Despite headwinds of the COVID-19 pandemic that put a sizable early-quarter dent in home sales, EXp World Holdings reported its most profitable quarter in company history thanks to increased transactions and significant adoption of its virtual world platform VirBELA.
The parent company of the virtual cloud real estate brokerage posted a net income of $8.3 million in the second quarter of 2020, the company’s third-straight profitable quarter.
“Even in these uncertain times, eXp Realty continued to deliver on its value proposition to agents, brokers and consumers and report record financial results,” Glenn Sanford, the CEO, chairman and founder of eXp World Holdings, said in a statement. “We achieved the most profitable quarter in the company’s more than 10-year history with a positive net income for the third quarter in a row.”
“Due to the performance of our agents and the power of our cloud-based brokerage model, eXp Realty achieved exceptional results with strong growth in all areas, despite initial impacts on the housing market from business restrictions related to COVID-19,” Sanford added. “EXp Realty always has pursued the minimum footprint required to operate and was able to more easily reduce expenses due to the pandemic, something that traditional brick-and-mortar brokerages and franchises were unable to realize.”
The company’s revenue continued to rise, albeit at a lower annual pace than previous quarters. Revenue was up 33 percent year over year to $354 million, which was driven in part by the company’s increased agent count and transactions.
Agent count reached 31,091 — the company added agents at the fastest rate in its history in the second quarter, according to Sanford — which was a year-over-year increase of 54 percent.
Transactions increased 22 percent year over year to 43,653 in the second quarter, while sales volume increased 26 percent to $13 billion.
VirBELA, the virtual world platform owned by eXp World Holdings and on which it operates it brokerage business, saw a “substantial increase in use and adoption,” according to the company. That increased usage spiked due to the platform’s effectiveness in supporting remote working, learning and virtual events at a time of social distancing, the company said.
“VirBELA expanded quickly during the quarter to keep up with demand as companies look to the future and how they will operate given all the uncertainties around physical office set-ups or how to hold events,” Sanford said. “We are engaged with hundreds of new and prospective clients, and VirBELA is positioned to substantially benefit from the global shift to remote work and events.”
VirBELA posted a 260 perent year-over-year increase in revenue in the second quarter of 2020. The company is expecting increased opportunities for the platform in the second half of the year.
“At VirBELA, we see significant growth opportunities ahead as remote work, distance learning and virtual events become the norm during this time of physical distancing,” Jeff Whiteside, eXp World Holdings’ CFO and chief collaboration officer, said in a statement.
The pandemic did have an impact on eXp Realty’s business in the early days, when the company was forced to lay off roughly 15 percent of its staff in early April.
The company is expecting revenue to continue to grow annually in the third and fourth quarters of 2020, due to anticipated growth in transactions and commission revenue.
EXp Realty also plans to focus on international growth, with plans to launch brokerage operations in five new countries in the second half of the year. The company has previously expanded to Canada, the U.K. and Australia.
EXp is also planning to increase its footprint in the commercial real estate sector.
“As we look toward the second half of 2020, we anticipate the presence and influence of COVID-19 to linger, but eXp World Holdings’ businesses are uniquely positioned to adapt and thrive,” Whiteside said “Combine agent excellence that delivers increased sales volume and attracts top-producing agents with the advantages of our cloud-based brokerage model and it is a cycle of success.”
“We expect that the eXp Realty business and our agents will continue to adjust to ongoing economic conditions in the housing market,” Whiteside added. “We also plan to formally announce our expansion into new international markets as well as a strategic initiative in commercial real estate.”
eXp Realty’s strategic focus on international growth will intensify, with plans to launch operations in five new countries in the second half of 2020. The company anticipates that international markets will become a material contributor to growth in the next twelve months.