Welcome to the eXp World Holdings Third Quarter 2025 Earnings Fireside chat via live stream at our Metaverse on the web, Frame. My name is Denise Garcia, and I manage Investor Relations for eXp World Holdings. Today, we will begin our earnings fireside chat with remarks from Leo Pareja, CEO of eXp Realty; Wendy Forsythe, CMO of eXp Realty; Felix Bravo, Managing Director, eXp Realty International; Jesse Hill, Chief Financial Officer of eXp World Holdings; and Glenn Sanford, Founder, CEO and Chairman of eXp World Holdings. Following our prepared remarks, we will open the call to a Q&A session with our speakers. Let's begin with a review of the forward-looking statements. There will 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 recently 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 statements or information. As a reminder, today's call is being recorded, and a replay will also be made available on eXp World Holdings. Now for a few logistics, and we'll get started. Welcome to our Metaverse on the web. For those of you joining in Frame today, to zoom in into a specific screen, you can click on that screen and then click zoom-in. If the content on the screen disappears or if you lose audio, simply refresh your page. While on Frame, if you need help, just use the "Help" button at the bottom right to link with tech support. 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 for that question to be asked. This screen will remain up on the right-hand side of the stage. Now I'll turn the fireside chat over to our speakers before opening the call to questions.

Thanks, Denise. We continue to grow and retain agents and get results. This quarter marked our second consecutive quarter of quarter-over-quarter agent growth. It's a great indication that our strategies and programs we've created to attract and retain agents are working. Not only have we been able to attract and retain agents, but we're creating a stronger, more productive agent base. Sales transactions per agent are up again, increasing 5% year-over-year. The number of our [indiscernible] agents is up 7% year-over-year and super excited, worldwide agent attrition has improved by 13% year-over-year. Let's talk a little bit more about retention and attrition in the U.S. on our next slide. In the U.S., the majority of our departing agents continue to be our lowest producing cohort, and we are retaining the highest producing agents, which are multiple times less likely to churn than our lower producing agents. In fact, of the nonproductive agents that left eXp, 63% left the industry altogether, but fewer agents are leaving with attrition improving by 18% year-over-year in the U.S. Our strategy to attract teams is working and helping drive the increase in productivity. 39% of new agents to eXp were on teams in the third quarter. Agents on teams are 79% more productive than individual agents. I'd like to highlight some of our notable teams that joined us. Starting with Tammy Register in North Carolina. Tammy spent a decade at KW and the prior decade at Hometown. She's consistently one of the [indiscernible] top agents in her market, either #1 or #2. We also welcomed a good friend of mine, Chris Heller, who was formerly CEO of Keller Williams Realty. He's held the #1 spot at Keller Williams, and he's held leadership roles across the industry in some of the most impactful companies in our…

Thanks, Leo. And building off of all the great information Leo was just talking about on eXp University, I want to share about our FastATTRACT program that eXp University launched in Q3. This is a program distinctly launched to help our agents build their revenue share lines. In FastATTRACT, we focused over a 6-week period, helping agents build their skills around building revenue share. And we had tremendous results with this program. In fact, the program was piloted in Q3, and the results were so successful that we're continuing on with the program in Q4, and it will become a part of our curriculum throughout 2026. So welcome FastATTRACT to eXp University's curriculum and congratulations to our 138 agents who had such tremendous results during our pilot program. We're really excited about the skill development that FastATTRACT will bring to help so many of our agents build their revenue share skills. Leo talked about the number of new joiners that were highlighted in the media. The second part of our PR strategy, in addition to highlighting our new joiners, is highlighting the thought leadership of our leaders in the media. And in Q3, we continued to highlight prominently our thought leadership around marketing and branding, AI and technology, women in leadership and advocacy for the consumer, grabbing headlines in all of the major industry trades for eXp. This is an important part of our brand messaging and voice strategy, and we did a really great job in Q3 in getting those headlines for us. In-person events continue to be another great part of what we do to build our culture and align in spending time with all of our agents here. And during Q3, we were excited to host a really phenomenal group of our top producers in Scottsdale, Arizona…

Thank you, Wendy, and thanks, everyone, for being here today. I'm really excited to share all the progress that we've been making on our international growth strategy. I'm going to dive into quite a lot. So let's start out on the next slide. As you can see, over this past year, we've been pretty busy. Year-to-date, we've successfully opened operations in 5 countries. We opened up Peru in Q1, Ecuador and Turkey in Q2, and South Korea and Japan opened just recently here in Q3. And the most important part about the fact that eXp continues to expand internationally is that in each and every single one of these countries. From day 1, we have opened up with active agents and transactions flowing through, even global referral transactions starting to happen, which we had in Japan the very first day. This is a testament to our new country launch playbook and how we are learning to open up countries more efficiently, open quicker, ramp up our agent count and transaction count faster, but more importantly, how we're attracting the right kind of agent, the productive agent looking to build their business both locally or even at a global level. Just recently here at eXpCon Miami, we announced our plans to open up Luxembourg, Netherlands, and Romania. We are really excited about these markets, and we are building off the momentum that we have created in EMEA by launching these 3 new countries in that region. We're confident in the leadership that we have found, which ties back to that new country playbook we've talked about so much this year, strong leadership and a strong value proposition that is focused on helping agents build the best possible business, whether that is to sell 5 to 10 homes or they want to…

Thank you, Felix. Congratulations on the $100 million milestone. That's an incredible accomplishment. And now I'll walk us through our consolidated operational and financial highlights for the third quarter beginning on the next slide. Starting with revenue, we generated $1.3 billion in the third quarter, up 7% compared to the third quarter last year with no material change in the macroeconomic environment. Real estate sales volume was up 7% for the third quarter, driven by an increase in home sales prices and agent productivity with a 3% year-over-year increase in sales transactions. Agent count was 83,446, down 2% year-over-year, but as Leo mentioned, a 1% quarter-over-quarter increase in 2025. Also, we continue to see an increase in transactions per agent, indicating that we are attracting and retaining highly productive agents. Our GAAP gross margin was 6.5%, down 57 basis points from Q3 of last year as a result of more productive agents hitting their cap. Our non-GAAP gross margin, and we still show this to compare to competitors who exclude stock comp and revenue share was 10.9%. Adjusted EBITDA of $17.7 million continues to be positive but down year-over-year, driven partially by the compressed gross margin that I mentioned, but also offset by improvements that we made to streamline operations in the first half of this year that are beginning to pay dividends now in Q3. Finally, we ended the quarter with a healthy cash position of $112.8 million on the balance sheet. On the next slide, I'll highlight our financial results by segment for the quarter. The North America Realty segment continues to be the largest revenue and profit generator for the company. North America revenue was $1.3 billion for the quarter with adjusted EBITDA of $23.1 million and operating income of $10.6 million. As a reminder, we are…

Thanks, Jesse, and thanks, everyone. This quarter has been about simplifying, strengthening, and scaling across every part of the organization. Obviously, I'll start with SUCCESS Enterprises because that's where I've been spending a fair bit of my time, and it now represents one of the blueprints at the edges that we're using for how we evolve eXp as a platform company. Last quarter, I shared that I'd be stepping in as Publisher & Managing Editor of SUCCESS. Since then, we took decisive action to streamline operations and reimagine the business. We focused really on 3 things: AI-driven operations. We've embedded AI throughout the back office product and operational workflow, we've eliminated unnecessary complexity and dramatically increasing output per team member, we actually replatformed SUCCESS.com. We rebuilt the site from the ground up for scalability. Again, we talk about this quite a bit, but we have really an incubating team of Vibe coders around the organization who are subject matter experts that we are repositioning to actually take on core development roles of platforms and systems inside the company. And then we are also renewing our SUCCESS Coaching Certification, which we'll do -- we'll launch in January 2026 with Courtland Warren. We've also introduced labs.success.com as a hub for experimentation, learning, and collaboration. Through these actions, we've reduced our annualized spend by more than $2 million since Q2 which is obviously quite an accomplishment while improving both speed, innovation and quite frankly, team cohesiveness. This transformation didn't just make success stronger, it also gave framework how to evolve other segments of the eXp platform. So revitalizing SUCCESS has become really the model for how we think about platform development across eXp. Our Vibe developers, the internal product teams building for agents, brokers or staff are now using the same approach to…

Great. Thanks, Glenn. So I'll kick it off with a question for everyone on the team before we open the call to questions from the audience and our analysts. First, this one is for you, Glenn. Since you started eXp, you've often talked about eXp being the platform for the future of real estate. How do you see that platform vision playing out now?

We've seen this really since the Internet started to take shape and form, the ability for people to be connected in a way that allows them to operate more seamlessly. So it obviously started with things as simple as e-mail. But now, of course, we've got virtual worlds, but all this is powered by high-speed Internet, you got Starlink, you got all these things. So you basically have all these, we'll say, bricks-and-mortar legacy infrastructures that are effectively being digitized and democratized as we go. And then that obviously changes, creates an opportunity for a different type of business model. Of course, we saw that in 2009 out of necessity. I quite frankly couldn't afford the offices I had, but I came out of technology and just recognized that eventually this would be the way that the world would operate. And of course, if you talk with Leo, talk to others, there hasn't been a new model launched in the last 4 to 5 years that is legacy based. Everything that's being built now is all leaning into this fully platform environment. And then you kind of look at the scale of those platforms, and we are 1 of 4 or 5 platforms that will fully scale out over time to capture a pretty good portion of the organized real estate business, of course, with everything else going on, it even puts us fortunately, but at some level, unfortunately. But fortunately, in a major way, we're super well positioned to take advantage of the new changes that are happening in the industry at large. So that only happens because of sort of this platform piece. And I talked about it in 2017, 2018 on earnings calls that I believe fundamentally that there would be about 5 different platforms for real estate. As it's looking, it looks like those will generally be the platforms that will emerge as the winners. So if you have fun, go back and listen to some of the early calls, but it's seeming like that's all sort of coming to fruition.

Great. Thanks. The next question is for Leo. Leo, as you mentioned, eXp continues to narrow the gap on agent growth in the U.S. What do you see as eXp's advantages over other brokerages, particularly in the midst of consolidation and change here in the U.S.

Thanks, Denise. To dovetail on a lot of what Glenn said, we're a fully scaled enterprise. We are no longer the disruptive start-up, but now we're probably considered one of the larger incumbents of the new breed. So I often say Glenn created a category, and we're that category leader. That means that we now have the vantage point advantage of being in all 50 states in addition to many, many international markets, but we have the cash flow, the sustainability and the ability to invest at a size and scale that most other of the smaller similar companies attempt to become us. And with the level of disruption that's coming through consolidation, I think we're uniquely positioned to become one of those surviving larger scaled enterprises that Glenn just referenced that he was able to kind of telegraph even 7, 8 years ago. So a couple of things. One is no one company or model will capture all the market. So if you look historically to the previous incumbents of RE/MAX and Keller Williams in both of their heydays, they never really got above 10% or 15% of total agent count in the United States in any given year. And that variance depends on the total number of agents at NAR to the total number of folks in the subsequent company. So it's not a winner-take-all situation. And I think the Compass Anywhere combination will probably serve a specific market of agents who are attracted to kind of the brand-first model versus we fundamentally believe that we're secondary to the agent. We believe the agent is the brand on the ground. And I think we continue to refine who are -- the agent we serve is, and I always like to say we're the home of that entrepreneurial agent, whether that is a solo producer or whether that is a team leader who wants to build a scaled enterprise, multistate, multi-market. I typically refer to us as a platform. So I would say some of our competitors want to be the app in the App Store, and we actually want to be the iOS providing them the tools to become the app. What I am very confident is, in this new world of fewer larger players, I think the only question is which one we will be either 1 or 2 or 3, but we will definitely be one of the scale players that has an opportunity in this unique marketplace.

Thanks, Leo. I'll ask the next question to Wendy. Wendy, what do agents want most from eXp? And how are you evolving the agent value stack to meet those needs?

Thanks, Denise. I think there's 2 things that agents are really looking for from eXp. The first one is innovative tools and technology to empower their business growth. Agents need to stay ahead in a competitive market. So they're turning to eXp for its forward-thinking solutions, whether it's Canva, whether it's CRM of Choice, Revenos, PayNow or My eXP, just to name a few. These are all tools that allow the agents to empower their marketing, branding and lead generation to be more accessible and effective so that they can scale their businesses effectively. The second thing agents are looking for from us are training, coaching and community. While we are a virtual brokerage, we are deeply rooted in real connection and education, whether it's our weekly big agent meetings, eXp University, Elevate Coaching, our one-on-one mentorship programs or eXpCon in Miami that I talked about during the presentation. We find ways to place real value on continuously learning, growing and connecting together with our top producers with supportive peers and with our leaders. So those 2 pillars, tech innovation and a collaborative community creates a powerful environment where our agents can thrive regardless of where they're at in their career. As Leo likes to say, we are a platform where you can build the dream for any size no matter where you're at.

So next, I'll go to Felix. How is eXP different from traditional brokerages in the newest countries that you've just added?

Yes. Thanks, Denise. I think that's a great question. In the Netherlands and Luxembourg, we see a market that is traditionally dominated by employed models. Something -- it's very similar to what we've seen in the U.K. U.K. is traditionally -- most agents are employed, and so they have a fixed income and a base salary from their brokerage or their state agency. Over the last 5 or 6 years since we've been open there, we've been disrupting that model. And actually, most recently, over the course of this year, we are now the #1 estate agency brand in terms of listings and sales. And so we've seen that our model can disrupt the employed model. And in Luxembourg and Netherlands, we're really excited to partner with agents to give them the opportunity to have much more competitive splits, but also to have a higher earnings potential and leverage the platform to grow their own brands instead of being just an employee to their state agency. Similarly, in Romania, we see that Romania is a market that is traditionally dominated by legacy franchise models and agents are typically on 50-50 splits, 60-40 splits and really do not have the opportunity to build their own business. And so we've seen our success bringing our model internationally. And in Romania, we're excited to partner with the agents there that have already started reaching out because they're excited about not just our competitive splits, but the opportunities to build their own business, build their own brand. And more importantly, in most of these markets, they've never seen a rev share model or an equity model. So we're giving the power to the agents for the very first time in many cases in these markets.

Great. All right. Jesse, a question for you, and then we'll kick it off to the analysts in the audience. Is there a particular growth metric that stood out to you this quarter?

Yes. Thank you, Denise. We track quite a few KPIs internally, of course. But one that I'd like to highlight for Q3 was our agent productivity, which we define as sales transactions per agent. Leo highlighted this in his introduction. But just to add some more color, it improved 5.4% year-over-year here in Q3. And at our scale, that translates into very meaningful gains. We're talking about 83,000-plus agents, 120,000-plus transactions just in the quarter. And so incremental improvements in this particular metric really begin to compound significantly on that kind of volume. It's also a testament -- we've been speaking about this for a few years now, right, the strategy of where the pros go to grow. And this is really a direct indicator on, is that actually happening, right? The whole strategy is to recruit, train and retain the most productive agents and teams and a 5.4% improvement just on the quarter in agent productivity shows that, that strategy is playing out for us.

Great. All right. So we'll open up the call to questions. [Operator Instructions] For now, I'll take our first question from Tom White at D.A. Davidson.

Two, if I could. First on OpEx. Jesse, you called out that sizable step down in G&A, which was able to kind of offset the impact of the lower gross margins. I'd be curious just to hear maybe what you thought like the top 2 or 3 things that you guys did or that affected that decline in G&A. And just curious how sustainable this new level is? Like is there anything -- any kind of onetime-ish or timing-related things that made it particularly low? And I guess just thinking about if the market fingers crossed kind of perks up at some point next year, like can you keep G&A here? Or will that sort of inevitably rise when revenues fingers crossed eventually kind of start growing more meaningfully? And then I got a quick follow-up.

Yes. Thanks for the question, Tom, and we're happy to be speaking to a surprise beat on G&A, right? It really speaks to -- we've had this talk track for a few quarters now, and we appreciate everyone's patience, right? We knew we were front-running some expenses as we were investing in AI and automation and stacking some of that OpEx. We saw $86.5 million in Q1. We saw $89 million, excluding the onetimes in Q2, and now we're down to $82 million to what we spoke to and to your question, Tom. I can say there's nothing accrued, nothing odd. This is our new base in Q3. We reserve the right to invest in interesting things that come across, right? And we also further expect to continue to drive unit economics down. So what you're seeing now is the result of what we've been speaking to for the last several quarters. You asked -- hit on 2 or 3 things. I'll say it's -- I think it's 2 real things. Back office streamlined operations. So really just taking a look at the way that we have structured our organization and the way that we process transactions and that sort of thing and really hitting on automation there as much as it could be driven by AI, but really just looking at it from a unit economics and efficiency play. The second part, of course, is the AI. We've offset a lot of what were previously manual processes. There's quite a bit of SaaS that we are now moving to internal tools and products for. I would say it's those 2 things, streamlined back-office operations and AI offsetting quite a bit of SaaS costs for us.

Okay. And then just on the agent count, nice to see another quarter of sequential growth. It sounds like Teams is a bright spot. I would love just maybe a bit more color on the Teams growth. Is it coming from particular parts of the country? Are the teams coming to you from particular competitors or other models? And then I guess, as you look at your overall value prop, what could you do to even kind of turbocharge the Teams attraction more, either from like kind of how you structure the economics or I guess I'm more curious about like the technology and the sort of the feature set side that teams need.

Thanks, Tom. I'll take that one. So it's a little bit of all of the above. So one is if you track our press releases, we have been winning across the board, not any one specific company. So legacy players, independents, and the highest producing teams, we are disproportionately winning. So a couple of fun stats. Real Trends published an article in the last couple of weeks that said, of the mega team category, I think there was like 500 and some teams with something like 28%. Again, total population count, we have somewhere about 4% of all the agents that are members of an AR. So we disproportionately -- I would say we are the home of the super team. And it comes from many things that have been very intentional. So I had it as one of my slides, eXp University is a value stack that we really designed to support these teams. So for example, FastCAP at other companies or other coaching companies could be as much as $8,000, $9,000 per person. So take a team of 50, which is on the higher side of the team scale that we have, and they onboard, call it, 10, 20, 30 new agents per year. By putting them through our program, we're legitimately offsetting tens of thousands of dollars into their P&L and also giving them leverage. So you asked about technology, but it's also about human capital, right? So the tools that we're providing to them have become the onboarding process before their folks start to jump in. And whether it's technology that we're building internally, a lot of it being even personally led by Glenn with the Vibe coding teams, but also the enterprise agreements we've been able to strike because of our size and scale. So…

Thanks, Tom. We had another question from our analyst, Stephen Sheldon at William Blair, who e-mailed me this question and asked, a question for Jesse. In recent quarters, you've talked about leveraging automation to reduce the cost of processing transactions. Can you provide an update on the progress you've made there and where you think the biggest opportunities still sit going forward?

Yes. And I think it's a similar talk track to Tom's question, but I can dig in a little bit more just on the specific -- the processing costs of a transaction. We still think we have runway there. We are implementing tools like Doc AI, which is document review and really streamlines what you can pull from contracts and automates what was previously very manual activity. There's many examples like that in the transactions process. We published our unit economic costs in the 10-Q. I think it was $620, $621 maybe in Q2, and it's down $523 in Q3 here. That's fully baked. There's direct and indirect costs that go into that. And the direct cost is where you get a lot of the -- that's like where the juice is worth the squeeze, right, because there's so much volume going through. And that's where AI also offers the most opportunity. And we feel pretty confident that we're just scratching the surface there. We really began heavily investing in this late Q4, early Q1, and we got a lot of questions on this, again, to my answer to Tom earlier on how much we were loading up the unit economic costs. But now you see the fruits of our labor here in Q3, pulling out really about a $7 million run rate just from Q2 to Q3. We expect to -- or we want to drive further unit economic efficiencies there. More to come in 2026.

Great. All right. Thanks, Jesse. In terms of the audience, we do have one question from the audience. The question is, eXp just won best use of AI by a brokerage. So looking for examples on what eXp has done to help agents remove drag from redundant tasks with AI.

Well, I'll take that one because I'm kind of the AI guy on stage here. But there's a lot of stuff. So 2020, I'll just give you an example. In 2020, I had found a company that supposedly was using AI to do document management. We ended up leaving and building in-house, and then we've since -- using some of the newest models that have been frontier models. We now have a platform that does a lot of the more traditional transaction management type of activities. So it can do early review of contracts. It can do early review of documents that might be missing. It can be looking for things like signatures or other things. And that means that the agent touches it before it goes back in front of a real person when there are things that are caught early in the process. It's certainly a V1 for us. I think it's rolled out to all 50 states. But that's something we worked on for a better part of 5 years. And we think it's part of sort of this full back-office automation layer that we want to build out over time because it's a pretty redundant process. And there is a lot of copy paste going on between different parts of the platform. And so the more you have those automated things handled through either AI. And in reality, AI is a pretty limited aspect of what we do. AI is really the tooling that we use to build a lot of stuff where we've built -- and I'll take credit for in this particular case, but I went over worked at Success and said, "Hey, we really need a personal development social network." There isn't one that exists out there. And I've looked over the years…

Yes, absolutely. We've been similar story to Glenn. And when a lot of these new models have dropped, it's allowed us to scale the AI tools that we were building even quicker. And so I mean, we've delivered something as easy or as simple as a website, right? So we changed all of our country websites to be in-house. That took on the next step as AI got better and we got better at using it to then delivering personalized and customizable agent microsite. So every single agent in international gets their own website with their own property search for their market. And then as we got better, it took on another life, and that's when we, just recently, at eXpCon rolled out Live, which is our public-facing portal. It's got all the listings of all the agents at eXp around the world with WhatsApp integration and a ton of other amazing tools, shareable listings and a ton coming up on that side. And so we've integrated that into every single aspect of the business. And now we're looking at a lot of the SaaS platforms that we did use and sometimes could, to a degree, even cause friction. We can now in-house it and create an ecosystem where all of the tools that our agents are using communicate with one another. And so whether that's a transaction management tool and an onboarding tool guide, every aspect of communication that an agent has either with our systems or with us can now all live in one ecosystem that speaks to one another and removes a lot of those barriers or frictions and creates a more streamlined process for agents. And I think that's also in part why we've seen such a big uptick in momentum and growth on international. Agents are now getting something with us that they just truly cannot get anywhere else outside of just that business model and platform and our scale and international connectivity. We're constantly rolling things out and excited to continue to share more updates. I think you'll see more on our side as well.

All right. Thanks, Glenn, and thanks, Felix. Thank you, everyone, for joining. As always, please stay connected by visiting expworldholdings.com for the latest updates on eXp news, results and events. Additionally, you'll find a recording of this call and our latest investor presentation on the Investors section of the site. This concludes the eXp World Holdings Third Quarter 2025 Earnings Fireside chat. Thank you.