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eXp World Holdings (NASDAQ:EXPIManagement of ) highlighted the real estate brokerage company’s profitable business in North America, on an adjusted EBITDA basis, even in a challenging context as higher mortgage rates suppress real estate volume, during their call fourth quarter earnings. per share base, the company became a losslags behind analysts’ median estimate of break-even.
The quarter marks the first in which the company reports its revenues and adjusted EBITDA for its four segments: North American Realty, International Realty, Virbela and Other Affiliated Services.
North American Realty’s fourth-quarter adjusted EBITDA of $12.1 million fell from $24.5 million in the prior-year quarter, while International Realty’s adjusted EBITDA loss of $4.12 million widened from $2.22 million in the fourth quarter of 2021. Virbela’s Adjusted EBITDA loss of $958K was reduced from $2.44M per year ago, and Other Affiliated Services Adjusted EBITDA loss of $461K was reduced from $860K.
“We are very, very fortunate in our business to have the North American business really driving growth and profitability that allows us to invest not only in North America but also internationally and in our technologies,” said the chief financial officer. Jeff Whiteside.
Chairman, CEO and founder Glenn Sanford said the company is choosing to invest during the market downturn, a change in management’s approach. He noted that the company’s balance sheet has more than $100 million in cash and zero debt, “allowing us to remain agile and innovative in the various business segments in which we compete.”
“We think now is the time to really grow in a down market, now that we’ve broken down these segments, and you can see that we actually have a profitable model that’s scalable to scale in North America,” Sandford said. “Our goal is to make that a reality in many, many international markets around the world.”
During 2022, eXp Realty (EXPI) entered six new markets: the Dominican Republic, Greece, New Zealand, Poland and Dubai. The company began to slow its international expansion late last year, but will start to approach four to five new countries a year by the end of this year, Sanford said.
For the operating environment in 2023, Sanford expects the first and second quarters to be worse than the prior-year quarters, with the third quarter to be “a bit of a muddle.”
As for operating expenses, the company said the $93 million-$96 million per quarter it spent on total general and administrative expenses and marketing over the past three quarters is in the “range” of what it expects going forward. “So we don’t have a plan to overflow SG&A,” Whiteside said. “What we’re going to do is work on productivity in a big way.”
In trading on Wednesday afternoon, shares of eXp World (EXPI) fell 2.5%.
Take a look at eXp World (EXPI) results for the last 11 quarters here.
In December, SA contributor Horizon Capital, which is long-term bullish on EXPI, expects the real estate company to hit a rough patch as the housing market remains “essentially frozen.”
