Douglas Elliman Inc.

Welcome to Douglas Elliman's second quarter 2026 earnings conference call. This call is being recorded and simultaneously webcast. An archived version of the webcast will be available on the investor relations section of the company's website located at investors.elliman.com for one year. I would like to turn the conference over to Douglas Elliman's Vice President of Finance, Heather Capriola.

Thank you and good morning. On the call with me today is Michael Liebowitz, President and CEO of Douglas Elliman Inc., and Bryant Kirkland, CFO of Douglas Elliman Inc. During this call, the terms adjusted EBITDA and adjusted net loss will be used, as well as last 12 months or LPM metrics. These terms are non-GAAP financial measures and should be considered in addition to, but not as a substitute for, other measures of financial performance prepared in accordance with GAAP. Reconciliations to adjusted EBITDA and adjusted net loss are contained in the company's earnings release, which has been posted to the investor relations section of the company's website. Before the call begins, I would like to read a safe harbor statement. The statements made during this conference call that are not historical facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. These risks are described in more detail in the company's securities and exchange commission's filing. Any forward-looking statements made during this call are made as of today, and the company undertakes no duty to update or revise any such statement. whether as a result of new information, future events, or otherwise, except as required by law. Now, I would like to turn the call over to the Chief Executive Officer of Douglas Elliman, Michael S. Liebowitz.

Thank you, Heather. Good morning and thank you for joining us. On today's call, we will discuss the current operating environment and Douglas Elliman's financial results for the three and six months ended June 30th, 2026. All numbers presented this morning will be as of June 30, 2026, unless otherwise stated. Before we turn to our second quarter 2026 results, I would like to begin by summarizing some of our recent accomplishments that I believe speak directly to the strong future, vision, and momentum of this company. First and foremost, last month we announced the launch of our AI transformation. I want to be clear about what this launch is and what it is not. This is not simply a technology upgrade. This is a fundamental redesign of how Douglas Elliman operates, and more importantly, how we create value. For generations, residential real estate has been organized around the transaction, and for just as long, the data that those transactions generate has been monetized by nearly everyone except the brokerages that created it. Third-party portals and platforms built billion-dollar businesses on the back of data that our agents and our clients produced. We are changing that model. Our AI transformation is being conducted on two parallel tracks. The first is a company-wide modernization of our technology infrastructure using agentic AI powered by Google Cloud to automate routine workflows, consolidate our technology stack, and beginning in 2027, gradually achieve meaningful savings in our non-commissioned operating expenses. This is not aspirational. We are already in this execution. The second track is the build out of Elias, our newly formed intelligence company. Elias is designed to take Douglas Elliman's proprietary luxury real estate data and build a platform with the potential to generate new products, new revenue streams, and entirely new businesses beyond brokerage. Our AI transformation is in early stages But we are excited about where this technology can take us. Equally important, we are pursuing it from a position of financial strength with no long-term debt and over $100 million in cash. And Bryant will provide more detail on our financial position later in the call. This is a disciplined, self-funded pursuit. We expect to fund this initial Google Cloud rollout and Elias discovery and development work through existing resources. with a modest net incremental investment as a substantial portion of the spending replaces our existing technology expenditures. Moving on to our international pipeline, which continues to build and represents one of the most exciting growth opportunities in front of us. In June, we expanded into Paris, bringing our French network to 15 offices across France, Monaco and St. Barts. The Paris launch marks the next phase of our international growth strategy, and positions the firm in one of the world's most closely watched and coveted residential property markets. And we believe we are in the early stages of what Elliman Global can become. We also continued meaningful expansion of Elliman Capital in the second quarter. In May, we launched Elliman Capital in California through a strategic partnership with Mark Cohn and Cohn Financial Group, bringing out full suite of lending solutions, conventional and jumbo loans, construction financing, Commercial Lending, Bridge Loans, FHA, VA, and more to agents and clients across Greater Los Angeles. Then last month, we extended the platform into Texas with dedicated loan officers serving agents across Dallas-Fort Worth, Houston, and Austin, respectively. In both markets, the platform provides clients with competitive rates, fast approvals, and the expert guidance of our experienced mortgage professionals, all under the Douglas Elliman umbrella. Each expansion deepens the client relationship across the full transaction and adds a revenue opportunity beyond the commission. When I look at the talent we are bringing into this company, I am reminded of why Douglas Elliman remains the destination of choice for the best luxury agents in the business. In the second quarter, we extended our domestic footprint across several luxury markets, including New Hampshire. We also added a Georgetown office, our fourth in the Mid-Atlantic, as well as high-level agents in key markets. Our recruiting pipeline remains strong. Additionally, our agents continue to set the standard. Twenty-nine Douglas Elliman agents and teams were recognized in this year's Real Trends Verified plus the thousand, rankings spanning California, Colorado, Florida, Massachusetts, the Hamptons, and New York City. We are building a company that is smarter, faster, and more efficient. One that is better equipped to support our clients, agents, and employees than any other brokers in the industry. Every decision we make, every investment we pursue, including our AI transformation, element capital, international expansion, and the talent and leadership we are bringing in is in service of one goal, to build something that has never existed in residential real estate, a technology forward luxury enterprise with a truly global reach. Thank you, Michael.