AGNT, Inc. (AGNT) Q1 2024 Earnings Call Transcript

Good afternoon, and welcome to eXp World Holdings' First Quarter 2024 Earnings Fireside Chat via live stream and our metaverse on the web, Frame. 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 Pareja, CEO of eXp Realty; followed by a review of the first quarter 2024 financial highlights presented by Kent Cheng, 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 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 recent filed annual report on Form 10-K and quarterly reports on Form 10-Q, for a description 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 into a specific screen, you can click on that screen and then click zoom in. If that 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. If 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 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. The screen will remain up and on the right-hand side of this page 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 want to just review our business strategy and provide an update on our structure. Our strategy, as per 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 VirBELA 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, including 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 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, increase support for agents during the market downturn helped drive a higher Net Promoter Score, which resulted in a 3 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 and 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 highlighted in a separate press release, as 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'll 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 Forsythe joined our team as our Chief Marketing Officer. Earlier in the month, we actually named Leo Pareja 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 is truly an innovative and well-recognized leader in the industry. He's iterated and improved on the agent value proposition since joining eXp 2 years ago. I think he'll continue to add value to our agents, strengthening our competitive advantage and driving 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?

Thanks, Glenn. And thanks, everyone, for joining us today. While this isn't my first quarterly earnings call, it's my first as the CEO of eXp Realty. I'm excited to be here and to discuss the growth potential this year and in the coming years. We've been engaged in some exciting initiatives, and I’ve been fortunate to be part of that. We’re beginning to see positive results from our efforts throughout the business. To start, let's look at the industry update. Home sales transactions in the U.S. declined nearly 3%. However, eXp Realty saw a 2% increase. As we continue to outperform the industry, we are growing our market share, which increased nearly 5% to 4.4% of all home sales transactions in the United States. This is due to the dedication of our agents and teams during one of the most challenging markets many of us have faced in our careers. Now, regarding our agents, as Glenn mentioned, NPS is a key indicator for our future growth, reflecting agent satisfaction with eXp. The agent NPS helps our management team identify areas for improvement and where to allocate resources. Last year, we committed to providing vetted, high-quality opportunities to agents, expanding personal and professional services like SUCCESS, revenue share equity opportunities, and affiliate agreements, streamlining operational support, and enhancing our technology. We fulfilled these commitments in 2023, and we believe this is reflected in the increased agent NPS scores this year. In particular, agents have expressed their satisfaction with our eXpert Care Desk, where they can quickly resolve issues with a single contact number available 24/7 globally. They have also conveyed their approval of our transition from VirBELA to exp.world or Frame, as they appreciate Frame's web-based accessibility, making it easier to use wherever they are working. The transaction processes have improved as well, with 87% of our agents rating the process a 9 or 10 on a scale of 1 to 10. We're also introducing...

Did Leo cut out? Yes. So one thing to note is, today, we actually announced our eXp REVenue Share 2.0 program. You may have seen the press release that went out earlier today. Obviously, this last year, we paid out more than $230 million in a combination of revenue share and equity benefits to our agents and brokers. With the new model, and just anecdotally, our agents are ecstatic about our REVenue Share model 2.0. We recognize that we have competition in the industry. And since we really created this new rev share model, we redesigned it to give agents the best rev share opportunity that exists in the market today. We also have a Fast Start program that's going to kick in in July, which we think is also going to be super exciting, as we talked about in the press release. Leo, let me know if you've arrived back, and I can certainly turn it back over to you. Let's go on to the next slide, and I'll keep things moving here.

Sorry, I just got disconnected.

Well, then I will wait for you to take over Slide 12 here.

Slide 12, sorry about that. Perfect. I'm very proud of the eXp...

I think we're losing Leo again.

I believe his Internet connection may be having problems. Just to highlight, we have several agents who have made it onto our top producer list for 2023. Interestingly, if we consider our top 200 to 250 agents as a single brokerage, we would rank among the top five or six brokerages in the entire industry. It's exciting to see so many achievements. Recently, I received the Bravo Leadership Award from DSU, and eXp secured the number one position in transactions on the 2024 RISMedia Power Broker Report. It's crucial to acknowledge that these rankings showcase our ongoing commitment to our agents, which explains why we have received such awards and recognition. Now, let's proceed to the next slide. We've often discussed the role of AI in our business. We are nearing the launch of what we are calling Luna 2.0. This initiative is led by our innovation team, headed by Seth Siegler, our Chief Innovation Officer. We are set to introduce 28 distinct AI agents, each equipped with extensive knowledge on various topics and regions, capable of multiple languages and other impressive features. Like Luna, we intend to develop more tailored generative AI personal assistants that can respond to inquiries from eXp agents and the broader industry. Regarding our document creation and review process, we are making improvements such as implementing technology to enhance operational flexibility. For instance, Patrick O'Neill, our Chief Operating Officer, refers to our approach as the following the sun strategy, which aims to leverage both AI and personnel to enable global operations in support of agents and boost productivity. AI presents a significant long-term opportunity for us. We are currently undertaking various projects and collaborating with multiple vendors to focus heavily on the AI aspect.

Are you back? I hope so, Slide 14. We're also excited about our progress against our $20 million profit improvement plan. We made good progress in implementing several initiatives in Q1 to drive our profit and cost savings. On an annualized basis, these initiatives will drive $27.3 million in incremental profit and cost savings per year. Since many of these initiatives were implemented in the first quarter, they are not reflected in our first quarter financials and may have even been booked as some costs, like severance, towards them, which Kent will discuss in a moment. With three quarters left in 2024, we expect to realize $6.8 million per quarter, or $20.4 million this year. Turning to the next slide. Lastly, I want to provide an update on the real estate market, which is impacted by the market downturn caused by higher interest rates and also by antitrust lawsuits aimed at agent commissions. Understandably, our agents have had lots of questions about what this means for them and their clients. We've been providing support and education to agents through regional rallies, where we can be there to answer questions about antitrust lawsuits but also engage, educate and celebrate their profession. In April, we hosted impactful rallies in 20 locations. We plan to host more throughout the year. We've also created a bio representation toolkit, which includes a suite of tools to help eXp agents enhance and empower their value proposition for clients during this time. With that, I'll turn the call over to Kent, who will walk you through the financials, and we'll open it up for questions. Thank you.

Thank you, Leo. As we review our performance for the first quarter of 2024, I'm pleased to highlight several key metrics that underscore our progress and strategic initiatives. Let's start with our agent Net Promoter Score, NPS. This quarter, we achieved an NPS of 73, which is a 3 point improvement compared to the first quarter of last year. This increase is a direct result of our investment in operational support for our agent and the enhancement to our technology platform that Glenn and Leo discussed earlier. Moving on to our agent network, we saw a slight decrease of 2% in our agent count year-over-year. This reflects both the challenged market conditions and our strategic decision to offboard a significant number of unproductive agents in the U.S. during the fourth quarter of last year and the first quarter of this year. This move aligns with our focus on enhancing overall productivity and efficiency. In terms of real estate transactions, our real estate sales transaction units grew by 5% year-over-year. This growth is not only a testament to our team's hard work but also indicates that we are outperforming the industry and continue to gain market share in the U.S. While our cost per transaction experienced a slight increase year-over-year, they remain among the most competitive in the industry. We anticipate that real estate transaction costs will decrease as we leverage technology more effectively and move through the typical seasonal variation in 2024. Now let me discuss our financial objectives. I'm happy to report that our revenue for the first quarter was $943 million, an 11% increase year-over-year. On the adjusted EBITDA front, we generated $11 million in very challenging market conditions. The first quarter adjusted EBITDA was lower than the $14.6 million from the prior year's first quarter due to increased SG&A, which I will explain next. We have also enhanced the transparency of our financial reporting by breaking out our operating expenses to include technology and development costs, reaffirming our commitment to being a technology-driven company at heart. General and administrative expenses were $63 million, up 15% over the first quarter of 2023, primarily due to increased transaction volume, an effort to improve our NPS, coupled with higher severance and legal expenses. This quarter, we recorded a provision of $60 million for the antitrust litigation contingency. It's important to note that this $60 million contingency is provisional and subject to change as the cases evolve. The net of tax impact on earnings of the provision is $11.4 million. Our GAAP net loss for this quarter was $15.6 million, which also includes a $1.8 million loss from the discontinued operation of the VirBELA segment. Excluding the antitrust contingency provision and the discontinued operation, our adjusted loss was $2.4 million, with an adjusted loss per diluted share of $0.02. In terms of liquidity, our adjusted operating cash flow was $29.4 million. We have continued our commitment to shareholder return by repurchasing $33 million of shares during the quarter. The number of shares we repurchased completely offset the share issue via our Agent Equity Program and the Agent Grow Incentive Program in the first quarter. In the next slide, I will provide more detail about the driver behind our revenue increase. This chart shows the driver behind the increase of the revenue from the first quarter of 2023 to the first quarter of 2024. In Q1 2023, our revenue stood at $849 million, as shown by the bar on the left. For the same period in 2024, revenue increased to $943 million, as indicated by the bar on the right, making a year-over-year increase of $95 million or 11%. This increase was primarily fueled by significant gains in our North American Realty segment, which includes the U.S. and Canada, contributing an additional $90 million in revenue growth. The International Realty segment also saw a rise, contributing a $5 million revenue increase. Let's dive deeper into the North American Realty segment. A 2% decline in our agent base negatively impacted our revenue by approximately $8 million. U.S. home sales in the first quarter of 2024 declined by 2.7% year-over-year, which pressured our agent production. We estimated that the decrease in the overall real estate market reduced our revenue by $11 million. However, the market declines were more than offset by gains from several areas of our business. Relative to the performance of the real estate market, an increase in agent productivity over the previous year added $48 million in revenue. Higher home sale prices contributed incremental revenue of $46 million. Additionally, our strategic focus on expanding our lease, rental, and other ancillary services brought an extra $50 million top-line growth. On the next slide, I will discuss financials for each segment in more detail. This quarter, we streamlined our reporting by reducing the number of segments from four to three. This change follows the discontinuation of the VirBELA operation as we shift our focus entirely to the web-based metaverse, Frame, which is now included in Other Affiliated Services. The North America Realty segment continued to be the primary driver of both revenue and profit for the company. We reported an 11% increase in revenue, as I discussed previously. However, our EBITDA saw a 16% decline to $80 million. This was largely due to our investment in personnel to support future growth and improve NPS, along with an increase in legal and severance expenses, which were partially offset by higher revenue net of agent commissions and other agent-related costs. The International Realty revenue was $60 million, an increase of 45%. Adjusted EBITDA loss was $3.4 million, which is a 9% improvement from the prior year. Other Affiliated Services, including Frame and SUCCESS, contributed modest revenue and an adjusted EBITDA loss. This slide summarizes our Q1 highlights, which I've discussed in the previous slides. I'm happy to report that we are off to a great start in 2024. We are well-positioned to capitalize on upcoming market growth opportunities. With that overview, I'd like to turn the presentation back to Denise, who will facilitate the Q&A section. Thank you.

Great. Thanks, Kent. I'll kick off a question for everyone on the team before we open the call up to our covering analysts. First, Glenn, this one is for you. You announced some enhancements to the eXp rev share model earlier today, and I think you took us through some of the highlights. I suppose the next question is, what made you decide to make these updates now?

Yes. So there were a few things that went into this. In 2019, we announced our sustainable revenue share platform, which was our commitment to paying out 50% of company dollar. It was based on the model that we originally rolled out in 2009, where if you calculate the numbers, we expected, we'll call it, more breakage in the system. But we ended up overheating the rev share system to the point where we would fundamentally not be a sustainable company. So we introduced in 2019, where we are committed to paying out 50% of company dollar. Embedded in that, we use 50% of the company dollar to pay the bills and run the company and all of that. The second part of it was because of the way it was calculated. It was a little bit unclear for many of our agents how the numbers rolled out because it was using what we referred to as a buffering system. We received a lot of feedback that our agents wanted something easier to calculate. The other piece was we definitely got feedback around agents who, let's say, are mid-level attractors, who had built reasonably large organizations in eXp. They were key to the growth of the company but couldn't open more of the levels. We were seeing some attrition from agents leaving to our competitors, which was this group that was in the middle. They weren't huge agent attractors but were very involved in supporting the growth. So the program, as it's laid out, is that starting in the U.S. and Canada on May 9, levels 1 through 3 are opened up for all agents in the company. Levels 4, 5, and 6 will open with 5, 10, and 15 agents that they personally brought in. We still left level 7 at the same, which is for those who are broker-owner personas, the sales manager personas. What we have seen is that feedback today has been very positive, with many people saying, 'This is exactly what we needed to get excited about the next evolution of eXp.' I'm pretty excited about where we're going with this. We'll be rolling this out globally, but we launched it first in the U.S. and Canada.

Great. Makes sense. The next question is for Leo. I have a couple of questions for you about agent growth trends. First, just a near-term question about the first quarter; was it continued to be impacted by the cleanup of nonproductive agents that you undertook last quarter? And more long-term, what are you focused on in terms of agent growth?

Thanks, Denise. Yes, there are two drivers impacting agent count. First, some agents have left the industry due to the tougher selling environment we've experienced over the last 18 months. Second, the cost of nonproductive agents, such as technology support and other things, prompted us to purposely offboard a large number in the fourth quarter. Yes, that effort did extend into the first quarter. We're really focused on building our agent base with the highest quality agents in the industry. We have been very encouraged by the number of teams that have joined eXp in 2023 and again in Q1 of 2024, along with the increase in our agent productivity. We invest quite a bit in technology to support our agents, which is offset a bit by the agent fees. For example, a subscription to kvCORE, which would cost an individual agent hundreds of dollars per month to pay directly, is included in our $85 per month agent fee. We believe the fee deflects nonproductive agents, who can be counted at brokerages that don't charge fees. Clearly, our agent value proposition resonates with productive agents, and our focus on these agents will put us in an optimal position to capture growth as the market turns.

Got it. And now the last one for Kent, can you discuss the components of the $20 million profit improvement plan?

Yes, happy to do that. There are a few adjustments we initiated in the first quarter regarding the risk management fee, Agent Equity Program discount, and other profit enhancement opportunities. Those initiatives have helped us on the profit-generating side. We estimate they will contribute about $30.3 million on an annualized basis. On the cost savings side, we took action in the first quarter to reduce personnel costs, primarily through headcount reduction, estimating about $10.9 million in the real estate business and $3 million in the VirBELA business on an annualized basis. The combination of these two actions will generate approximately $13.9 million in annualized cost savings. Overall, you add them together, we get about $27 million in total profit improvement.

Got it, okay. Now I'll open up the call to our analysts to ask questions. I'll start with Jonathan Bass, who's sitting in for John Campbell from Stephens.

I wanted to start off on agent count growth. It sounds like the offboarding of nonproducing agents continued into Q1. Is that expected to flow into Q2 and potentially beyond? Looking forward on agent count growth, could you break it down between North America as well as international growth and discuss what you're expecting for the remainder of the year?

Leo, do you want to take that? Or...

I was going to ask you the same thing.

Okay, sure. Yes, so going into Q2, obviously, we rolled out what we talked about, REV Share 2.0. We believe that will help on the growth side. On the offboarding side, it's still a tough market. Many of the agents we were offboarding, those who voluntarily offboarded, many were behind on their fees, their MLS dues, and were not selling homes. So there was some natural attrition. What I found is anecdotal, but I believe that even NAR quit publishing their member numbers a couple of months ago because I think their numbers are dwindling at the moment. I think there's some industry attrition going on right now that affects us. We're still seeing our productive agents sticking with us for the most part, which is why you're seeing volumes and transaction counts pick up.

Yes. People need to remember that if you're not current with your MLS and association dues, once you get turned off, we have to offboard you. The churn that's endemic to this market cycle will be present. However, I will say I'm having very promising conversations with small- and mid-sized independent firms, as the changing model rules from the NAR settlement will likely see more activity from independents joining us in larger numbers.

Jonathan, did you have another follow-on to that question?

Yes, if I could add one more, maybe switching topics. Can you elaborate on how eXp and your agents are preparing for the mandated bio representation agreement rule change expected this summer? What discussions are you having with agents, and what preparations are you making?

Yes, I'll jump into that. We're being extremely proactive. I want to say we're probably the leading scaled company very proactive. A couple of weeks ago, we rolled out a one-page bio representation agreement that is only binding for one property and essentially one day. The key point I keep reminding agents is that nobody knows what's going to happen. The final settlement needs to be completely fleshed out, and the DOJ could opine. Operationalizing this change is critical, so we’re providing our agents with tactical scripts, tools, and bio presentations. We’ve even gotten it down to a slogan: treat your buyers like you treat your sellers. We're encouraging them to prepare now. We’ve given them the forms and tools to help them transition and addressed concerns with proper roleplay. As the largest scale company by transaction count, according to RealTrends, we did 355,000 sides last year, which was 40% more than #2. We have a phenomenal collaborative feedback loop. As our agents engage with consumers, we'll support their change.

And we'll move on. Tom White from D.A. Davidson.

A couple, if I could. Glenn, Leo, could you share directional thoughts on transaction growth in the second quarter? There have been other companies in this space highlighting the recent uptick in mortgage rates. Can you provide some directional color on that? Then maybe for Kent, operating expenses, specifically G&A plus that new tech and dev line, is that the new level we should expect in absolute dollars over the next few quarters? Is that a good way to model what we saw in Q1?

I could take the directional one. Quarter-over-quarter, it's looking like a flat year transactionally for the country. I would venture to say that what we saw in Q1 is quite representative of Q2. We're focused on productive agents, and in a market like this, thriving looks like surviving. Sometimes this is about market expansion. Once rates normalize and we return to more typical transactional volume, we'll see meaningful benefits.

Yes, to add on the unit side, right, Tom. Typically, Q1 is the slowest season. When moving into Q2, with spring, the revenue will pick up in the second quarter due to seasonality.

Great. Maybe one final question, if I could squeeze it in. Can you update us on your thoughts about a potential settlement of the NAR lawsuit? Some of your brokerages have settled recently. I noticed litigation contingency pop up on the P&L. Anything you can share there would be helpful?

Yes. I've spent a fair bit of time, and I know Leo has as well, discussing what's going on in the industry from a settlement or litigation perspective. We're still fairly early on in the suits that we are named, about 10 suits in the U.S. We're trying to figure out if there's a consolidation of that. We are maybe the last of the large brokerages that haven't settled and are not currently in a settlement discussion at this moment. We're open to conversations, of course. We've had some in the past. But right now, we're observing and see how things play out. There have been brokerages like Douglas Elliman and HomeServices that were on the hook, so to speak, for the previous judgment, and they were the last in there. So it's still early, and we expect a couple more years before trials begin. We're looking at things on a day-by-day basis. If an opportunity to settle for a number makes sense arises, we will take that opportunity. If not, we believe we have very good arguments on our side if we go the distance.

Tom, you also asked about SG&A, right? Barring any unforeseen items or one-time issues, you should consider our Q1 SG&A a general direction for what we will see in the future.

All right, I’ll move on. Moving on to Matt Filek from William Blair.

You have Matt on and Sheldon. To start here, what could the recent changes to the revenue share model mean to company financials, particularly gross margins?

Short answer, no change.

Yes, that's the short answer. We're paying out the same numbers; we're just doing it slightly differently, to create a model our agents feel more aligned with their interests over the long haul.

Got it. Since Leo is taking over as the CEO of eXp Realty, congratulations on that opportunity, Leo. Glenn, can you provide more detail on how you plan to allocate your time? It sounds like macro-level opportunities will be a core focus. Any additional color on that?

Yes, when I look at macro, obviously, we've got a few subsidiaries like SUCCESS Enterprises and FrameVR.io, as well as other businesses in which we've made strategic investments. I'm focusing on these opportunities. There are some areas I think are exciting that I can't discuss yet, as they are nonpublic. There are opportunities for leveraging eXp Realty's scale and pursuing potentially profitable ventures outside of the core of realty, which could align well with what we’re doing.

And then last, Soham Bhonsle at BTIG.

Maybe first one for you, Leo. Last fall, you introduced the Boost and Accelerate program. I'm curious how those have fared so far. Then if you could expand on what's incremental here with the Fast Start and REV Share 2.0 program, that would be great.

Yes, it has definitely opened lines of communication. Tomorrow, we’re filing a press release about a 500-person brokerage that joined us here in Miami—20-year independents whose talk track has been, 'I've been grinding at it for years, and this upcoming climate is making me rethink whether I want the liability.' We provide a platform that allows these real estate entrepreneurs to grow according to their needs. They hand over their backend and liabilities to us, and can focus on pouring effort into their business. With Boost, we now have a powerful conversation starter, which is making it easier to negotiate with companies of all sizes. REV Share 2.0 will further attract those good at recruiting, utilizing great input from agents in the field who are competing for talent.

Got it. Just one more thing on productivity. It looks like transactions are up, but based on the home sales transactions, it appears to be up 2%, while you had about 26% growth in others. Can we parse out productivity within the core business of selling homes?

Most of the transaction is general in nature. In general, I would say the other transactions are there to support all the transactions. Overall, our home sale transaction increased 5% this quarter.

I think Kent's mic has kind of messed up.

To answer your question, our overall home sale transaction increased 5%, and for productivity, we don't separate teams to support real estate sales transactions. Therefore, we assess productivity based on overall real estate-related transactions.

Got it. And Kent, just on gross margin, any help there? I think you said it would be similar to last quarter and 2023. Any updated thoughts?

Yes, similar. We generally operate around 8.3% at that level.

For the year?

For the year, we avoid forecasting. You can see gross margin seasonality. Once into the year, agents start to cap. You typically see gross margin low during summer and then recapture it by Q4.

All right. Thank you, everyone. We answered all the questions asked on Slido for the most part. I want to thank everyone for joining us on this quarterly call. As always, you can stay connected with us through our website for the latest updates on eXp news, results, and events. Additionally, you'll find a recording of this call in our latest investor presentation on the Investors section of the site. This concludes the eXp World Holdings First Quarter 2024 Earnings Fireside Chat.

Thank you.

Thanks, everyone.