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What changed in eXp World Holdings, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of eXp World Holdings, Inc.'s 2024 and 2025 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 2025 report.

+370 added−584 removedSource: 10-K (2026-02-24) vs 10-K (2025-02-20)

Top changes in eXp World Holdings, Inc.'s 2025 10-K

370 paragraphs added · 584 removed · 251 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeIn 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.
Biggest changeAs disclosed in Note 13 – Commitments and Contingencies to the consolidated financial statements, the Company is a defendant in certain antitrust class actions in the U.S. and Canada. In December 2024, the Company agreed to a settlement requiring changes to business practices and a payment of $34.0 million, subject to final court approval.
Spring and summer seasons historically reflect greater sales periods and, in turn, higher revenues and operating results in comparison to fall and winter seasons. The Company has historically experienced higher revenue during the second and third quarters of its fiscal year due in part to seasonal industry patterns.
Spring and summer seasons historically reflect greater sales periods and, in turn, higher revenues and operating results in comparison to fall 3 Table of Contents and winter seasons. The Company has historically experienced higher revenue during the second and third quarters of its fiscal year due in part to seasonal industry patterns.
Competition Our real estate brokerage competes with local, regional, national and international residential real estate brokerages with respect to the sale of homes and to attract and retain agents, teams of agents, brokers and consumers — both home sellers and buyers.
Competition The Company’s real estate brokerage business competes with local, regional, national and international residential real estate brokerages with respect to the sale of homes and to attract and retain agents, teams of agents, brokers and consumers — both home sellers and buyers.
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.
The Company has 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.
The Company in turn pays a portion of the commissions earned to the real estate agents and brokers. eXp offers an innovative cloud-based brokerage model, which reduces costs to our agents and brokers.
The Company in turn pays a portion of the commissions earned to its real estate agents and brokers. eXp offers an innovative cloud-based brokerage model, which reduces costs to the Company’s agents and brokers.
North American Realty and International Realty Both the North American Realty segment and the International Realty segment generate revenue primarily by serving as a licensed broker for the purpose of processing residential and commercial real estate transactions, from which we earn commissions.
North American Realty and International Realty Both the North American Realty segment and the International Realty segment generate revenue primarily by serving as a licensed broker for the purpose of processing residential and commercial real estate transactions, from which the Company earns commissions.
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.
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 Securities and Exchange Commission (the “SEC”).
We compete primarily on the basis of our service, culture, collaboration, and utilization of cloud-based systems and technologies that reduce costs, while providing relevant and substantial professional development and opportunities for our agents and brokers to generate more business and participate in the growth of our Company.
The Company competes primarily on the basis of its service, culture, collaboration, and utilization of cloud-based systems and technologies that reduce costs, while providing relevant and substantial professional development and opportunities for its agents and brokers to generate more business and participate in the growth of the Company.
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.
The Company’s operational model and growth strategies necessitate the proprietary technologies used to support its operations now and in the future, as well as requiring the Company to, at times, consider existing and emerging technology companies for acquisition, partnerships and other collaborative relationships.
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.
The Company is 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. The Company believes that it is the only global cloud-based real estate brokerage with massive scale.
Although any assertion of our rights could result in a substantial cost and diversion of management effort, we believe the protection and defense against infringement of our intellectual property rights are essential to our business. Seasonality of Business Seasons and weather traditionally impact the real estate industry in the markets in which we operate.
Although any assertion of the Company’s rights could result in a substantial cost and diversion of management effort, the Company believes the protection and defense against infringement of its intellectual property rights are essential to its business. Seasonality of Business Seasons and weather traditionally impact the real estate industry in the markets in which the Company operates.
Intellectual Property Our cloud-based real estate brokerage is highly dependent on the proprietary technology that we employ and the intellectual property that we create. “eXp Realty” is one of our registered trademarks in the United States, among other registered and nonregistered trademarks.
Intellectual Property The Company’s cloud-based real estate brokerage is highly dependent on the proprietary technology that the Company employs and the intellectual property that the Company creates. “eXp Realty” is one of the Company’s registered trademarks in the United States, among other registered and nonregistered trademarks.
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.
The Company also owns the rights to key domain names used by its domestic and international brokerages: including, for example, https://exprealty.com and https://exprealty.ca.
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.
The Company also utilizes part-time and temporary employees and consultants when necessary; in a limited number of the Company’s foreign markets, the Company relies 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.
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, the Company owns registered trademarks and the rights to domain names which are leveraged in its other business segments and in connection with services that complement its real estate brokerage, such as the “SUCCESS ® ” registered trademark and https://success.com.
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 the Company’s proprietary information, it intends to assert its intellectual property rights against any infringement.
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.
This innovative operational structure coupled with the Company’s distribution model allows the Company to effectively enter new markets with speed and flexibility and without much of the investment and cost associated with establishing a traditional brokerage.
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.
The Company’s employees are not members of any labor union. The Company’s operations are overseen directly by management. Management oversees all responsibilities in the areas of corporate administration, business development and technological research and development. The Company continues to enhance its current management to retain skilled employees with experience relevant to the Company’s business.
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.
Markets and Customers The Company’s clients are primarily residential homeowners and homebuyers served through its network of independent agents and brokers. The North American Realty segment includes operations across all 50 U.S. states and all Canadian provinces and represented 96.9% of total consolidated revenues in 2025.
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.
Prior to the first quarter of 2025, Other Affiliated Services also included FrameVR.io. In 2024, the Company wound down the Virbela business, and its remaining operations no longer met the criteria for a reportable segment; 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.
The model features low entry fees, stock ownership opportunities for agents and brokers and a revenue-sharing plan through which agents and brokers can earn commission from transactions conducted by agents and brokers they have attracted to eXp. Our North American Realty segment also includes lead-generation and other real estate support services in North America and Canada.
The model features low entry fees, stock ownership opportunities for agents and brokers and a revenue-sharing plan through which agents and brokers can earn commission from transactions conducted by agents and brokers they have attracted to eXp. ​ 2 Table of Contents Other Affiliated Services The Company’s Other Affiliated Services segment includes SUCCESS ® magazine and its related media properties, which provide training, classes, resources, and tools to empower our agents, brokers, staff, and general customers to excel and empower their professional development.
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.
By contrast, the Company’s 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.
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.
Software Development The Company continues to increase its investment in the development of its own cloud-based technology and transaction processing platforms and further expand its technological products and service offerings. The Company continues to create process efficiencies and provide its agents and brokers with technologies designed to facilitate transactions in an efficient and consumer-friendly way.
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.
Such reports and information are made available free of charge through our Investor Relations website, www.expworldholdings.com/investors/sec-filings/, as soon as reasonably practicable after we electronically file that material with, or furnish it to, the SEC. The public can obtain any documents that we file with the SEC at www.sec.gov .
Legal and Regulatory Environment All of our businesses, as well as our joint ventures (such as mortgage origination, title underwriting, and ancillary agent support services), operate in highly regulated industries and are subject to changes in government policy, variations in the interpretation and enforcement of laws by regulatory bodies and other government entities, and modifications to existing laws, regulatory frameworks, and guidelines.
Government Regulation Legal and Regulatory Environment The Company operates in highly regulated industries and is subject to changes in laws, regulations, and government policies, as well as their interpretation and enforcement by regulatory bodies and other authorities.
By leveraging technology, expanding educational initiatives, and aligning with global sustainability frameworks, we aim to build a sustainable long-term business model. ​ Human Capital Our employees, including our brokers and our independent contractor real estate agents, represent the human capital investments imperative to our operations.
While the direct impact on our business is limited by our cloud-based model, evolving global requirements and stakeholder demands could increase compliance obligations. Human Capital The Company’s employees, brokers, and independent contractor real estate agents represent the human capital investments imperative to its operations.
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.
As of December 31, 2025, the Company had approximately 1,834 full-time equivalent employees and over 83,000 real estate agents.
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Item 1. BUSINESS General eXp World Holdings, Inc. (“eXp,” or, collectively with its subsidiaries, the “Company,” “we,” “us,” or “our”) owns and oversees a diversified portfolio of service-oriented businesses. These businesses significantly benefit from the integration of our advanced enabling technology platform. Our strategic focus is on expanding our real estate brokerage operations.
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Item 1. BUSINESS General The Company owns and oversees a diversified portfolio of service-oriented businesses. These businesses are integrated through the Company’s advanced enabling technology platform which enables collaboration and operational leverage across its ecosystem.
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To achieve this, we emphasize enhancing the value proposition for our agents, investing in the development of immersive, cloud-based technological solutions, and offering affiliate and media services that bolster these efforts.
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The Company’s strategic focus is the continued expansion of its real estate brokerage operations by delivering a differentiated value proposition to agents—centered on industry-leading economics, ownership opportunities, and access to tools and services that support long-term professional growth.
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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.
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Through disciplined investment in technology, education, and affiliated services, the Company seeks to provide a scalable platform where real estate professionals can grow their businesses and adapt to an evolving real estate marketplace.
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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.
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A core element of the Company’s value proposition is its commitment to cooperation, transparency, and consumer-centric practices, which the Company views as essential to a healthy, open real estate marketplace and a key differentiator in attracting and retaining professional agents.
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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.
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Throughout 2025, the Company also introduced new programs and specialized divisions designed to support agents in growing and expanding their businesses across a range of property types. In the second quarter of 2025, the Company launched its Land and Ranch Division, to support agents specializing in rural, recreational, and agricultural properties.
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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.
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During the fourth quarter of 2025, the Company launched its Sports and Entertainment Division, aimed at supporting agents serving clients in the sports and entertainment sectors.
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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.
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In addition, during the second quarter of 2025, the Company introduced its Co-Sponsor Program, allowing agents to designate both a primary sponsor and a co-sponsor, as well as a U.S. open-sourced Seller Advisory: Risks of Limited Market Exposure form, in line with the Company’s commitment to transparency and education.
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In prior years, the Company’s Virbela and FrameVR.io businesses represented an operating and reporting segment under Accounting Standards Codification (“ASC”) 280.
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The Company also continued to invest in its technology platform and agent-facing tools.
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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.
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In the third quarter of 2025, the Company launched its CRM of Choice initiative, which allows agents to select from three leading customer relationship management platforms based on their individual business needs, and released LYVVE TM , its global property search platform designed to consolidate listings and related data from multiple countries into a single, border-agnostic search interface for agents and consumers.
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Our International Realty segment includes our foreign operations in the United Kingdom (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.
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During 2025, the Company made several key leadership appointments to support its continued growth and operational focus. In the third quarter of 2025, Jesse Hill was appointed Chief Financial Officer of eXp World Holdings, Inc.
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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.
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In the fourth quarter of 2025, Carrie Lysenko was appointed Chief Technology Officer of eXp Realty ®, and Holly Mabery was appointed Chief Brokerage Officer of eXp Realty. Business Segments The Company operates its business through three reportable segments: North American Realty, International Realty, and Other Affiliated Services.
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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.
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North American Realty includes residential and commercial brokerage, lead generation, and related support services in the United States and Canada and, beginning with the first quarter of 2025, FrameVR.io, the Company’s proprietary, web-accessible 3D immersive technology platform that provides a virtual environment for agent collaboration, training, and community engagement.
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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.
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International Realty includes brokerage operations and support services across 27 countries throughout the Americas, Europe, the Middle East, Asia-Pacific, and South Africa. Both segments generate revenue primarily from commissions on residential real estate transactions, supported by the Company’s cloud-based brokerage model. Other Affiliated Services includes SUCCESS ® magazine and related media properties.
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These customers are sellers or purchasers of new or existing homes and engage us to aid in the facilitation of the closing of the real estate transaction, including, but not limited to, searching, listing, application processing and other pre- and post-close support.
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As a result, all prior period segment disclosures have been reclassified to conform to the current reporting structure.
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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.
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The International Realty segment includes operations in 27 countries throughout the Americas, Europe, the Middle East, Asia-Pacific, and South Africa and represented 3.1% of total consolidated revenues in 2025. Other Affiliated Services includes SUCCESS® media properties, which provide affiliated services and professional development tools that support its agents, brokers, and customers.
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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.
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The Company also believes its compensation and incentive programs to attract and retain highly productive agents are some of the most compelling in the industry. As such, the Company believes that it is well positioned in the competitive landscape.
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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.
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Residential Real Estate The Company operates in the residential real estate industry, which is subject to extensive federal, state, local, and international regulation, as well as oversight by industry associations. Our participation in multiple listing services and industry organizations also exposes us to evolving rules and policies that may be influenced by regulatory developments, litigation, or government action.
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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.
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The industry is also subject to scrutiny in areas such as antitrust, competition, settlement procedures, consumer protection, and worker classification. RESPA The Real Estate Settlement Procedures Act (“RESPA”) and similar laws govern payments and referrals in connection with residential real estate transactions, including mortgages, title, and insurance.
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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.
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Compliance can be complex due to differing interpretations by courts and regulators, and violations may result in loss of brokerage licensure, significant fines, legal costs, and private litigation. State laws restricting inducements and gifts to consumers also affect our lead-generation efforts.
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For additional information with respect to related risks facing our business, see Item “1A. – Risk Factors” included elsewhere within this Annual Report.
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Antitrust The Company is subject to U.S. and international antitrust and competition laws, including the Sherman Act, the Federal Trade Commission Act, the Clayton Act, and comparable statutes in other jurisdictions. These laws prohibit anti-competitive conduct such as price-fixing and apply broadly to our industry. Regulatory scrutiny of broker compensation and MLS practices has intensified in recent years.
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Residential Real Estate We primarily serve the residential real estate industry, which is regulated by federal, international, state, provincial and local laws and authorities as well as private associations or state-sponsored associations or organizations.
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In March 2024, the NAR reached a settlement requiring significant changes to its policies, including increased transparency in agent compensation and MLS rules, which have impacted industry practices. The long-term effects of these changes remain uncertain but could increase costs or alter competitive dynamics.
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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.
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These proceedings, and related settlements across the industry, may continue to require changes to our or our brokers’ business models, including compensation practices. Worker Classification Most of the Company’s real estate professionals are retained as independent contractors, except where local laws require otherwise.
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We are a participant in multiple listing services (“MLSs”) through our subsidiary entities, employees, and affiliated real estate professionals. Many of our affiliated real estate professionals are members of the National Association of Realtors (“NAR”) and state Realtor associations.
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Their classification is subject to rules of the Internal Revenue Service (“IRS”), foreign regulations, and applicable state and provincial laws, all of which are subject to interpretation and change. The Company monitors ongoing federal, state, and international developments in this area.
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The regulations, rules and policies of these organizations are subject to change, which changes can be influenced by regulatory developments, litigation, and other actions. From time to time, certain industry practices come under federal or state scrutiny or are the subject of litigation.
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Cybersecurity and Data Privacy Regulations The Company is subject to domestic and international laws governing data privacy and cybersecurity, including U.S. statutes such as the Gramm-Leach-Bliley Act and the California Consumer Privacy Act, and international frameworks such as the European Union’s General Data Protection Regulation. These laws impose obligations related to safeguarding personal data and carry significant penalties for non-compliance.
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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.
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Global data privacy requirements continue to evolve, and we monitor developments across jurisdictions. For additional discussion of related risks, see Item “1A - Risk Factors” in this Annual Report. TCPA The Telephone Consumer Protection Act (“TCPA”) regulates telemarketing practices, including restrictions on autodialing, prerecorded messages, and communications to numbers on national or state Do-Not-Call registries.
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RESPA RESPA, along with various state and international real estate laws, governs the payments and referrals associated with residential sales and settlement services, such as mortgages, title insurance, and home insurance.
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The TCPA requires written consent for certain mobile communications, and some states have adopted or may adopt their own versions of these rules.
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These laws may impose limitations on arrangements involving our real estate brokerage, affiliated real estate professionals, lead generation efforts, and the businesses of our joint ventures, in addition to mandating timely disclosure about such relationships.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

149 edited+50 added−93 removed24 unchanged
Biggest changeOur effective tax rate could increase due to several factors, including: changes in the relative amounts of income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates; changes in tax laws, tax treaties, and regulations or the interpretation of them, including the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) which requires research and experimental expenditures attributable to research conducted in the United States to be capitalized as of January 1, 2022 and amortized over a five-year period or expenditures attributable to research conducted outside the United States to be amortized over a fifteen-year period; the Inflation Reduction Act of 2022 which imposes a one-percent non-deductible excise tax on repurchases of stock that are made by U.S publicly traded corporation after December 31, 2022; changes to our assessment about our ability to realize our deferred tax assets that are based on estimates of our future results, the prudence and feasibility of possible tax planning strategies, and the economic and political environments in which we do business; the outcome of current and future tax audits, examinations or administrative appeals; and limitations or adverse findings regarding our ability to do business in some jurisdictions.
Biggest changeThe Company’s effective tax rate could increase due to several factors, including: changes in the relative amounts of income before taxes in the various jurisdictions in which the Company operates that have differing statutory tax rates; changes to the Company’s assessment about its ability to realize the Company’s deferred tax assets that are based on estimates of its future results, the prudence and feasibility of possible tax planning strategies, and the economic and political environments in which the Company does business; the outcome of current and future tax audits, examinations or administrative appeals; and limitations or adverse findings regarding the Company’s ability to do business in some jurisdictions. 9 Table of Contents In particular, new income, sales and use or other tax laws or regulations could be enacted at any time, which could adversely affect the Company’s business operations and financial performance.
Among other things, these provisions: ● do not permit cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates; ● delegate the sole power to a majority of the Board of Directors to fix the number of directors; ● provide the power to our Board of Directors to fill any vacancy on our Board of Directors, whether such vacancy occurs as a result of an increase in the number of directors or otherwise; ● eliminate the ability of stockholders to call special meetings of stockholders; and ● establish advance notice requirements for nominations for election to our Board of Directors or for proposing matters that can be acted on by stockholders at stockholder meetings.
Among other things, these provisions: ● do not permit cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates; ● delegate the sole power to a majority of the Board of Directors to fix the number of directors; ● provide the power to the Board to fill any vacancy on the Board, whether such vacancy occurs as a result of an increase in the number of directors or otherwise; ● eliminate the ability of stockholders to call special meetings of stockholders; and ● establish advance notice requirements for nominations for election to the Board or for proposing matters that can be acted on by stockholders at stockholder meetings.
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.
Further, the Company 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.
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.
Expanding the Company’s 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 the Company’s cloud-based operating model; however, attempts to pursue new business opportunities could result in a disproportionate increase in the Company’s expenses and in reduced profit margins.
These and other shifts in the model for agent and broker compensation could significantly change the brokerage landscape overall and may adversely affect our financial condition and results of operations. ​ In addition to the NAR Class Action and various similar private actions already pending, beginning in 2018, the DOJ began investigating NAR for violations of the federal antitrust laws.
These and other shifts in the model for agent and broker compensation could significantly change the brokerage landscape overall and may adversely affect the Company’s financial condition and results of operations. ​ In addition to the NAR Class Action and various similar private actions already pending, beginning in 2018, the DOJ began investigating NAR for violations of the federal antitrust laws.
For example, the Company competes with other brokerages that may have reduced operating margins and access to capital resources permitting them to prioritize market share over profits, as well as the growing popularity of non-traditional platforms such as listing aggregators, which may put additional pressure on our commissions and related costs.
For example, the Company competes with other brokerages that may have reduced operating margins and access to capital resources permitting them to prioritize market share over profits, as well as the growing popularity of non-traditional platforms such as listing aggregators, which may put additional pressure on the Company’s commissions and related costs.
You should carefully consider the risk factors described below, together with all of the other information in this Annual Report, including our consolidated financial statements and notes thereto and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this Annual Report. Certain statements in this Annual Report are forward-looking statements.
You should carefully consider the risk factors described below, together with all of the other information in this Annual Report, including the Company’s consolidated financial statements and notes thereto and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this Annual Report. Certain statements in this Annual Report are forward-looking statements.
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.
A violation of any of these applicable laws could have a material adverse effect on the Company’s business. Maintaining legal compliance is challenging and increases the Company’s 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.
Adverse results in such litigation and other proceedings may harm our business and financial condition. Class action lawsuits can often be particularly burdensome given the breadth of claims, large potential damages and significant costs of defense.
Adverse results in such litigation and other proceedings may harm the Company’s business and financial condition. Class action lawsuits can often be particularly burdensome given the breadth of claims, large potential damages and significant costs of defense.
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.
Home sales in successive quarters can fluctuate significantly due to a wide variety of factors, including, but not limited to, holidays, national or international emergencies, the school year calendar’s impact on timing of family relocations, interest rate changes or speculation of pending interest rate changes, natural disasters, including hurricanes, flooding and wildfires, and the overall macroeconomic market.
The average broker commission rate for a real estate transaction is a key determinant of our profitability and a material decrease in brokerage commission rates could have a material adverse effect on our business and profitability.
The average broker commission rate for a real estate transaction is a key determinant of the Company’s profitability, and a material decrease in brokerage commission rates could have a material adverse effect on the Company’s business and profitability.
Item 1A. RISK FACTORS In addition to the other information set forth in this report, you should carefully consider the following factors, which could materially affect our business, financial condition or results of operations in future periods. The risks described below are not the only risks facing our Company.
Item 1A. RISK FACTORS In addition to the other information set forth in this Annual Report, you should carefully consider the following factors, which could materially affect the Company’s business, financial condition or results of operations in future periods. The risks described below are not the only risks facing the Company.
Any significant violations of privacy, including as a result of cybersecurity breaches, could result in the loss of new or existing business, litigation, regulatory investigations, the payment of fines, damages and penalties and damage to our reputation, which could have a material adverse effect on our business, financial condition and results of operations.
Any significant violations of privacy, including as a result of cybersecurity breaches, could result in the loss of new or existing business, litigation, regulatory investigations, the payment of fines, damages and penalties and damage to the Company’s reputation, which could have a material adverse effect on its business, financial condition and results of operations.
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.
In addition, the Company 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. The Company may also be subject to legal claims, government investigations and additional state and federal statutory requirements.
We may not become aware of all the laws, rules and regulations that govern our business, or be able to comply with all of them, given the rate of regulatory changes, ambiguities in regulations, contradictions in regulations between jurisdictions and the difficulties in achieving both company-wide and region-specific knowledge and compliance.
The Company may not become aware of all the laws, rules and regulations that govern its business, or be able to comply with all of them, given the rate of regulatory changes, ambiguities in regulations, contradictions in regulations between jurisdictions and the difficulties in achieving both company-wide and region-specific knowledge and compliance.
The National Association of Realtors et. al., Case No. 1:23-cv-05392- SEG (United States District Court for the Northern District of Georgia, Atlanta Division), which was filed on November 22, 2023 against the Company and other US brokerage defendants (the “Hooper Action”).
The National Association of Realtors et. al., Case No. 1:23-cv-05392- SEG (United States District Court for the Northern District of Georgia, Atlanta Division), which was filed on November 22, 2023 against the Company and other U.S. brokerage defendants (the “Hooper Action”).
Similar rules may apply under state tax laws. It is possible that an ownership change, or any future ownership change, could have a material effect on the use of our net operating loss carryforwards or other tax attributes, which could adversely affect our profitability.
Similar rules may apply under state tax laws. It is possible that an ownership change, or any future ownership change, could have a material effect on the use of the Company’s net operating loss carryforwards or other tax attributes, which could adversely affect its profitability.
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.
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 its real estate brokers and agents when those matters relate to business practices shared by the Company, its real estate brokers and agents, or its industry at large.
Regulators in the U.S. and abroad continue to enact comprehensive new laws or legislative reforms imposing significant privacy and cybersecurity restrictions. The result is that we are subject to increased regulatory scrutiny, additional contractual requirements from corporate customers and heightened compliance costs.
Regulators in the U.S. and abroad continue to enact comprehensive new laws or legislative reforms imposing significant privacy and cybersecurity restrictions. The result is that the Company is subject to increased regulatory scrutiny, additional contractual requirements from corporate customers and heightened compliance costs.
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 the Company’s privacy practices could result in regulatory investigations, especially in the European Union as related to the GDPR.
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.
Cybersecurity threats and incidents directed at the Company 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.
In addition, our efforts to develop new products and services could distract management from current operations and could divert capital and other resources from our existing business, including our brokerage business. Failure to achieve the expected benefits of our investments may occur and could harm our business.
In addition, the Company’s efforts to develop new products and services could distract management from current operations and could divert capital and other resources from the Company’s existing business, including its brokerage business. Failure to achieve the expected benefits of the Company’s investments may occur and could harm its business.
Recent regulatory scrutiny regarding the classification of real estate agents as independent contractors, particularly at the state level, could lead to increased compliance costs, potential reclassification, or penalties, which could materially impact our company-owned brokerage operations.
Recent regulatory scrutiny regarding the classification of real estate agents as independent contractors, particularly at the state level, could lead to increased compliance costs, potential reclassification, or penalties, which could materially impact the Company’s owned brokerage operations.
Our legal liability could include significant defense costs, settlement costs, damages and penalties, plus, damage to our reputation with consumers, which could significantly damage our ability to attract customers. Any or all of these consequences would result in a meaningful unfavorable impact on our brand, business model, revenue, expenses, income and margins.
The Company’s legal liability could include significant defense costs, settlement costs, damages and penalties, plus damage to the Company’s reputation with consumers, which could significantly damage its ability to attract customers. Any or all of these consequences would result in a meaningful unfavorable impact on the Company’s brand, business model, revenue, expenses, income and margins.
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.
For example, the Company may allocate resources to acquiring lower margin brokerage models and has 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.
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.
The risks involved in the Company’s international operations and relationships that could result in losses against which it is not insured and, therefore, affect the Company’s 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; ● exposure to political, economic, legal, regulatory and social conditions, or instability, and economic and political tensions between governments; ● employment laws that are significantly different than U.S. employment laws; ● diminished ability to legally enforce the Company’s contractual rights and use of the Company’s 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; 10 Table of Contents ● compliance with the U.S.
Additionally, if plaintiffs or regulatory bodies are successful in such actions, this may increase the likelihood that similar claims are made against the Company and/or our real estate brokers and agents which claims could result in significant liability and be adverse to our financial results if we or our brokers and agents are unable to distinguish or defend our business practices.
Additionally, if plaintiffs or regulatory bodies are successful in such actions, this may increase the likelihood that similar claims are made against the Company and/or its real estate brokers and agents which claims could result in significant liability and be adverse to its financial results if the Company or its brokers and agents are unable to distinguish or defend their business practices.
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.
Except for the Company’s employed state brokers, commission-only employees, and where otherwise dictated by local law, all real estate agent professionals in the Company’s 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.
These ongoing changes to privacy and cybersecurity laws also may make it more difficult for us to operate our business and may have a material adverse effect on our operations. For example, the European Union’s GDPR conferred new and significant privacy rights on individuals (including employees and independent agents) and materially increased penalties for violations.
These ongoing changes to privacy and cybersecurity laws also may make it more difficult for the Company to operate its business and may have a material adverse effect on its operations. For example, the European Union’s GDPR conferred new and significant privacy rights on individuals (including employees and independent agents) and materially increased penalties for violations.
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.
Such litigation and other proceedings may include, but are not limited to, the currently pending antitrust and derivative litigation as disclosed in Note 13 – Commitments and Contingencies to the consolidated financial statements included elsewhere within this Annual Report.
The occurrence of a significant claim in excess of our insurance coverage or which is not covered by our insurance in any given period could have a material adverse effect on our financial condition and results of operations during the period.
The occurrence of a significant claim in excess of the Company’s insurance coverage or which is not covered by its insurance in any given period could have a material adverse effect on the Company’s financial condition and results of operations during the period.
As a result of these risks, we could experience increased legal claims, reputational damage, financial loss or other adverse effects, which could be material. We can provide no assurance that we will be able to efficiently or effectively develop, commercialize and achieve market acceptance of new products and services.
As a result of these risks, the Company could experience increased legal claims, reputational damage, financial loss or other adverse effects, which could be material. The Company can provide no assurance that it will be able to efficiently or effectively develop, commercialize and achieve market acceptance of new products and services.
With respect to these independent contractors, like most brokerage firms, we are subject to the taxing authorities’ regulations and applicable laws regarding independent contractor classification. These regulations and guidelines are subject to judicial and agency interpretation, and it might be determined that the independent contractor classification is inapplicable to any of our affiliated real estate professionals.
With respect to these independent contractors, like most brokerage firms, the Company is subject to the taxing authorities’ regulations and applicable laws regarding independent contractor classification. These regulations and guidelines are subject to judicial and agency interpretation, and it might be determined that the independent contractor classification is inapplicable to any of the Company’s affiliated real estate professionals.
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.
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 the Company’s compensation and benefits structure for its affiliated real estate professionals in some or all of its markets, including by paying additional compensation or reimbursing expenses.
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.
Factors that can contribute to a material decrease in brokerage commissions include changes in 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 models, 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, as well as other competitive factors.
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.
Although the Company employs 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 (the Company’s own or that of third parties, including potentially sensitive personal information of the Company’s clients, agents, and customers) and the disruption of business operations.
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.
The Company’s systems and operations are vulnerable to security breaches, interruption or malfunction due to events beyond its 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.
Changes to federal, state, local, or international tax laws on income, sales, use, indirect, or other tax laws, statutes, rules or regulations may adversely affect our effective tax rate, operating results or cash flows.
Changes to federal, state, local, or international tax laws on income, sales, use, indirect, or other tax laws, statutes, rules or regulations may adversely affect the Company’s effective tax rate, operating results or cash flows.
In addition, we may be required to enter into licensing agreements (if available on acceptable terms) and be required to pay royalties. In the case of securities litigation and proceedings, adverse outcomes could include the cancellation, invalidation, or modification of our existing equity incentive program.
In addition, the Company may be required to enter into licensing agreements (if available on acceptable terms) and be required to pay royalties. In the case of securities litigation and proceedings, adverse outcomes could include the cancellation, invalidation, or modification of the Company’s existing equity incentive program.
From time to time, we may become involved in lawsuits and legal proceedings which arise in the ordinary course of business.
From time to time, the Company may become involved in lawsuits and legal proceedings which arise in the ordinary course of business.
Also, the results of any such litigation or investigation cannot be predicted with certainty, and any negative outcome could result in payments of substantial monetary damages or fines, and/or undesirable changes to our operations or business practices, and accordingly, our business, financial condition, or results of operations could be materially and adversely affected. ​ On March 15, 2024, NAR entered a settlement agreement to resolve on a class wide basis the claims against NAR in the NAR Class Action.
Also, the results of any such litigation or investigation cannot be predicted with certainty, and any negative outcome could result in payments of substantial monetary damages or fines, and/or undesirable 11 Table of Contents changes to the Company’s operations or business practices, and accordingly, its business, financial condition, or results of operations could be materially and adversely affected. ​ On March 15, 2024, NAR entered a settlement agreement to resolve on a class wide basis the claims against NAR in the NAR Class Action.
The Company ceased issuing shares under the 2015 Equity Incentive Plan when it began issuing shares under the 2024 Equity Incentive Plan in September 2024. Our Board of Directors has the authority to cause us to issue additional shares of common stock without consent of any of our stockholders, subject to applicable Nasdaq listing rules.
The Company ceased issuing shares under the 2015 Equity Incentive Plan when it began issuing shares under the 2024 Equity Incentive Plan in September 2024. The Board has the authority to cause the Company to issue additional shares of common stock without consent of any of its stockholders, subject to applicable Nasdaq listing rules.
Our agent compensation plans represent a key lever in our strategy to attract and retain independent agents and brokers and are subject to various international, federal, state, territorial and local laws, rules and regulations which differ in each of our existing and future markets.
The Company’s agent compensation plans represent a key lever in its strategy to attract and retain independent agents and brokers and are subject to various international, federal, state, territorial and local laws, rules and regulations which differ in each of the Company’s existing and future markets.
The potential consequences of a material cybersecurity incident include regulatory violations of applicable U.S. and foreign privacy and other laws, reputational damage, loss of market value, litigation with third parties (which could result in our exposure to material civil or criminal liability), diminution in the value of the services we provide to our customers, and increased cybersecurity protection and remediation costs (that may include liability for stolen assets or information), which in turn could have a material adverse effect on our competitiveness and results of operations.
The potential consequences of a material cybersecurity incident include regulatory violations of applicable U.S. and foreign privacy and other laws, reputational damage, loss of market value, litigation with third parties (which could result in the Company’s exposure to material civil or criminal liability), diminution in the value of the services the Company provides to its customers, and increased cybersecurity protection and remediation costs (that may include liability for stolen assets or information), which in turn could have a material adverse effect on the Company’s competitiveness and results of operations.
Negligent or i mproper activities involving our agents and brokers may result in reputational damage to us and may lead to direct claims against us based on theories of vicarious liability, negligence, joint operations and joint employer liability which, if determined adversely, could increase costs and subject us to incremental liability for their actions.
Negligent or i mproper activities involving the Company’s agents and brokers may result in reputational damage to the Company and may lead to direct claims against the Company based on theories of vicarious liability, negligence, joint operations and joint employer liability which, if determined adversely, could increase costs and subject the Company to incremental liability for their actions.
Changes in corporate tax rates, the realization of net operating losses, and other deferred tax assets relating to our operations, the taxation of foreign earnings, and the deductibility of expenses under the Tax Act or future reform legislation could have a material impact on the value of our deferred tax assets and could increase our future U.S. tax expense.
Changes in corporate tax rates, the realization of net operating losses, and other deferred tax assets relating to the Company’s operations, the taxation of foreign earnings, and the deductibility of expenses under the OBBBA or future reform legislation could have a material impact on the value of the Company’s deferred tax assets and could increase its future U.S. tax expense.
The performance and reliability of our systems and operations are critical to our reputation and ability to attract agents, teams of agents and brokers into our company as well as our ability to service homebuyers and sellers.
The performance and reliability of the Company’s systems and operations are critical to its reputation and ability to attract agents, teams of agents and brokers into the Company as well as its ability to service homebuyers and sellers.
The foregoing factors could impede a merger, takeover or other business combination or discourage a potential investor from making a tender offer for our common stock which, under certain circumstances, could reduce the market value of our common stock and our investors’ ability to realize any potential change-in-control premium. Item 1B. UNRESOLVED STAFF COMMENTS Not applicable.
The foregoing factors could impede a merger, takeover or other business combination or discourage a potential investor from making a tender offer for the Company’s common stock which, under certain circumstances, could reduce the market value of the Company’s common stock and its investors’ ability to realize any potential change-in-control premium. Item 1B. UNRESOLVED STAFF COMMENTS None.
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.
Any such events could also damage the Company’s reputation and impair its ability to attract and service homebuyers, home sellers, agents, clients and customers as well as its ability to attract brokerages, brokers, teams of agents and agents to the Company, without increasing costs.
We operate in a heavily regulated industry subject to complex, federal, state, provincial and local laws and regulations within the markets in which we operate and third-party organizations’ regulations, policies and bylaws governing the real estate business.
The Company operates in a heavily regulated industry subject to complex, federal, state, provincial and local laws and regulations within the markets in which the Company operates and third-party organizations’ regulations, policies and bylaws governing the real estate business.
Any action against us in the future by the FTC or another regulator could materially and adversely affect our operations. We cannot predict the nature of any future law, regulation, or guidance, nor can we predict what effect additional governmental regulations, judicial decisions, or administrative orders, when and if promulgated, would have on our business.
Any action against the Company in the future by the FTC or another regulator could materially and adversely affect the Company’s operations. The Company cannot predict the nature of any future law, regulation, or guidance, nor can it predict what effect additional governmental regulations, judicial decisions, or administrative orders, when and if promulgated, would have on the Company’s business.
Moreover, the financial success of these ventures is uncertain given their limited operating histories, making it difficult to predict their long-term contribution to our overall financial performance. While we aim to mitigate these risks through robust compliance frameworks and strategic partnerships, no mitigation effort can fully eliminate all risk.
Moreover, the financial success of these ventures is uncertain given their limited operating histories, making it difficult to predict their long-term contribution to the Company’s overall financial performance. While the Company aims to mitigate these risks through robust compliance frameworks and strategic partnerships, no mitigation effort can fully eliminate all risk.
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.
Future guidance from the IRS and other tax authorities with respect to the OBBBA may affect us, and certain aspects of the OBBBA could be repealed or modified in future legislation. In addition, it is uncertain if, and to what extent, various states will conform to the OBBBA or any newly enacted federal tax legislation.
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.
For example, the Company has 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 the Company’s processes and systems, which are under increased regulatory scrutiny.
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.
In general, the laws, rules and regulations that apply to the Company’s business practices include, without limitation, RESPA, the federal Fair Housing Act of 1968, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (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 the Company’s business practices relating to the provision of services other than real estate brokerage services, including without limitation, its mortgage lending services; privacy regulations relating to the Company’s use of personal information collected from the registered users of its 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 addition, expansion into new markets and business lines, including internationally, could expose us to additional compliance obligations and regulatory risks.
In addition, expansion into new markets and business lines, including internationally, could expose the Company to additional compliance obligations and regulatory risks.
Past performance in similar seasons or during similar weather events can provide no assurance of future or current performance and macroeconomic shifts in the markets we serve can conceal the impact of poor weather or seasonality.
Past performance in similar seasons or during similar weather events can provide no assurance of future or current performance and macroeconomic shifts in the markets the Company serves can conceal the impact of poor weather or seasonality.
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.
The Company’s competitors may have access to greater financial resources than us, allowing them to undertake expensive local advertising or marketing efforts. In addition, the Company’s competitors may be able to leverage local relationships, referral sources and strong local brand and name recognition that the Company has not established.
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, provisions of the Company’s restated certificate of incorporation and restated bylaws may make it more difficult for, or prevent a third party from, acquiring control of the Company without the approval of its Board of Directors.
We could also be adversely affected if legislation or regulations are expanded to require changes in our business practices or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our business, results of operations or financial condition.
The Company could also be adversely affected if legislation or regulations are expanded to require changes in the Company’s business practices or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect its business, results of operations or financial condition.
To capture and retain market share in the various local markets that we serve, we must compete successfully against other brokerages for agents and brokers and for the consumer relationships that they bring. Our competitors could lower the fees that they charge to agents and brokers or could raise the compensation structure for those agents.
To capture and retain market share in the various local markets that the Company serves, it must compete successfully against other brokerages for agents and brokers and for the consumer relationships that they bring. The Company’s competitors could lower the fees that they charge to agents and brokers or could raise the compensation structure for those agents.
The NAR settlement received preliminary court approval on April 23, 2024. ​ These revised NAR rules and practices have caused and may require additional changes to our business model, including changes to agent and broker compensation and how we meet home buyers. Without mandated commission sharing, for example, we may see the introduction of hourly or a la carte services.
The NAR settlement received preliminary court approval on April 23, 2024. ​ These revised NAR rules and practices have caused and may require additional changes to the Company’s business model, including changes to agent and broker compensation and how they meet home buyers. For example, the Company may see the introduction of hourly or a la carte services.
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.
The Company is subject to risk of and are from time to time involved in, or may in the future be subject to or involved in, claims, suits, government investigations and proceedings arising from the Company’s 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 the Company’s agents and brokers as independent contractors and compliance with wage and hour regulations, and claims alleging violations of Real Estate Settlement Procedures Act (“RESPA”) (and similar state statutes) compliance or state consumer fraud statutes and commercial arrangements.
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.
Any such compromises to the Company’s security could cause harm to its reputation, which could cause clients, agents and customers to lose trust and confidence in the Company or could cause agents and brokers to unaffiliate with us.
At the same time, we are subject to numerous laws, regulations and other requirements that require businesses like ours to protect the security of personal information, notify customers and other individuals about our privacy practices and limit the use, disclosure, or transfer of personal data across country borders.
At the same time, the Company is subject to numerous laws, regulations and other requirements that require businesses like the Company’s to protect the security of personal information, notify customers and other individuals about its privacy practices and limit the use, disclosure, or transfer of personal data across country borders.
Sanford significantly influences the management of our business and affairs. This concentration of ownership and influence could have the effect of delaying, deferring, or preventing a change in control, or impeding a merger or consolidation, takeover or other business combination that could be favorable to our other stockholders.
This concentration of ownership and influence could have the effect of delaying, deferring, or preventing a change in control, or impeding a merger or consolidation, takeover or other business combination that could be favorable to the Company’s other stockholders.
Negligence or willful misconduct of independent real estate professionals affiliated with our Company owned brokerages could materially and adversely affect our reputation and subject us to liability. Our Company-owned brokerage operations rely on the performance of independent real estate professionals.
Negligence or willful misconduct of independent real estate professionals affiliated with the Company owned brokerages could materially and adversely affect the Company’s reputation and subject it to liability. The Company’s operations rely on the performance of real estate brokers and agents.
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.
In addition, the Company relies on third-party vendors to provide key components of the Company’s cloud office platform and to provide additional systems and related support. If the Company cannot continue to retain these services on acceptable terms, its access to these systems and services could be interrupted.
We are a Delaware corporation, and the anti-takeover provisions of Delaware law impose various impediments to the ability of a third party to acquire control of us, even if a change of control would be beneficial to our existing stockholders.
The Company is a Delaware corporation, and the anti-takeover provisions of Delaware law impose various impediments to the ability of a third party to acquire control of the Company, even if a change of control would be beneficial to its existing stockholders.
We may be required to change our platforms and services due to new laws and/or decisions related to emerging technologies which may decrease our operational efficiency and/or hinder our ability to improve our services.
The Company may be required to change its platforms and services due to new laws and/or decisions related to emerging technologies which may decrease the Company’s operational efficiency and/or hinder its ability to improve its services.
The amended rules and regulations also require us to get a buyer agreement signed before we take a home buyer on a first tour. This requirement may dissuade buyers from hiring the Company, thereby reducing the fees we receive from our agents.
The amended rules and regulations also require the Company and its agents to get a buyer agreement signed before taking a home buyer on a first tour. This requirement may dissuade buyers from hiring the Company, thereby reducing the fees the Company receives from its agents.
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.
In addition, while the Company discloses information collection and dissemination practices in the published privacy statements on its various websites, which it may modify from time to time, the Company may be subject to legal claims, government action and damage to its reputation if it acts or is perceived to be acting inconsistently with the terms of the Company’s privacy statement, customer expectations or state, national and international regulations.
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.
The Company’s policies and safeguards could be deemed insufficient if third parties with whom the Company has shared personal information fail to protect the privacy of that information.
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.
In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, the Company’s ability to utilize net operating loss carryforwards or other tax attributes, in any taxable year, may be limited if the Company experiences 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 the Company’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period.
Such matters may include, without limitation, RESPA, TCPA and state consumer protection law, antitrust and anticompetition, and worker classification claims.
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.
As we expand our business in international markets, including new and existing international markets, we are subject to additional foreign governmental regulation. Ensuring compliance with these newly applicable laws could substantially increase our operating expenses. In addition, entry into these new markets exposes us to increased risk and liability.
As the Company expands its business in international markets, including new and existing international markets, the Company is subject to additional foreign governmental regulation. Ensuring compliance with these newly applicable laws could substantially increase its operating expenses. In addition, entry into these new markets exposes the Company to increased risk and liability.
We could be subject to changes in tax laws and regulations that may have a material adverse effect in our business. We operate and are subject to taxes in the United States and numerous other jurisdictions throughout the world.
The Company could be subject to changes in tax laws and regulations that may have a material adverse effect in its business. The Company operates and is subject to taxes in the United States and numerous other jurisdictions throughout the world.
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.
In the event the Company or the vendors with which it contracts to provide services on behalf of its customers were to suffer a breach of personal information, its customers and independent agents could terminate their business with the Company.
Entering into new business arrangements, joint ventures, or business lines may expose us to additional regulatory and compliance risks that could materially and adversely affect our business and financial condition. Our strategy includes pursuing new business initiatives, entering into joint ventures, and expanding into complementary business lines.
Entering into new business arrangements, joint ventures, or business lines may expose the Company to additional regulatory and compliance risks that could materially and adversely affect the Company’s business and financial condition. 16 Table of Contents The Company’s strategy includes pursuing new business initiatives, entering into joint ventures, and expanding into complementary business lines.
We are actively and intend in the future to continue, investing resources in developing new technology, services, products and other offerings complementary to our brokerage business. New business initiatives are inherently risky and may involve unproven business strategies and markets with which we have limited or no prior development or operating experience.
The Company is actively investing and intends to continue to invest resources in developing new technology, services, products and other offerings complementary to the Company’s brokerage business. New business initiatives are inherently risky and may involve unproven business strategies and markets with which the Company has limited or no prior development or operating experience.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRisk of Cybersecurity Threats To date, the Company has not identified a cybersecurity threat in any reporting segment, including as a result of any previous cybersecurity incidents, that has or is reasonably likely to have a current or future material effect on our business strategy, financial condition, results of operations, liquidity, capital expenditures, or capital resources.
Biggest changeTo date, the Company has not identified any cybersecurity threats or incidents that have had, or are reasonably likely to have, a material effect on the Company’s business strategy, financial condition, or results of operations.
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.
The CEO also 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.
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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.
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Item 1C. CYBERSECURITY The Company maintains a cybersecurity program designed to identify, assess, and manage material risks from cybersecurity threats across all business segments.
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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.
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Our cybersecurity program considers cybersecurity risks alongside other company risks as part of our overall enterprise risk assessment process, and shares common methodologies, reporting channels and governance processes that apply to other risks impacting the company, such as regulatory, financial and operational risks.
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While educational resources about cybersecurity risks are shared amongst Information Technology (“IT”) staff across segments, segment-specific IT staff are empowered to evaluate and address cybersecurity risks within their reporting segment in alignment with the Company’s overall business objectives and operational needs.
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Each reporting segment is responsible for monitoring and responding to risks within its operations, supported by annual training, standardized controls, and companywide policies. The Company engages third-party consultants and technology providers to test and evaluate its security posture, provide independent assessments, and support remediation efforts.
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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.
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The Company also assesses cybersecurity risks presented by key suppliers and service providers, document their security posture through internal tools, and in certain cases requires third party audit reports or contractual notification of security incidents.
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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.
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Daily monitoring and incident response activities are carried out by IT staff, with escalation protocols to the Company’s Chief Technology Officer (“CTO”) and Chief Executive Officer (CEO) as appropriate. FrameVR.io maintains its own cybersecurity program in consultation with the CTO. The Company has processes in place to log, track, and remediate incidents, and to coordinate responses across reporting segments.
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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.
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Oversight of risks from cybersecurity threats is provided by the Board through the Board’s Nominating and Corporate Governance Committee, which receives quarterly reports from the CTO on emerging threats, program initiatives, regulatory compliance, and any incident activity.
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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.
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The CTO, in coordination with IT team members and legal team support segment leaders, ensures that significant developments are escalated to the Board, and the CEO retains ultimate responsibility for the Company’s cybersecurity risk management. The CEO has over 25 years of technology leadership experience.
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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.
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The CTO has over 20 years of experience leading digital product and technology teams with a focus on delivering innovative software solutions that have served millions of consumers globally and internal enterprise groups. She drives business transformation through secure, scalable platforms focused on software reliability, user experience, data integrity, and system architecture.
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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.
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She has extensive experience in dealing with system security implementations, data architectures, risk mitigation and system protections. She holds a Master of Business Administration, with a specialty in Executive Leadership, from Royal Roads University and undergraduate degrees from Queen's University and the University of British Columbia. 18 Table of Contents
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For 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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that our leased facilities are adequate to meet current needs and that additional facilities will be available for lease to meet future needs.
Biggest changeThe Company believes its leased facilities are adequate for current operations and that additional space would be available to meet future needs.
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Item 2. PROPERTIES Our principal corporate office is located at 2219 Rimland Drive, Suite 301, Bellingham, Washington and is leased office space.
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Item 2. PROPERTIES The Company leases its principal corporate office in Bellingham, Washington. As of December 31, 2025, the Company also leased small offices in various jurisdictions to meet regulatory and licensing requirements and, in certain cases, to provide space for managing brokers or drop-in use by agents. The Company does not own any real property.
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We also lease small office spaces in a number of regions in which we operate, in order to comply with regulatory and licensing requirements within those jurisdictions and, in certain instances, to provide office space to our managing brokers and drop-in space for our agents.
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In some of these instances, the managing brokers are financially responsible for a significant portion of the rental expense associated with a leased office space. We generally do not provide office space for the agents other than for drop-in service. We do not own any real property.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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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
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. 19 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDividends 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.
Biggest changeThe Board currently intends to continue paying quarterly dividends. However, payment of cash dividends is at the discretion of the Board 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.
Any shares repurchased under the program are returned to the status of authorized but unissued shares of common stock until retired.
Repurchases under the program can be discontinued at any time the Board 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.
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.
No date has been established for the completion of the share repurchase program and the Company is 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.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information The common stock of eXp is traded on the Nasdaq Global Market under the trading symbol “EXPI”.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The common stock of eXp is traded on the Nasdaq Global Market under the trading symbol “EXPI”. Holders As of February 17, 2026, the Company had approximately 103,034 stockholders of record. Dividends During 2025, cash dividends paid totaled $30,773.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers We may repurchase shares of our common stock from time to time at prevailing market prices, depending on market conditions, through open market, privately negotiated transactions, or through a 10b5-1 plan.
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 Company may repurchase shares of our common stock from time to time at prevailing market prices, depending on market conditions, through open market, privately negotiated transactions, or through a 10b5-1 plan.
Refer 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.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers Share repurchase activity during the three months ended December 31, 2025 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 10/1/2025-10/31/2025 ​ - ​ $ - ​ - ​ $ 243,105,741 11/1/2025-11/30/2025 ​ 928,827 ​ 10.77 ​ 928,827 ​ 233,105,769 12/1/2025-12/31/2025 ​ - ​ - ​ - ​ 233,105,769 Total ​ 928,827 ​ $ 10.77 ​ 928,827 ​ ​ (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, 2019.
The stock repurchase program is more fully disclosed in Note 9 – Stockholders’ Equity to the consolidated financial statements included elsewhere in this Annual Report. Company Stock Performance The following graph compares the performance of the Company’s common stock to the Standard & Poor’s (“S&P”) 500 Index and the S&P Homebuilders Select Industry Index.
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Trading in our common stock quoted on the Nasdaq Global Market is characterized by wide fluctuations in trading prices due to many factors, some of which may have little to do with our Company’s operations or business prospects. We cannot assure investors that there will be a market for our common stock in the future.
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The graph assumes $100 was invested in each investment option as of December 31, 2020 and that dividends, if any, were reinvested.
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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.
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Past stock price performance is not necessarily indicative of future stock price performance. 20 Table of Contents ​ ​ ​ ​ ​ ​ ​ Year 2020 2021 2022 2023 2024 2025 EXPI $ 100.00 $ 107.00 $ 36.00 $ 50.00 $ 38.00 $ 30.00 S&P 500 Index 100.00 127.00 102.00 127.00 157.00 182.00 S&P Homebuilders Index (XHB) 100.00 150.00 106.00 171.00 189.00 188.00 ​ ​ Item 6. [RESERVED]
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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.
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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.
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The S&P 500 Index is a capitalization-weighted index of domestic equities of the largest companies traded on the NYSE and Nasdaq. The S&P Homebuilders Select Industry Index is a diversified group of holdings representing home building, building products, home furnishings and home appliances.
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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]

Item 7. Management's Discussion & Analysis

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

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Biggest changeYear ended December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ Year Ended ​ Change 2024 vs. 2023 ​ December 31, 2024 ​ December 31, 2023 ​ $ % ​ ​ ​ Statement of Operations Data: ​ ​ ​ ​ ​ ​ ​ ​ Revenues $ 4,567,672 ​ $ 4,273,821 ​ $ 293,851 ​ 7% Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ Commissions and other agent-related costs ​ 4,225,277 ​ 3,953,897 ​ 271,380 ​ 7% General and administrative expenses ​ 252,369 ​ 247,799 ​ 4,570 ​ 2% Technology and development expenses ​ 58,182 ​ 59,547 ​ (1,365) ​ (2)% Sales and marketing expenses ​ 11,908 ​ 12,056 ​ (148) ​ (1)% Impairment expense ​ 4,930 ​ - ​ 4,930 ​ -% Litigation contingency ​ 34,000 ​ - ​ 34,000 ​ -% Total operating expenses ​ 4,586,666 ​ 4,273,299 ​ 313,367 ​ 7% Operating (loss) income ​ (18,994) ​ 522 ​ (19,516) ​ (3,739)% Other (income) expense ​ ​ ​ ​ ​ ​ ​ ​ Total other (income) expense, net ​ (4,445) ​ (4,383) ​ (62) ​ (1)% Equity in losses of unconsolidated affiliates ​ 1,168 ​ 1,388 ​ (220) ​ (16)% Total other (income) expense, net ​ (3,277) ​ (2,995) ​ (282) ​ (9)% (Loss) income before income tax expense ​ (15,717) ​ 3,517 ​ (19,234) ​ (547)% Income tax (benefit) expense ​ 1,071 ​ (16) ​ 1,087 ​ (6,794)% Net (loss) income from continuing operations ​ (16,788) ​ 3,533 ​ (20,321) ​ (575)% Adjusted EBITDA (1) ​ $ 75,483 ​ $ 65,328 ​ $ 10,155 ​ 16% (1) Adjusted EBITDA is not a measurement of our financial performance under U.S.
Biggest changeThe decrease in consolidated adjusted EBITDA reflects a decrease in operating results related to increased agent capping and lower agent fees, as well as increased employee-related, technology and legal expenses, which more than offset increased revenues. 23 Table of Contents Consolidated Operating Performance ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2025 ​ Year Ended December 31, 2024 ​ Change 2025 vs. 2024 Statement of Operations Data: ​ ​ ​ ​ ​ ​ Revenues $ 4,772,311 ​ $ 4,567,672 ​ 4% Commissions and other agent-related costs ​ 4,438,733 ​ 4,225,277 ​ 5% Gross profit ​ 333,578 ​ 342,395 ​ (3)% Operating expenses ​ ​ ​ ​ ​ ​ General and administrative expenses ​ 274,871 ​ 252,369 ​ 9% Technology and development expenses ​ 69,618 ​ 58,182 ​ 20% Sales and marketing expenses ​ 10,555 ​ 11,908 ​ (11)% Impairment expense ​ - ​ 4,930 ​ (100)% Litigation contingency ​ - ​ 34,000 ​ (100)% Total operating expenses ​ 355,044 ​ 361,389 ​ (2)% Operating income (loss) ​ (21,466) ​ (18,994) ​ (13)% Other (income) expense ​ ​ ​ ​ ​ ​ Other (income) expense, net ​ (1,513) ​ (4,445) ​ 66% Equity in (income) losses of unconsolidated affiliates ​ 281 ​ 1,168 ​ (76)% Total other (income) expense, net ​ (1,232) ​ (3,277) ​ 62% Income (loss) before income tax expense ​ (20,234) ​ (15,717) ​ (29)% Income tax (benefit) expense ​ 2,480 ​ 1,071 ​ 132% Net income (loss) from continuing operations ​ (22,714) ​ (16,788) ​ (35)% Net income (loss) from discontinued operations ​ - ​ (4,479) ​ 100% Net income (loss) ​ (22,714) ​ (21,267) ​ (7)% Commissions and Other Agent-Related Costs Commissions and other agent-related costs increased 5% primarily because of the increase in real estate transactions and increased home sales prices, as well as increased agent capping.
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 Segment EBITDA and a reconciliation of Adjusted Segment EBITDA to net income, and a discussion of why we believe Adjusted Segment 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 segment adjusted EBITDA and a reconciliation of segment adjusted EBITDA to net income, and a discussion of why we believe segment adjusted EBITDA is useful to investors, see “Non-U.S. GAAP Financial Measures”.
The Company’s presentation of Adjusted Segment EBITDA may not be comparable to similar measures used by other companies.
The Company’s presentation of segment adjusted EBITDA may not be comparable to similar measures used by other companies.
We believe that Consolidated Adjusted EBITDA and Adjusted Segment EBITDA provides useful information about our financial performance, enhances the overall understanding of our past performance and future prospects and allows for greater transparency with respect to a key metric used by our management for financial and operational decision-making.
We believe that consolidated adjusted EBITDA and segment adjusted EBITDA provides useful information about our financial performance, enhances the overall understanding of our past performance and future prospects and allows for greater transparency with respect to a key metric used by our management for financial and operational decision-making.
We believe that Adjusted Segment EBITDA helps identify underlying trends in our business that otherwise could be masked by the effect of the expenses that we exclude in Adjusted Segment EBITDA.
We believe that segment adjusted EBITDA helps identify underlying trends in our business that otherwise could be masked by the effect of the expenses that we exclude in segment adjusted EBITDA.
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.
GAAP measures of consolidated adjusted EBITDA and segment adjusted 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.
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.
The Company’s future capital requirements will depend on many factors, including the outcome of pending antitrust litigation settlement, its level of investment in technology, its rate of growth into new markets and cash used to pay quarterly cash dividends and repurchase shares of the Company’s common stock.
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.
Some of these limitations are: ● Consolidated adjusted EBITDA and segment adjusted 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 28 Table of Contents ● Consolidated adjusted EBITDA and segment adjusted 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.
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.
Management evaluates the operating results of each of its reportable segments based upon revenue, Segment adjusted EBITDA and operating income (loss). Segment adjusted EBITDA is defined by us as net income before depreciation and amortization, interest expense, income taxes, stock compensation expense, stock option 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 (loss) 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 consolidated adjusted EBITDA and a reconciliation of consolidated adjusted EBITDA to net income (loss), and a discussion of why we believe consolidated 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 and Adjusted Segment EBITDA compared to net income, the closest comparable U.S. GAAP measure.
Consolidated 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 several limitations related to the use of consolidated adjusted EBITDA and segment adjusted EBITDA compared to net income, the closest comparable U.S. GAAP measure.
Stock-based compensation awards are measured at the grant date fair value and the stock-based compensation cost is recognized over the requisite service period of the awards, usually the vesting period, on a straight-line basis, net of forfeitures. The Company reduces recorded stock-based compensation for forfeitures when they occur.
The Company accounts for stock-based compensation using a fair value method. Stock-based compensation awards are measured at the grant date fair value and the stock-based compensation cost is recognized over the requisite service period of the awards, usually the vesting period, on a straight-line basis, net of forfeitures. The Company reduces recorded stock-based compensation for forfeitures when they occur.
There can be no assurance that future cash dividends will be declared by the Board of Directors or that the stock repurchase program will be sustained or proceed at historical levels.
There can be no assurance that future cash dividends will be declared by the Board or that the stock repurchase program will be sustained or proceed at historical levels.
Currently, our primary use of cash on hand is to sustain and grow our business operations, including, but not limited to, commission and revenue share payments to agents and brokers and cash outflows for operating expenses.
Operations Currently, the Company’s primary use of cash on hand is to sustain and grow its business operations, including, but not limited to, commission and revenue share payments to agents and brokers and cash outflows for operating expenses.
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.
As of December 31, 2025, 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 total valuation allowance of $0.5 million was recorded.
SEGMENTS The Company has three operating and reportable segments as follows: North American Realty, International Realty and Other Affiliated Services. We report corporate expenses, as further detailed below, as “Corporate expenses and other.” All segments follow the same basis of presentation and accounting policies.
Segment Operating Performance The Company has three operating and reportable segments as follows: North American Realty, International Realty and Other Affiliated Services. We report corporate expenses, as further detailed below, as “Corporate expenses and other.” All segments 24 Table of Contents follow the same basis of presentation and accounting policies.
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.
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 the Company’s most recent estimates on probable achievement of the performance measures.
Our capital requirements may be affected by factors which we cannot control such as the changes in the residential real estate market, interest rates and other monetary and fiscal policy changes to the manner in which we currently operate.
The Company’s capital requirements may be affected by factors which it cannot control such as the changes in the residential real estate market, interest rates and other monetary and fiscal policy changes to the manner in which it currently operates.
Commissions earned on real estate transactions are recognized at the completion of a real estate transaction once we have satisfied our performance obligation. Agent-related fees are currently recorded as a reduction to commissions and other agent-related costs.
Commissions earned on real estate transactions are recognized at the completion of a real estate transaction once the Company has satisfied its performance obligation. Agent-related fees are currently recorded as a reduction to commissions and other agent-related costs.
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. See Note 10 – Segment Information to the consolidated financial statements included elsewhere in this Annual Report for additional information regarding the Company’s business segments.
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.
GAAP financial measures, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are 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.
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 .
Legal Proceedings For information regarding the Company’s expected cash requirement related to settlement costs, see “ Contingencies ” under Note 13 – Commitments and Contingencies to the consolidated financial statements included elsewhere in this Annual Report .
The Company, as principal, satisfies its obligation upon the closing of a real estate transaction. As principal and upon satisfaction of our obligation, the Company recognizes revenue in the gross amount of consideration to which we expect to be entitled. Revenue is derived from assisting homebuyers and sellers in listing, marketing, selling and finding real estate.
As principal and upon satisfaction of the Company’s obligation, the Company recognizes revenue in the gross amount of consideration to which the Company expects to be entitled. Revenue is derived from assisting homebuyers and sellers in listing, marketing, selling and finding real estate.
North American Realty revenue increased 6% in 2024 compared to 2023 primarily due to an increase in average selling price in the U.S. and in overall real estate transactions in Canada, and improved agent productivity, partially offset by reductions in our agent base.
North American Realty revenue increased 3% during 2025 compared to 2024 primarily due to an increase in home sale prices in the U.S. and in overall real estate transactions in Canada, and improved agent productivity, partially offset by reductions in the Company’s agent base.
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.
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, from which the Company earns brokerage commissions and related fees.
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.
Cash equivalents are comprised of financial 25 Table of Contents instruments with an original maturity of 90 days or less from the date of purchase, primarily money market funds. The Company currently does not hold any other marketable securities. We currently do not hold any bank debt, nor have we issued any debt instruments through public offerings or private placements.
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.
Key Business Metrics The following table outlines the key business metrics that we periodically review to track the Company’s performance: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ Performance: ​ ​ ​ ​ ​ ​ Agent NPS ​ 75 ​ 76 ​ 73 Agent count ​ 83,060 ​ 82,980 ​ 87,515 Real estate sales transactions ​ 440,163 ​ 434,165 ​ 422,772 Real estate sales volume (2) ​ $ 194,038,232 ​ $ 185,170,695 ​ $ 169,202,948 Other real estate transactions ​ 80,468 ​ 84,524 ​ 71,636 Real estate per transaction cost ​ $ 624 ​ $ 559 ​ $ 573 Revenues (2) ​ $ 4,772,311 ​ $ 4,567,672 ​ $ 4,273,821 Gross profit (2) ​ $ 333,578 ​ $ 342,395 ​ $ 319,924 Operating income (loss) (2) ​ ($ 21,466) ​ ($ 18,994) ​ $ 522 Consolidated adjusted EBITDA (1)(2) ​ $ 33,172 ​ $ 75,483 ​ $ 65,328 (1) Consolidated adjusted EBITDA is not a measurement of our financial performance under U.S.
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.
During 2025, the Company utilized its cash on hand to support our agent productivity, growth initiatives and investment in technology, the first payment of the litigation contingency in the antitrust lawsuits settlement and to a lesser extent, for repurchases of its common stock and quarterly cash dividends.
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”).
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 are not included, and 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, 2024.
The decrease in income tax (benefit) expense was primarily attributable to the decrease in excess benefit from stock-based compensation in the current year. 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. Year ended December 31, 2023 vs.
Income Tax (Benefit) Expense The increase in income tax (benefit) expense was primarily attributable to the decrease in research and development (“R&D”) credit generation in the current year. Refer to Critical Accounting Policies and Estimates within the MD&A and Note 12 - Income Taxes to the consolidated financial statements included elsewhere in this Annual Report for further information.
The following tables present a reconciliation of Adjusted EBITDA, the most comparable U.S.
The following table presents a reconciliation of consolidated adjusted EBITDA to the most comparable U.S.
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.
GAAP financial measure, for each of the periods presented: ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2025 ​ 2024 ​ 2023 Net income (loss) from continuing operations ($ 22,714) ​ ($ 16,788) ​ $ 3,533 Total other (income) expense, net (1,232) ​ (3,277) ​ (2,995) Income tax (benefit) expense 2,480 ​ 1,071 ​ (16) Depreciation and amortization 9,562 ​ 10,289 ​ 10,892 Impairment expense - ​ 4,930 ​ - Litigation contingency - ​ 34,000 ​ - Stock-based compensation expense (1) 38,610 ​ 37,285 ​ 43,178 Stock option expense 6,466 ​ 7,973 ​ 10,736 Consolidated adjusted EBITDA $ 33,172 ​ $ 75,483 ​ $ 65,328 (1) This includes agent growth incentive stock compensation expense and stock compensation expense related to business acquisitions.
Our operating profit decreased ($15.8) million in 2023, compared to 2022 due to a decrease in revenues partially offset by a decrease in operating expenses. Adjusted EBITDA Management reviews Adjusted EBITDA, which is a non-U.S. GAAP financial measure, to understand and evaluate our core operating performance. 36 Adjusted EBITDA increased $10.2 million in 2024, compared to 2023.
Consolidated Adjusted EBITDA Management reviews consolidated adjusted EBITDA, which is a non-U.S. GAAP financial measure, to understand and evaluate our core operating performance. Consolidated adjusted EBITDA decreased by $42.3 million in 2025, compared to 2024.
We believe that our existing balances of cash and cash equivalents and cash flows expected to be generated from our operations will be sufficient to satisfy our normal operating requirements for at least the next 12 months.
Liquidity and Capital Resources The Company believes that its existing balances of cash and cash equivalents and cash flows expected to be generated from its operations will be sufficient to satisfy its normal operating requirements for at least the next 12 months and beyond. As of December 31, 2025, the Company’s cash and cash equivalents totaled $124.2 million.
The Company is contractually obligated to provide services for the fulfillment of transfers of real estate between buyers and sellers. The Company provides these services itself and controls the services necessary to legally represent the transfer of real estate. Correspondingly, the Company is defined as the principal.
The Company provides these services itself and controls the services necessary to legally represent the transfer of real estate. Correspondingly, the Company is defined as the principal. The Company, as principal, satisfies its obligation upon the closing of a real estate transaction.
Other real estate transactions Other real estate transactions are recorded for leases, rentals and referrals that are undertaken by our agents and brokers. Other real estate transactions increased 18% in 2024, compared to 2023.
Real estate sales volume increased 5% in 2025 compared to 2024 driven by increased sales prices in North America and in our international markets, and to a lesser extent, increased transactions. Other real estate transactions Other real estate transactions are recorded for leases, rentals and referrals that are undertaken by the Company’s agents and brokers.
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.
At each reporting period, the Company estimates and accrues revenue for closed transactions for which it is entitled to, but have not yet received, a commission due to those transactions settling after the reporting period. The accrual for this estimated revenue was immaterial for the years ended December 31, 2025 and 2024.
Real estate per transaction cost decreased (2.6)% in 2024, compared to 2023, primarily due to lower costs attributable to cost containment initiatives, partially offset by legal expenses related to the antitrust lawsuits. Revenues Revenues represent the commission revenue earned by the Company for closed brokerage real estate transactions.
Real estate per transaction cost increased during 2025 compared to 2024, primarily due to employee-related, technology and legal expenses. Revenues Revenues represent the commission revenue earned by the Company for closed brokerage real estate transactions.
The 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.
Cash Flows The following table presents our cash flows for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ 2024 ​ Net cash provided by operating activities ​ $ 118,611 ​ $ 191,514 ​ Net cash used in investing activities ​ (23,472) ​ (19,470) ​ Net cash used in financing activities ​ (86,538) ​ (170,377) ​ Effect of changes in exchange rates on cash, cash equivalents and restricted cash ​ 4,274 ​ (2,972) ​ Net change in cash, cash equivalents and restricted cash ​ $ 12,875 ​ ($ 1,305) ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, 2025, cash provided by operating activities decreased (38)% compared to the same period in 2024, primarily due to lower agent equity program participation, increased accounts receivable, net, due to the timing of revenue in December, as well as the first payment of $17 million related to the antitrust litigation accrual, partially offset by an increase in accrued expenses.
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.
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 and other items that are not core to the operating activities of the Company.
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.
See Note 13 – Commitments and Contingencies to the consolidated financial statements included elsewhere in this Annual Report for further information related to the Company’s 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 consolidated adjusted EBITDA and segment adjusted EBITDA, non-U.S.
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.
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. The Company is contractually obligated to provide services for the fulfillment of transfers of real estate between buyers and sellers.
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.
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. 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 the Company’s awards.
These expenses include employee-related costs and other expenses related to the maintenance and development of the technology used by both our agents and our employees. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change 2024 vs. 2023 ​ December 31, 2024 ​ December 31, 2023 ​ $ % ​ ​ ​ Sales and marketing expenses ​ $ 11,908 ​ $ 12,056 ​ ($ 148) ​ (1)% Sales and marketing expenses decreased (1)% in 2024 compared to 2023 due to decreased advertising in the U.S. and Canada residential real estate market. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change 2024 vs. 2023 ​ December 31, 2024 ​ December 31, 2023 ​ $ % ​ ​ ​ Total other (income) expense, net ​ ($ 3,277) ​ ($ 2,995) ​ ($ 282) ​ (9)% Other (income) expense, net increased 9% primarily due to increased interest income when compared to 2023.
These expenses include employee-related costs and other expenses related to the maintenance and development of the technology used by both the Company’s agents and employees . Sales and Marketing Expenses Sales and marketing expenses decreased (11)% in 2025 compared to 2024 due to decreased lead capture and advertising expenses in the residential real estate market.
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.
The Company’s significant accounting policies are described in Note 2 – Summary of Significant Accounting Policies to the consolidated financial statements included elsewhere in this Annual Report.
Real estate sales transactions increased 2.7% in 2024, compared to 2023, primarily driven by increased sales volume in Canada and in our international markets. Real estate sales volume increased 9.4% in 2024, compared to 2023 driven by increased sales prices, and to a lesser extent, increased transactions.
Transaction volume represents the total sales value for all transactions. Real estate sales transactions increased 1% during 2025 compared to 2024, primarily driven by increased sales transactions in Canada and in our international markets.
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.
For the year ended December 31, 2025, cash used in our investing activities increased 21% compared to the same period in 2024, primarily due to an increase in investments in unconsolidated subsidiaries. 26 Table of Contents For the year ended December 31, 2025, cash used in financing activities decreased by (49)%, compared to the same period in 2024, primarily related to lower repurchases of our common stock of ($84.9) million.
These estimates are calculated based on the agent’s historical performance for each award type. Also, the requisite service period at the grant date of performance awards is estimated based on the probability of the period of time it will take an agent to meet the performance metric.
Also, the requisite service period at the grant date of performance awards is estimated based on the probable amount of time it will take to meet the performance metric. The value of the stock award is amortized over this period and recognized as stock-based compensation expense starting on the grant date.
Operating (loss) profit in 2024 includes $34.0 million related to litigation contingency accrual and $4.9 million of impairment expense Operating profit, excluding the litigation contingency accrual and the impairment expense in 2024 improved substantially due to increased revenue, net of agent commissions and other agent-related costs and lower operating costs, partially offset by legal expenses related to the antitrust lawsuits.
Operating Income (Loss) Operating income (loss) increased in 2025, when compared to 2024, due to increased legal expenses and accruals, employee-related and other operating expenses, including expenses to support our continued technology improvements. Operating income (loss) in 2024 includes $34.0 million related to litigation contingency accrual and $4.9 million of impairment expense.
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.
The following table reflects the results of each of the Company’s reportable segments for 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ December 31, 2024 ​ Change 2025 vs. 2024 ​ ​ ​ ​ ​ ​ Statement of Operations Data: ​ ​ ​ ​ ​ ​ Revenues ​ ​ ​ ​ ​ North American Realty ​ $ 4,624,913 ​ $ 4,478,293 ​ 3% International Realty ​ 146,930 ​ 88,146 ​ 67% Other Affiliated Services ​ 2,873 ​ 6,105 ​ (53)% Corporate expenses and other ​ (2,405) ​ (4,872) ​ 51% Total Consolidated Revenues ​ $ 4,772,311 ​ $ 4,567,672 ​ 4% ​ ​ ​ ​ ​ ​ ​ Segment Adjusted EBITDA (1) ​ ​ ​ ​ ​ ​ North American Realty ​ $ 59,753 ​ $ 99,253 ​ (40)% International Realty ​ (9,933) ​ (9,481) ​ (5)% Other Affiliated Services ​ (5,804) ​ (4,876) ​ (19)% Corporate expenses and other ​ (10,844) ​ (9,413) ​ (15)% Total Segment Adjusted EBITDA (1) ​ $ 33,172 ​ $ 75,483 ​ (56)% ​ ​ ​ ​ ​ ​ ​ Operating Income (Loss) ​ ​ ​ ​ ​ North American Realty ​ $ 9,322 ​ $ 16,468 ​ (43)% International Realty ​ (11,674) ​ (10,492) ​ (11)% Other Affiliated Services ​ (6,153) ​ (11,615) ​ 47% Corporate expenses and other ​ (12,961) ​ (13,355) ​ 3% Total Consolidated Operating Income (Loss) ​ ($ 21,466) ​ ($ 18,994) ​ (13)% (1) Segment adjusted EBITDA is not a measurement of our financial performance under U.S.
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.
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. Litigation The Company is subject to various legal proceedings and claims that arise in the ordinary course of business, the outcomes of which are inherently uncertain.
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.
GAAP Financial Measures”. (2) Dollar amounts are presented in thousands 22 Table of Contents 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.
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.
International Realty revenue increased 67% during 2025 compared to 2024 primarily due to increased real estate transactions driven by increased productivity in previously launched markets, as well as the strategic launch of several new markets during the year. International Realty adjusted EBITDA and operating income (loss) reflect the higher costs of entering new countries.
Commissions and other agent-related costs include sales commissions, revenue share and stock-based compensation paid to our agents. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change 2024 vs. 2023 ​ December 31, 2024 ​ December 31, 2023 ​ $ % ​ ​ ​ General and administrative expenses ​ $ 252,369 ​ $ 247,799 ​ $ 4,570 ​ 2% General and administrative expenses increased 2% due to increased employee-related expenses and increased legal expenses related to the antitrust lawsuits, partially offset by lower costs related to the shareholders summit in 2024, because it was conducted virtually, and lower eXpcon costs.
Commissions and other agent-related costs include sales commissions, revenue share and stock-based compensation paid to the Company’s agents. General and Administrative Expenses General and administrative expenses increased 9% due to increased employee-related expenses, including severance and increased legal expenses and accruals, and increased costs in agent-related seminars and conferences.
General and administrative expenses include costs related to wages, employee stock compensation, and other general overhead expenses. ​ 38 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change 2024 vs. 2023 ​ December 31, 2024 ​ December 31, 2023 ​ $ % ​ ​ ​ Technology and development expenses ​ $ 58,182 ​ $ 59,547 ​ ($ 1,365) ​ (2)% Technology and development expenses decreased (2)%, primarily due to higher capitalized technology investments.
General and administrative expenses include costs related to wages, employee stock compensation, and other general overhead expenses. Technology and Development Expenses Technology and development expenses increased 20%, primarily due to increased technology expenses related to continued improvements in our technology offerings to our agents.
Revenues increased 6.9% in 2024, compared to 2023, primarily driven by increased home sale prices, and higher sales transactions. Revenues decreased (6.9)% in 2023, compared to 2022.
Revenues increased during 2025 compared to 2024, primarily driven by increased home sale prices in the U.S., and increased sales transactions in Canada and international markets. Gross Profit Gross profit decreased in 2025 when compared to 2024, reflecting revenue growth, offset by increased agent capping and lower agent fees.
In order to support and achieve our future growth plans, we may need or seek advantageously to obtain additional funding through equity or debt financing. We believe that our current operating structure will facilitate sufficient cash flows from operations to satisfy our expected long-term liquidity requirements beyond the next 12 months.
In order to support and achieve the Company’s future growth plans, it may need or seek advantageously to obtain additional funding through equity or debt financing. Net Working Capital Net working capital is calculated as the Company’s total current assets less its total current liabilities.
For the Canadian antitrust litigation, no accrual has been made as a loss is not probable, and a reasonable estimate cannot yet be determined. See Note 14 – Commitments and Contingencies to the consolidated financial statements included elsewhere in this Annual Report for further information related to our litigation . NON-U.S.
See Note 13 – Commitments and Contingencies to the consolidated financial statements included elsewhere in this Annual Report for further information related to the Company’s litigation. Share Repurchase Program The Company has an authorized share repurchase program which is currently approved by the Board up to $1.0 billion in aggregate.
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.
Other (Income) Expense, Net Other (income) expense, net increased 62% primarily due to lower interest income and increased other expenses. Other (income) expense, net includes interest income earned on cash and cash equivalents, and (earnings) losses related to equity investments.
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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.
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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the consolidated financial statements and accompanying notes included in Part II, Item 8 of this Annual Report. This Item generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
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The following discussion should be read together with our consolidated financial statements and related notes included elsewhere within this Annual Report. This discussion contains forward-looking statements that constitute our estimates, plans and beliefs. Our actual results could differ materially from those anticipated in these forward-looking statements.
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All dollar amounts presented below are in USD thousands except share amounts and per share data and as otherwise noted. 2025 Business Developments The Company announces new agent offerings, markets, and business updates at various times during the year. Significant announcements during the year ended December 31, 2025 included the following: First Quarter 2025: ● Announced expansion into Peru.
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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.
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Second Quarter 2025: ● Announced expansion into Ecuador and Türkiye. ● Launched Land and Ranch Division, empowering agents serving rural, recreational, and agricultural properties. ● Launched the Co-Sponsor Program, allowing agents to name both a Primary Sponsor and a Co-Sponsor. 21 Table of Contents ● Launched U.S. open-sourced Seller Advisory: Risks of Limited Market Exposure form .
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This MD&A is divided into the following sections: ● Overview ● Market Conditions and Industry Trends ● Segments ● Key Business Metrics ● Recent Business Developments ● Results of Operations ● Business Segment Disclosures ● Liquidity and Capital Resources ● Critical Accounting Policies and Estimates ● Non-U.S.
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Third Quarter 2025: ● Announced expansion into Japan. ● Appointed Jesse Hill as Chief Financial Officer of eXp World Holdings, Inc. ● Launched CRM of Choice, allowing agents to choose from three leading customer relationship management platforms.
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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.
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Fourth Quarter 2025: ● Announced expansion into Romania and the Netherlands. ● Launched Sports and Entertainment Division, empowering agents serving clients in the sports and entertainment industries. ● Appointed Carrie Lysenko as Chief Technology Officer of eXp Realty and Holly Mabery as Chief Brokerage Officer of eXp Realty. ● Launched LYVVE TM , the Company’s global property search platform aggregating listings and related data across multiple countries.
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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.
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Market Conditions and Industry Trends Our performance is closely tied to housing market activity, which is influenced by economic conditions such as employment, consumer confidence, mortgage availability, interest rates, and the balance of supply and demand.
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While we do not consider acquisitions a critical element of our ongoing business, we seek opportunities to expand and enhance our portfolio of solutions.
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Periods of economic growth and lower interest rates generally support higher home sales activity, while rising rates, affordability constraints, or broader economic slowdowns may reduce transaction volumes and pricing. Regulatory developments, geopolitical events, and shifts in consumer sentiment can also affect housing demand.
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Prior to 2024, eXp managed and reported its operations in four operating business segments which included, in addition to the current business segments, a Virbela segment covering eXp’s historical application-based Virbela business, which was considered discontinued operations beginning in the first quarter of 2024. The Company completed the disposition of Virbela during the fourth quarter of 2024.
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In 2025, U.S. home sales were relatively flat compared to 2024, and home sales prices increased 1.7%, according to the NAR. Inventory levels remain constrained, and new housing construction activity decreased during the year. These conditions may continue to limit transaction volumes in the near term.
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All prior period financial statements and segment information have been reclassified to conform to the current reporting structure in this Annual Report. See Note 4 – Discontinued Operations to the consolidated financial statements included elsewhere in this Annual Report for additional information regarding the discontinuation of Virbela.
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Despite these challenges, we believe the Company is positioned for growth with a strong base of agents, an efficient cloud-based operating model, and low fixed costs. This structure allows us to adapt quickly to market changes while supporting long-term productivity and retention.
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Strategy and Company-Wide Initiatives Our strategy is to grow organically in the North American and certain international markets by increasing our independent agent and broker network.
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Despite the challenging market conditions, aNPS was relatively flat, when compared to the prior year, and the Company continues to provide enhancements to agent programs and offerings, including the Co-Sponsor Program, CRM of Choice, and the launch of new specialized divisions. Agent Count The number of agents was relatively flat in 2025 compared to 2024.
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We continue to attract productive real estate agents and broker professionals that contribute to our growth; we are also committed to providing agents with the tools to help them grow their business and increase their productivity.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur 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.
Biggest changeThe Company’s investments in the net assets of the Company’s international operations were also subject to foreign exchange rate risk. As of December 31, 2025, the impacts of translations of foreign-denominated net assets of the Company’s international operations were immaterial to the Company’s consolidated financial statements.
The individual impacts to the operating income of hypothetical currency fluctuations in the Canadian dollar have been calculated in isolation from any potential responses to address such exchange rate changes in our other foreign markets. Our exposures to foreign currency risk related to our other operations in our other international locations were immaterial and have been excluded from this analysis.
The individual impacts to the operating income of hypothetical currency fluctuations in the Canadian dollar have been calculated in isolation from any potential responses to address such exchange rate changes in the Company’s other foreign markets. The Company’s exposures to foreign currency risk related to its other operations in international locations were immaterial and have been excluded from this analysis.
Foreign Currency Risk The majority of our net sales, expenses and capital purchases were transacted in U.S. dollars.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to market risk from foreign currency and exchange rate fluctuation and interest rate changes. The majority of the Company’s net sales, expenses and capital purchases were transacted in U.S. dollars.
As 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.
However, exposure with respect to foreign exchange rate fluctuation existed due to the Company’s operations throughout the Americas, Europe, the Middle East, Asia-Pacific, and South Africa. Based on fiscal 2025 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.
Historically, we have not hedged this exposure, although we may elect to do so in future periods. 46
The translation impacts related to the net assets of the Company’s international operations are recorded within accumulated other comprehensive income. Historically, the Company has not hedged this exposure, although it may elect to do so in future periods.
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Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market risk relates to the risk of the loss of fair value resulting from adverse changes in market rates and prices, such as interest rates and foreign currency exchange rates.
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The Company is also exposed to market risk for changes in interest rates on its financial instruments, which relate to the Company’s cash equivalents primarily invested in money market funds. The Company does not use derivative financial instruments in its investing activities. The Company places cash and cash equivalents with various major financial institutions.
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Market risk is directly influenced by the volatility and liquidity in the markets in which the related underlying financial instruments are traded. Sensitivity analysis measures the impact of hypothetical changes in interest rates, foreign exchange rates and other market rates or prices on the profitability of market-sensitive financial instruments and our results of operations.
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The Company protects its invested principal funds by limiting default risk, market risk and reinvestment risk. The Company mitigates against such risks by utilizing investment vehicles restricted to short-term U.S. government and agency obligations, thereby prioritizing capital preservation and immediate liquidity. 29 Table of Contents
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While we are exposed to market risk from foreign currency and exchange rate fluctuation, we do not have significant exposures to interest rate changes or commodity prices, nor do we expect to have significant exposure to interest rate changes or commodity prices in the foreseeable future.
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However, exposure with respect to foreign exchange rate fluctuation existed due to our 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 albeit each individually and in the aggregate to a small extent.

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