report .
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to inform the reader about material information relevant to an assessment of the financial condition and results of operations of eXp World 26 Holdings, Inc. and its subsidiaries for the three-year period ended December 31, 2023.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to inform the reader about material information relevant to an assessment of the financial condition and results of operations of eXp World Holdings, Inc. and its subsidiaries for the three-year period ended December 31, 2024.
The rate of growth of our agent and broker base is difficult to predict and is subject to many factors outside of our control, including actions taken by our competitors and macroeconomic factors affecting the real estate industry in general including rising interest rates and declining transaction volume in the U.S.
The rate of growth of our agent and broker base is difficult to predict and is subject to many factors outside of our control, including actions taken by our competitors and macroeconomic factors affecting the real estate industry in general including interest rates, declining transaction volume in the U.S., and industry practice changes.
As NPS scores are often leading indicators to agents and employees’ future actions, we are able to learn quickly what may be a ‘pain point’ or product that is not meeting its desired objective. We then take that information and translate it into action with an effort to remediate the specific root cause(s) driving the lower score.
As NPS scores are often leading indicators to agents and employees’ future actions, we can learn quickly what may be a ‘pain point’ or program that is not meeting its desired objective. We then take that information and translate it into action with an effort to remediate the specific root cause(s) driving the lower score.
BUSINESS SEGMENT DISCLOSURES See Note 10 – Segment Information to the consolidated financial statements included elsewhere in this Annual Report for additional information regarding our business segments.
BUSINESS SEGMENT DISCLOSURES See Note 11 – Segment Information to the consolidated financial statements included elsewhere in this Annual Report for additional information regarding our business segments.
See Note 12 – Income Taxes to the consolidated financial statements included elsewhere in this Annual Report for further information related to our income tax positions. 37 Litigation We recognize expenses for legal claims when payments associated with the claims become probable and can be reasonably estimated.
See Note 13 – Income Taxes to the consolidated financial statements included elsewhere in this Annual Report for further information related to our income tax positions. 44 Litigation We recognize expenses for legal claims when payments associated with the claims become probable and can be reasonably estimated.
Revenue recognition The Company generates substantially all of its revenue from North American Realty and International Realty and generates a de minimis portion of its revenues from software subscription and professional services. North American Realty and International Realty The Company serves as a licensed broker in the areas in which it operates for the purpose of processing real estate transactions.
Revenue recognition The Company generates substantially all of its revenue from North American Realty and International Realty and generates a de minimis portion of its revenues from other affiliated professional services. North American Realty and International Realty The Company serves as a licensed broker in the areas in which it operates for the purpose of processing real estate transactions.
See Note 9 – Stockholders’ Equity to the consolidated financial statements included elsewhere in this Annual Report, for more information regarding the assumptions used in estimating the fair value of our awards.
See Note 10 – Stockholders’ Equity to the consolidated financial statements 43 included elsewhere in this Annual Report, for more information regarding the assumptions used in estimating the fair value of our awards.
We currently do not hold any bank debt, nor have we issued any debt instruments through public offerings or private placements. As of December 31, 2023, our cash and cash equivalents totaled $126.9 million. Cash equivalents are comprised of financial instruments with an original maturity of 90 days or less from the date of purchase, primarily money market funds.
We currently do not hold any bank debt, nor have we issued any debt instruments through public offerings or private placements. As of December 31, 2024, our cash and cash equivalents totaled $113.6 million. Cash equivalents are comprised of financial instruments with an original maturity of 90 days or less from the date of purchase, primarily money market funds.
An FLQA agent is an agent or broker that a participant (“sponsor”) has personally attracted to the Company and who has met specific real estate transaction volume requirements. Revenue share is paid to the sponsor from the commission earned by the Company on transactions closed by the sponsor’s FLQAs.
An FLQA agent is an agent or broker whom a participant (“sponsor”) has personally attracted to the Company and who has met specific real estate transaction volume requirements. Revenue share is paid to the sponsor from the commission earned by the Company on transactions closed by the sponsor’s FLQAs and their downline agents.
GAAP requires us to make certain judgments and assumptions, based on information available at the time of our preparation of the financial statements, in determining accounting estimates used in the preparation of the statements. Our significant accounting policies are described in Note 2 – Summary of Significant Accounting Policies to the consolidated financial statements included elsewhere in this Annual Report.
GAAP requires us to make certain judgments and assumptions, based on information available as of the reporting date of the financial statements, in determining accounting estimates used in the preparation of the statements. Our significant accounting policies are described in Note 2 – Summary of Significant Accounting Policies to the consolidated financial statements included elsewhere in this Annual Report.
Additionally, as goodwill and intangible assets associated with recently acquired businesses are recorded on the balance sheet at their estimated acquisition date fair values, those amounts are more susceptible to impairment risk if business operating results or macroeconomic conditions deteriorate. Goodwill impairment Goodwill is not amortized but is subject to impairment testing.
Additionally, as goodwill and intangible assets associated with recently acquired businesses are recorded on the balance sheet at their estimated acquisition date fair values, those amounts are more susceptible to impairment risk if business operating results or macroeconomic conditions deteriorate.
Recognition of compensation cost for an award with a performance condition is based on the probable outcome of that performance condition being met. The Company estimates the share-based liability based on estimated performance probabilities based on our most recent estimates on probable achievement of the performance measures established under our agent growth incentive program.
Recognition of compensation cost for an award with a performance condition is based on the probable outcome of that performance condition being met. The Company estimates the share-based liability based on estimated performance probabilities using our most recent estimates on probable achievement of the performance measures established under our AGIP.
GAAP financial measure, to understand and evaluate our core operating performance. This non-GAAP financial measure, which may be different than similarly titled measures used by other companies, is presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP.
These non-GAAP financial measure, which may be different than similarly titled measures used by other companies, is presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. We define the non-U.S.
The following tables present a reconciliation of Adjusted EBITDA to net income, the most comparable U.S.
The following tables present a reconciliation of Adjusted EBITDA, the most comparable U.S.
The unfavorable housing affordability index is due to increased mortgage rate conditions and higher average home prices driven by inventory levels. Existing Home Sales Transactions and Prices According to NAR, existing home sale transactions for the year ended December 2023 (preliminary) decreased to 4.09 million compared to 5.03 million for the year ended December 2022.
The unfavorable housing affordability index is due to increased mortgage rate conditions and higher average home prices driven by inventory levels. Existing Home Sales Transactions and Prices According to preliminary data from NAR, existing home sale transactions for the year ended December 2024 decreased 0.7% to 4.06 million compared to 4.09 million for the year ended December 2023.
We define the non-U.S. GAAP financial measure of Consolidated Adjusted EBITDA to mean net income, excluding other income (expense), income tax benefit (expense), depreciation, amortization, impairment charges, stock-based compensation expense and stock option expense. Adjusted Segment EBITDA is defined as operating profit plus depreciation and amortization and stock-based compensation expenses and impairment expense.
GAAP financial measure of Consolidated Adjusted EBITDA to mean net income, excluding other income (expense), income tax benefit (expense), depreciation, amortization, impairment charges, stock-based compensation expense and stock option expense. Adjusted Segment EBITDA is defined as operating profit plus depreciation and amortization and stock-based compensation expenses, impairment expense and litigation contingency expense.
As of December 31, 2023, based on our assessment of the realizability of the net deferred tax assets, we reached the conclusion that our net deferred tax assets will most likely be fully realized and therefore no valuation allowance was recorded.
As of December 31, 2024, based on our assessment of the realizability of the net deferred tax assets, we reached the conclusion that some of our net deferred tax assets will most likely not be fully realized and therefore a valuation allowance of $0.02 million was recorded.
GAAP measure of Adjusted EBITDA to assist investors in seeing our financial performance through the eyes of management and because we believe this measure provides an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.
GAAP measures of Adjusted EBITDA and Adjusted Segment EBITDA to assist investors in seeing our financial performance through the eyes of management and because we believe these measures provide additional tools for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.
For the year ended December 31, 2023, cash used in financing activities decreased primarily related to lower repurchases of our common stock of $18.9 million and increased proceeds from stock option exercises $4.3 million compared to 2022 partially offset by an increase in dividend payments of $3.3 million compared to 2022.
For the year ended December 31, 2024, cash used in financing activities decreased by (7)%, compared to the same period in 2023, primarily related to lower repurchases of our common stock of ($19.4) million compared to 2023, partially offset by decreased proceeds from stock option exercises $3.0 million and an increase in dividend payments of $1.6 million compared to 2023.
GAAP Financial Measures All dollar amounts are in USD thousands except share amounts and per share data and as otherwise noted. OVERVIEW eXp is a diversified portfolio of service-based businesses whose operations benefit substantially from utilizing our enabling technology platform. The Chief Operating Decision Maker (“CODM”) manages the business and allocates resources as four separate operating segments.
GAAP Financial Measures All dollar amounts are in USD thousands except share amounts and per share data and as otherwise noted. OVERVIEW eXp is a diversified portfolio of service-based businesses whose operations benefit substantially from utilizing our enabling technology platform.
Discussions of 2021 items and comparisons between 2022 and 2021 financial results can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2022 (the “2022 MD&A”).
Discussions of 2022 items and comparisons between 2023 and 2022 liquidity and capital resources can be found in “Management’s Discussion and Analysis Liquidity and Capital Resources” in Part II, Item 7 of the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2023 (the “2023 MD&A”).
Our current capital deployment strategy for 2024 is to utilize our cash on hand to support our agent productivity, growth initiatives and investment in technology, and to a lesser extent, for repurchases of our common stock and quarterly cash dividends.
During 2024, we utilized our cash on hand to support our agent productivity, growth initiatives and investment in technology, and to a lesser extent, for repurchases of our common stock and quarterly cash dividends.
Total revenues decreased primarily as a result of lower volume of real estate brokerage commissions, which is attributable to a decrease of overall real estate transactions and lower home sales prices in our markets, partially offset by growth in our agent base, compared to 2022.
Revenues decreased in 2023 primarily because of lower volume of real estate brokerage commissions, which is attributable to a decrease of overall real estate transactions and lower home sales prices in our markets, partially offset by growth in our agent base, compared to 2022. Operating (Loss) Profit The operating (loss) profit decreased ($19.5) million in 2024, compared to 2023.
Stock-based compensation Our stock-based compensation is comprised of agent growth incentive programs, agent equity program and stock option awards. The Company accounts for stock-based compensation granted to employees and non-employees using a fair value method.
Stock-based compensation Our stock-based compensation is comprised of AGIP, AEP, stock option awards and restricted stock units. The Company accounts for stock-based compensation granted to employees and non-employees using a fair value method.
The CODM uses Adjusted Segment EBITDA as a key metric to evaluate the operating and financial performance of a segment, identify trends affecting the segments, develop projections and make strategic business decisions and allocate resources. The Company has four reportable segments as follows: North American Realty, International Realty, Virbela and Other Affiliated Services.
The CODM uses Adjusted Segment EBITDA as a key metric to evaluate the operating and financial performance of a segment, identify trends affecting the segments, develop projections and make strategic business decisions and allocate resources.
We remain focused on optimizing our operating costs to match our revenue trends. 27 One critical area of capital deployment is our Sustainable Revenue Share Plan (the “Revenue Share Plan”), whereby we pay real estate professionals affiliated with the Company a portion of eXp Realty’s commission for their contribution to Company growth.
Revenue Share Plan A key component of our capital deployment strategy is our Sustainable Revenue Share Plan (the “Revenue Share Plan”), whereby we pay real estate professionals affiliated with the Company a portion of eXp Realty’s commission for their contribution to Company growth.
At present, our cash and cash equivalents balances and cash flows from operations have remained positive, as we have continued to grow our agent count and focus on operational excellence despite the challenging market conditions of 2023.
At present, our cash and cash equivalents balances and cash flows from operations have remained positive, as we focused on cost savings initiatives and operational excellence despite the challenging market conditions of 2024.
The 2022 MD&A is incorporated by reference herein from Part II, Item 7 of our annual report on Form 10-K filed on February 28, 2023 (Commission File No. 001-38493 ).
The 2023 MD&A is incorporated by reference herein from Part II, Item 7 of our annual report on Form 10-K filed on February 22, 2024 (Commission File No. 001-38493). Our primary sources of liquidity are our cash and cash equivalents on hand and cash flows generated from our business operations.
See additional information in Note 10 –Segment Information to the consolidated financial statements included elsewhere in this Annual Report. eXp manages its operations in four operating business segments: North American Realty; International Realty; Virbela; and Other Affiliated Services.
The Chief Operating Decision Maker (“CODM”) manages the business and allocates resources as three separate operating segments: North American Realty; International Realty; and Other Affiliated Services. See additional information in Note 11 –Segment Information to the consolidated financial statements included elsewhere in this Annual Report.
See “Forward-Looking Statements” and “Item 1A. – Risk Factors” included elsewhere within this Annual Report on Form 10-K for a discussion of certain risks, uncertainties and assumptions associated with these statements. This section generally discusses items pertaining to and comparisons of financial results between 2023 and 2022.
See “Forward-Looking Statements” and “Item 1A. – Risk Factors” included elsewhere within this Annual Report for a discussion of certain risks, uncertainties and assumptions associated with these statements.
Net Working Capital Net working capital is calculated as the Company’s total current assets less its total current liabilities.
We currently do not hold any other marketable securities. Net Working Capital Net working capital is calculated as the Company’s total current assets less its total current liabilities.
International Realty Initiatives We have operations in the U.K., Australia, France, India, Mexico, Portugal, South Africa, Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Panama, Germany, the Dominican Republic, Greece, New Zealand, Chile, Poland and Dubai. The Company continues to pursue growth opportunities and increase market share in the countries where operations began in recent years.
International Realty Initiatives We have operations in the U.K., Australia, France, India, Mexico, Portugal, South Africa, Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Panama, Germany, the Dominican Republic, Greece, New Zealand, Chile, Poland and Dubai. During 2024, the Company announced plans to expand into Türkiye, Peru and Egypt, currently expected to be launched in 2025.
We report corporate expenses, as further detailed below, as “Corporate expenses and other.” All segments follow the same basis of presentation and accounting policies. See Note 2 - Summary of Significant Accounting Policies to the consolidated financial statements included elsewhere in this Annual Report for additional information about the Company’s significant accounting policies.
See Note 2 - Summary of Significant Accounting Policies to the consolidated financial statements included elsewhere in this Annual Report for additional information about the Company’s significant accounting policies.
Outlook As we continue to scale our Company by investing in people, technology and processes, we expect to increase market share, agent base and real estate transaction volume in the U.S. and Canada and selectively grow in the international markets.
Outlook As we continue to scale our Company by investing in people, technology and processes, we believe we are well positioned to grow productive agents and revenues in the U.S., Canada and selectively international markets.
We launched the Revenue Share Plan when the Company was in its infancy as a competitive differentiator that has since disrupted the residential real estate brokerage model. Participants in the Revenue Share Plan are eligible to receive additional income from the Company’s closed real estate transactions based on the participant’s number of frontline qualifying active (“FLQA”) agents.
Participants in the Revenue Share Plan are eligible to receive additional income from the Company’s closed real estate transactions based on the participant’s number of frontline qualifying active (“FLQA”) agents and their downline agents.
These operating ambitions are not forecasts and do not reflect our expectations, but rather are aspirational targets for future performance that may never be realized. These statements involve risks, uncertainties, assumptions and other factors that are difficult to predict and that could cause actual results to vary materially from those expressed in them.
These statements involve risks, uncertainties, assumptions and other factors that are difficult to predict and that could cause actual results to vary materially from those expressed in them.
The economic conditions influencing housing markets primarily include economic growth, interest rates, unemployment, consumer confidence, mortgage availability and supply and demand. In periods of economic growth, rising consumer confidence and lower interest rates, demand typically increases resulting in higher home sales transactions and home sales prices.
In periods of economic growth, rising consumer confidence and lower interest rates, demand typically increases resulting in higher home sales transactions and home sales prices. Conversely, in periods of economic recession, declining consumer confidence and higher interest rates, demand typically decreases, resulting in lower home sales transactions and home sale prices.
The supplementary income distributed to the sponsor under the Revenue Share Plan is exclusively derived from the Company's portion of the transaction commission and is not earned on transactions for which the Company does not receive a commission (e.g., when an FLQA has capped and earns 100% of commission on its closed transactions).
Revenue Share supplemental income is not earned on transactions for which the Company does not receive a commission (e.g., when an FLQA has reached the maximum brokerage contribution threshold (i.e., has “capped”) and earns 100% of commission on its closed transactions). The Revenue Share Plan does not impact or reduce the commission earned by the FLQA on the transaction.
The pending home sales index measures housing contract activity and is based on signed real estate contracts for existing single-family homes and condos. The Company believes that it continues to be well-positioned for growth in the current economic climate. We have a strong base of agent support, which should drive organic market share growth, retention and productivity.
The Company believes that it remains well positioned for growth in the current economic climate. Despite the challenges of the current housing market, we have a strong base of agent support, which should drive organic market share growth, retention and productivity.
While we do not consider acquisitions a critical element of our ongoing business, we seek opportunities to expand and enhance our portfolio of solutions. Strategy Our strategy is to grow organically in the North American and certain international markets by increasing our independent agent and broker network.
While we do not consider acquisitions a critical element of our ongoing business, we seek opportunities to expand and enhance our portfolio of solutions.
In turn, this often leads to enthusiastic fans of eXp who will promote our Company and continue leading us through strong organic growth. The NPS process is an important vehicle for delivering our core values of transparency. While we strive for high satisfaction, it is equally important to investigate a low or unfavorable trending of NPS.
The NPS process is an important vehicle for delivering our core values of transparency. While we strive for high satisfaction, it is equally important to investigate a low or unfavorable trend of NPS.
Strategic partnerships brought new programs and content and expanded our customer offerings and reach. The organization continues to invest in robust sales and marketing initiatives and funnels, with a focus on expanding membership, subscribers, and clients across diverse industries and global sectors.
The organization continues to invest in robust sales and marketing initiatives, with a focus on expanding membership, subscribers, and clients across diverse industries and global sectors. 37 RESULTS OF OPERATIONS Year ended December 31, 2024 vs.
International Realty revenue increased 50% in 2023 compared to 2022 primarily due to increased real estate transactions driven by increased productivity in previously launched markets.
Adjusted Segment EBITDA increased 9% primarily due to an increase in gross profit related to the increase in real estate transactions and increased home selling prices. International Realty revenue increased 63% in 2024 compared to 2023 primarily due to increased real estate transactions driven by increased productivity in previously launched markets.
The costs attributable to these plans are also a significant component of our commission structure and our results of operations. Additional information for our AGIP and AEP programs are more fully disclosed in Note 9 – Stockholders’ Equity to the consolidated financial statements included elsewhere in this Annual Report. 31 RESULTS OF OPERATIONS Year ended December 31, 2023 vs.
While these initiatives contribute significantly to our commission structure and operating results, they are key to building a scalable, collaborative model that drives sustainable growth. Additional information for our AGIP and AEP programs are more fully disclosed in Note 10 – Stockholders’ Equity to the consolidated financial statements included elsewhere in this Annual Report.
For the year ended December 31, 2023, cash used in our investing activities decreased primarily due to a decrease of ($6.7) million in capital expenditures and an increase of $5.4 million invested in unconsolidated subsidiaries in the current year offset by $9.9 million Zoocasa business acquisition in 2022.
For the year ended December 31, 2024, cash used in our investing activities increased 44% compared to the same period in 2023, primarily due to an increase in cash spend of ($6.2) million in acquisitions, and an increase in purchases of property, plant, and equipment, partially offset by a decrease in investments unconsolidated subsidiaries.
S ee Note 13 – Commitments and Contingencies to the consolidated financial statements included elsewhere in this Annual Report for further information related to our litigation. NON-U.S. GAAP FINANCIAL MEASURES To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, we use Adjusted EBITDA, a non-U.S.
GAAP FINANCIAL MEASURES To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, we use Adjusted EBITDA and Adjusted Segment EBITDA, non-U.S. GAAP financial measures, to understand and evaluate our core operating performance.
GAAP financial measure, for each of the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2022 Net (loss) income ​ ​ ($ 8,973) ​ $ 15,424 Total other (income) expense, net ​ ​ (3,026) ​ 820 Income tax (benefit) expense ​ ​ (4,462) ​ (10,836) Depreciation and amortization ​ ​ 10,892 ​ 9,838 Impairment expense ​ ​ 9,203 ​ - Stock compensation expense (1) ​ ​ 43,178 ​ 30,861 Stock option expense ​ ​ 10,736 ​ 14,442 Adjusted EBITDA ​ ​ $ 57,548 ​ $ 60,549 (1) This includes agent growth incentive stock compensation expense and stock compensation expense related to business acquisitions.
GAAP financial measure, for each of the periods presented: ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 ​ 2023 ​ 2022 Net (loss) income from continuing operations ($ 16,788) ​ $ 3,533 ​ $ 23,735 Total other (income) expense, net (3,277) ​ (2,995) ​ 821 Income tax (benefit) expense 1,071 ​ (16) ​ (8,199) Depreciation and amortization 10,289 ​ 10,892 ​ 9,838 Impairment expense 4,930 ​ - ​ - Litigation contingency 34,000 ​ - ​ - Stock compensation expense (1) 37,285 ​ 43,178 ​ 30,861 Stock option expense 7,973 ​ 10,736 ​ 14,442 Adjusted EBITDA $ 75,483 ​ $ 65,328 ​ $ 71,498 (1) This includes agent growth incentive stock compensation expense and stock compensation expense related to business acquisitions. 45 The primary driver for the increase in Adjusted EBITDA was increased revenues, partially offset by increased commissions and other agent-related expenses and slightly higher general and administrative expenses.
MARKET CONDITIONS AND INDUSTRY TRENDS Our business is dependent on the levels of home sales transactions and prices, which can vary based on economic conditions within the markets for which we operate. Changes in these conditions can have a positive or negative impact on our business.
Finally, we have migrated to our proprietary web-based metaverse (Frame VR.io) virtual workspace for both staff and agents with over 2 million visits in 2024. MARKET CONDITIONS AND INDUSTRY TRENDS Our business is dependent on the volume of home sales transactions and prices, which can vary based on economic conditions within the markets for which we operate.
In 2023, our primary emphasis was on achieving operational excellence, which we monitor using agent Net Promoter Score (“aNPS”). aNPS plays a crucial role in attracting and retaining agents and teams, especially during a period marked by market contraction, due to lower transaction volumes and higher mortgage rates.
Agent Net Promoter Score (aNPS) aNPS is a scale-based measure of customer satisfaction and an aNPS above 50 is considered excellent. aNPS plays a crucial role in attracting and retaining agents and teams, especially during a period marked by ongoing market contraction, due to lower transaction volumes and higher mortgage rates, and increased agent attrition from the industry.
One of our key strengths is attracting real estate agent and broker professionals that contribute to our growth. Real estate sales transactions are recorded when our agents and brokers represent buyers and/or sellers in the purchase or sale, respectively, of a home. Other real estate transactions are recorded for leases, rentals and referrals.
Real Estate Sales Transactions and Sales Volume Real estate sales transactions are based on the side (buyer or seller) of each real estate transaction and are recorded when our agents and brokers represent buyers or sellers in the purchase or sale, respectively, of a home. The number of real estate transactions is a key driver of our revenue and profitability.
The following table outlines the key business metrics that we periodically review to track the Company’s performance: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2022 ​ 2021 ​ ​ ​ ​ ​ ​ ​ Performance: ​ ​ ​ ​ ​ ​ Agent count ​ 87,515 ​ 86,203 ​ 71,137 Real estate sales transactions ​ 422,772 ​ 460,150 ​ 407,197 Other real estate transactions ​ 71,636 ​ 51,709 ​ 37,170 Volume ​ $ 169,202,948 ​ $ 187,252,204 ​ $ 156,101,836 Revenue ​ $ 4,281,105 ​ $ 4,598,161 ​ $ 3,771,170 Gross profit ​ 324,051 ​ 366,899 ​ 296,031 Gross margin (%) ​ 7.6% ​ 8.0% ​ 7.8% Adjusted EBITDA (1) ​ $ 57,548 ​ $ 60,549 ​ $ 77,995 ​ (1) Adjusted EBITDA is not a measurement of our financial performance under U.S.
The following table outlines the key business metrics that we periodically review to track the Company’s performance: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ 2022 ​ ​ ​ ​ ​ ​ ​ Performance: ​ ​ ​ ​ ​ ​ Agent NPS ​ 76 ​ 73 ​ 71 Agent count ​ 82,980 ​ 87,515 ​ 86,203 Real estate sales transactions ​ 434,165 ​ 422,772 ​ 460,150 Real estate sales volume ​ $ 185,170,695 ​ $ 169,202,948 ​ $ 187,252,204 Other real estate transactions ​ 84,524 ​ 71,636 ​ 51,709 Real estate per transaction cost ​ $ 559 ​ $ 573 ​ $ 581 Revenues ​ $ 4,567,672 ​ $ 4,273,821 ​ $ 4,589,676 Operating (loss) profit ​ ($ 18,994) ​ $ 522 ​ $ 16,357 Adjusted EBITDA (1) ​ $ 75,483 ​ $ 65,328 ​ $ 71,498 (1) Adjusted EBITDA is not a measurement of our financial performance under U.S.
Agents and brokers can elect to receive 5% of their commission payable in the form of Company common stock at a 10% discount to the market price of our common stock . Our operational strategy and the importance of the AEP and AGIP to our strategy have not changed.
The AEP further strengthens this ownership culture by allowing agents and brokers in participating jurisdictions to elect to receive 5% of their commission in Company common stock at a discounted market price.
The revenue share program is integral to our growth strategy, fostering a collaborative brokerage that aligns with our core values of sustainability and collaborative success. Regular evaluations are conducted to ensure the plan’s continued alignment with the Company's overarching objectives and for regulatory compliance.
The Company’s costs incurred under the Revenue Share Plan are included as commissions and other agent-related costs in the consolidated statements of comprehensive income. The Revenue Share Plan is integral to our growth strategy, fostering a collaborative brokerage that aligns with our core values of sustainability and collaborative success.
During 2023, the Company announced various new agent incentive programs to enhance the agent experience and to attract culturally aligned agents, teams and independent brokerages to the Company. New incentive programs include Boost, Accelerate, and Thrive, which offer unique financial incentives.
During 2024, the Company introduced various agent-focused initiatives and incentive programs designed to enhance agent earning potential and to attract culturally aligned agents, teams and independent brokerages to the Company.
The Company has focused on increasing productivity throughout our international entities. Our operations in the U.K and South Africa, in particular are seeing meaningful agent and transaction growth. During 2023, the eXp Luxury program expanded into Puerto Rico, the United Kingdom, Australia, New Zealand and South Africa.
The Company continues to pursue growth opportunities and increase market share in the countries where operations began in recent years. The Company has focused on increasing productivity throughout our international entities. Our operations in the U.K, South Africa, and France in particular are experiencing meaningful agent and transaction growth.
According to NAR, inventory of existing homes for sale in the U.S. was one million. Mortgage Rates Persistently high mortgage rates continue to negatively impact the demand for homebuying. Based on Freddie Mac data, the average rate for a 30-year, conventional fixed-rate mortgage was 6.61% in December 2023 compared to 6.42% in December 2022.
Based on Freddie Mac data, the average rate for a 30-year, conventional fixed-rate mortgage was 6.85% in December 2024 compared to 6.61% in December 2023. Housing Affordability Index According to preliminary data from NAR, the composite housing affordability index decreased to 99.0 for November 2024 from 100.5 for December 2023.
According to preliminary NAR housing statistics, existing home sales continued to decline to 4.09 million for the year ended December 31, 2023, down 18.7% from 2022. NAR reported that the preliminary pending home sales index increased 1.3% in December 2023 compared to December 2022, and decreased 16.8% for the full-year ended December 31, 2023, compared to the full-year of 2022.
NAR reported that the preliminary pending home sales index decreased 5.0% in December 2024 compared to December 2023 and decreased 2.7% for the full-year ended December 31, 2024, compared to the full-year of 2023. The pending home sales index measures housing contract activity and is based on signed real estate contracts for existing single-family homes and condos.
The following table reflects the results of each of our reportable segments during the years ended December 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ Year Ended ​ Change 2023 vs. 2022 ​ December 31, 2023 ​ December 31, 2022 ​ $ % ​ ​ (In thousands, except share amounts and per share data) Statement of Operations Data: ​ ​ ​ ​ ​ ​ ​ ​ Revenues ​ ​ ​ ​ ​ ​ ​ North American Realty ​ $ 4,220,063 ​ $ 4,552,938 ​ ($ 332,875) ​ (7)% International Realty ​ 53,931 ​ 35,924 ​ 18,007 ​ 50% Virbela ​ 7,284 ​ 8,485 ​ (1,201) ​ (14)% Other Affiliated Services ​ 4,802 ​ 5,084 ​ (282) ​ (6)% Segment eliminations ​ (4,975) ​ (4,270) ​ (705) ​ (17)% Total Consolidated Revenues ​ $ 4,281,105 ​ $ 4,598,161 ​ ($ 317,056) ​ (7)% Adjusted Segment EBITDA (1) ​ ​ ​ ​ ​ ​ ​ ​ North American Realty ​ 91,101 ​ 103,255 ​ ($ 12,154) ​ (12)% International Realty ​ (13,657) ​ (13,708) ​ 51 ​ -% Virbela ​ (5,725) ​ (9,642) ​ 3,917 ​ 41% Other Affiliated Services ​ (3,795) ​ (2,600) ​ (1,195) ​ (46)% Total Segment Adjusted EBITDA ​ 67,924 ​ 77,305 ​ (9,381) ​ (12)% Corporate expenses and other ​ (10,376) ​ (16,756) ​ 6,380 ​ 38% Total Reported Adjusted EBITDA ​ $ 57,548 ​ $ 60,549 ​ ($ 3,001) ​ (5)% (1) Adjusted Segment EBITDA is not a measurement of our financial performance under U.S.
The following table reflects the results of each of our reportable segments during the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ Year Ended ​ Change 2024 vs. 2023 ​ December 31, 2024 ​ December 31, 2023 ​ $ % ​ ​ ​ Statement of Operations Data: ​ ​ ​ ​ ​ ​ ​ ​ Revenues ​ ​ ​ ​ ​ ​ ​ North American Realty ​ $ 4,478,293 ​ $ 4,220,063 ​ $ 258,230 ​ 6% International Realty ​ 88,146 ​ 53,931 ​ 34,215 ​ 63% Other Affiliated Services ​ 6,105 ​ 4,802 ​ 1,303 ​ 27% Segment eliminations ​ (4,872) ​ (4,975) ​ 103 ​ 2% Total Consolidated Revenues ​ $ 4,567,672 ​ $ 4,273,821 ​ $ 293,851 ​ 7% Adjusted Segment EBITDA (1) ​ ​ ​ ​ ​ ​ ​ ​ North American Realty ​ 99,253 ​ 91,101 ​ $ 8,152 ​ 9% International Realty ​ (9,481) ​ (13,657) ​ 4,176 ​ 31% Other Affiliated Services ​ (4,876) ​ (3,795) ​ (1,081) ​ (28)% Total Adjusted Segment EBITDA ​ 84,896 ​ 73,649 ​ 11,247 ​ 15% Corporate expenses and other ​ (9,413) ​ (8,321) ​ (1,092) ​ (13)% Total Reported Adjusted EBITDA (1) ​ $ 75,483 ​ $ 65,328 ​ $ 10,155 ​ 16% (1) Adjusted Segment EBITDA is not a measurement of our financial performance under U.S.
Conversely, in periods of economic recession, declining consumer confidence and higher interest rates, demand typically decreases, resulting in lower home sales transactions and home sale prices. Additionally, regulations imposed by local, state and federal government agencies and geopolitical instability can also negatively impact the housing markets in which we operate.
Additionally, regulations imposed by local, state and federal government agencies and geopolitical instability can also negatively impact the housing markets in which we operate. In 2024, the U.S. residential existing home sales market decreased 0.7% from 2023, according to preliminary data from the National Association of Realtors (“NAR”).
Other (Income) Expense, Net Other (income) expense in 2023 and 2022 includes interest income partially offset by equity in losses of unconsolidated subsidiaries. Income Tax Benefit (Expense) The Company's provision for income taxes amounted to a benefit of ($4.5) million, a benefit decrease of $6.4 million for the year ended December 31, 2023.
Other (income) expense, net includes interest income earned on cash and cash equivalents, and (earnings) losses related to equity investments. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change 2024 vs. 2023 ​ December 31, 2024 ​ December 31, 2023 ​ $ % ​ ​ ​ Income tax (benefit) expense ​ $ 1,071 ​ ($ 16) ​ $ 1,087 ​ (6,794)% The Company’s provision for income tax (benefit) expense from continuing operations decreased $1.1 million from the year ended December 31, 2023.
Additionally, we have an efficient operating model with lower fixed costs driven by our cloud-based model, with no brick-and-mortar locations.
Additionally, our efficient operating model, driven by our cloud-based platform and lack of brick-and-mortar locations, allows us to adapt swiftly to market changes while maintaining lower fixed costs. We are confident in our ability to leverage our low-cost, high-engagement model.
The Company’s presentation of Adjusted Segment EBITDA may not be comparable to similar measures used by other companies. 2023 Compared to 2022 North American Realty revenue decreased (7)% in 2023 compared to 2022 primarily due to a decrease in overall real estate transactions, driven by market conditions, partially offset by growth in our agent base.
The Company’s presentation of Adjusted Segment EBITDA may not be comparable to similar measures used by other companies.

… 116 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed6 unchanged
Biggest changeAs of December 31, 2023, our largest international operations were in Canada. Based on fiscal 2023 performance, a hypothetical appreciation or decline in the value of the Canadian dollar in relation to the U.S. dollar of 10% would have an immaterial impact on operating income.
Biggest changeAs of December 31, 2024, our largest international operations were in Canada. Based on fiscal 2024 performance, a hypothetical appreciation or decline in the value of the Canadian dollar in relation to the U.S. dollar of 10% would have an immaterial impact on operating income.
Our investments in the net assets of our international operations were also subject to currency risk. As of December 31, 2023, the impacts of translations of foreign-denominated net assets of our international operations were immaterial to the Company’s consolidated financial statements. The translation impacts related to the net assets of our international operations are recorded within accumulated other comprehensive income.
Our investments in the net assets of our international operations were also subject to currency risk. As of December 31, 2024, the impacts of translations of foreign-denominated net assets of our international operations were immaterial to the Company’s consolidated financial statements. The translation impacts related to the net assets of our international operations are recorded within accumulated other comprehensive income.
Historically, we have not hedged this exposure, although we may elect to do so in future periods. 39
Historically, we have not hedged this exposure, although we may elect to do so in future periods. 46

Other EXPI 10-K year-over-year comparisons