eXp World Holdings, Inc.

Good afternoon and welcome to eXp World Holdings First Quarter 2024 Earnings Fireside Chat via live stream and our metaverse on the web, Crane. My name is Denise Garcia, and I manage investor relations for eXp World Holdings. Today, we will begin with our earnings fireside chat with prepared remarks from Glenn Sanford, founder, chairman, and CEO of eXp World Holdings, and Leo Pereja, CEO of eXp Realty, followed by a review of the first quarter 2024 financial highlights presented by Kent Chang, principal financial officer and chief accounting officer of eXp World Holdings. Following our prepared remarks, we will open the call to a Q&A session with eXp World Holdings Covering Analysts and questions submitted to eXp. Let's begin with a review of the Safe Harbor. There'll be a number of forward-looking statements made today that should be considered in conjunction with the cautionary statements contained in the company's SEC filings. Forward-looking statements are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. Please see our filings with the SEC, including our most recent filed annual report on Form 10-K and quarterly reports on Form 10-Q for a discussion of specific risks that may affect our business performance and financial condition. We assume no obligation to update or revise any forward-looking information. As a reminder, today's call is being recorded and a replay will also be made available on expworldholdings.com. Now for a few logistics and then we'll get started. For those of you joining in frame today, to zoom in on a specific screen, you can click on that screen and then click Zoom In. If the content on that screen disappears or if you lose audio, simply refresh your page. While in frame, if you need help, just use the Help button at the bottom right Should you wish to ask a question during our presentation, you can enter your questions by scanning the QR code presented on this screen with your mobile phone or go to slido.com and type in the event code EXPI. From there, you can submit a question or vote up an existing question by giving a thumbs up if you'd also like that question to be asked. This screen will remain up and on the right-hand side of the stage for the duration of our presentation. Now I'll turn the call over to Glenn to begin our fireside chat.

Awesome, thanks Denise. And thanks everyone for joining us. And before we jump into our first quarter results, I wanna just review our business strategy and provide an update on our structure. Our strategy as from the beginning is to ultimately create the most agent-centric real estate brokerage on the planet and to really drive that value. One of the things we've been able to do is from the profitability of North America, it's actually enabled us to invest in growth opportunities across the business, including international, which we see as the largest potential driver of growth for the company. Through the profitability of eXp North America, we've been able to build a platform for agents worldwide that includes personal development, health resources, media, and technology. This quarter, we increased our operational efficiencies by focusing entirely on Frame, our metaverse where we're meeting today, and we've actually discontinued our Verbella operations. At a high level, we're now reporting on three business segments, North American Realty, International Realty, and then other affiliated services, which is all the other businesses, which includes Success and FrameVR.io. Kent will also review the results of each segment in a moment. We're also increasing the transparency of our operating expenses. Starting this quarter, we're reporting technology and development expenses separately. And as you'll see from our financials, we are a technology company really at our core and have achieved significant scale. Moving forward, we expect to leverage our investment to support margin expansion while continuing to innovate and lead which is in technology. Now I'll move to some highlights from the first quarter. I'll start with NPS. The work we did in 2023 to improve the agent value proposition, increased support in our agents during the market downturn, helped drive a higher net promoter score, which resulted in a three point increase from last year, from 70 to 73. As you know, agent net promoter score is a good indicator of our future growth and our retention, an important measure of our success that is often not reflected in the current quarter's financial results. I'm also pleased to report a 5% increase in real estate transactions an 11% increase in overall revenue. We continue to add multiple highly productive teams and agents around the world during this quarter as well, which we highlight in a separate press release like we did back in mid-April. We think our focus on bringing teams of agents will not only improve the quality of our agents, it will lead to productivity gains, particularly when the market downturn ends. We feel confident about this because our internal research shows eXp agents on teams are 77% more productive than individual agents. Last quarter, I mentioned that I expect international realty to be the largest driver of future growth for the company, and the international segment continues to outperform with revenue from international increasing 45% over the first quarter of 2023. We continue to strengthen the agent value proposition and expand our management team across a variety of key functions, such as human resources, technology, marketing, and growth. Last week, Wendy Forsyth joined our team as our chief marketing officer. And earlier in the month, we actually named Leo Perea as CEO of eXp Realty. I'm handing the reins of eXp Realty over to Leo so I can focus on more macro opportunities at the eXp World Holdings level. Leo's truly an innovative and well-recognized leader in the industry. He's iterated and improved on the agent value proposition since joining eXp two years ago. And I think he'll continue to add value to our agents, strengthening our competitive advantage and drive growth for eXp Realty across the board. With that, I'll turn the call over to Leo, who can walk you through the first quarter highlights in our core businesses. Leo.

Glenn, thanks everyone for joining us today. While this isn't my first time I've joined our quarterly call, this is my first time as the CEO of eXp Realty. I'm excited to be here and I'm excited about the growth potential this year and the years to come. We're doing exciting things and I've had the good fortune to be part of that. And we've started to see the results from our efforts across the business. I'll start with an industry update. Home sale transactions in the US were down nearly 3%. Despite that, eXp Realty was up 2%. As we continue to do better than the industry, we continue to grow our market share. market share grew nearly 5%, increasing to 4.4 of all home sale transactions in the United States. Thanks to the hard work of our agents and teams during what's undoubtedly one of the most challenging markets most of us have ever experienced in our careers. Moving on to agents. As Glenn mentioned, NPS is our leading indicator for our future growth, reflecting on our agent satisfaction with eXp. ANPS helps us at the management team understand where we can improve and where we can focus our resources. Last year, we said we focus on delivering vetted, high-quality opportunities to agents, expanding personal and professional services like success, revenue share, equity opportunities, and affiliate agreements, streamlining operational support to our agents and enhancing our technology. We delivered all these promises in 2023, and we believe it's reflected in the higher agent NPS scores this year. More specifically, agents have told us that they are happy about our expert care decks because they're able to get a quick resolution to their issues and have one phone number to contact 24 hours a day, seven days a week worldwide. They've also told us that they've been particularly happy about our transition from Verbella to exp.world or Frame. They're enjoying Frame because it's web-based, which makes it easier to access wherever they are working. Transaction processes have also improved, with 87% of our agents rating the process a 9 or a 10 on a scale of 1 to 10.