AGNT, Inc. (AGNT) Q2 2024 Earnings Call Transcript

Good afternoon, and welcome to eXp World Holdings' Second 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 second 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 in advance. 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 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 reply 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, welcome to our Metaverse on the web. To zoom into 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 on the bottom right to link with tech support. 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 in the event EXPI. From there, you can submit a question or vote up an existing question by giving a thumbs up. If you'd also like another question asked. This screen will remain up on the right-hand side of the stage throughout our presentation. Now I'll turn the fireside chat over to our speakers before opening the call to questions. Glenn, you may begin.

Thanks, Denise, and thanks to everyone for joining our Q2 earnings call. We're focused on enhancing the value we provide to agents, which is a core topic for us at eXp. Our platform emphasizes personal development and supports agents in selling more properties. Success Magazine contributes to this personal development aspect. Additionally, we have initiatives like Frame in the Metaverse, all crafted to scale our brokerage globally. In the next slide, you'll see that our agent Net Promoter Score improved from 72 to 76 in Q2, reflecting our investments in services and faster payments. Our global referral network is starting to form, and I’m now more involved in our international efforts, given recent changes. We're dedicated to enhancing the agent value proposition, knowing that NPS is a key indicator of our future growth and retention, which affects the company's long-term financial health. Real estate sales transactions rose by 1%, and revenue grew by 5%, supported by a 6% increase in agent productivity, a notable achievement in a tough market. We've seen productivity gains by equipping our highly productive agents with more tools and incentives. Leo will discuss our REVenue Share 2.0 program, which aims to attract productive agents and improve their outcomes in their first year. Our international revenues surged by 69% year-over-year, driven by strong performance in sales volume and productivity. While our overall agent count remained stable, it’s because we’re focusing on agents with two or more years of experience, which has positively altered our international strategy. Our losses are down compared to previous periods, but we view it as a significant opportunity, as there are potentially over 20 million real estate professionals in our target markets. If we achieve a similar presence as in the U.S., we could see nearly 1 million agents on the eXp platform worldwide. We’re enthusiastic about our long-term vision for the next decade. Recently, I've been working with the international team to instill a startup culture and collaborate with various leaders in the region. Our commitment to international growth is evident, with my trips to Lisbon for EXPCON and meetings with our international teams. We also introduced Elevate coaching, complementing our EXP University and mentor programs. Moreover, our global agent referral platform allows us to connect consumers looking to buy or sell real estate across international markets, especially in the luxury sector where buyers seek opportunities in multiple countries. There's a lot of exciting activity happening in this space. Now, I'll hand it over to Leo for some highlights from North America in the second quarter. Leo?

Thanks, Glenn, and thanks for everyone for joining us today. I'll start off with our Q2 performance compared to the industry. Last week, we saw June home existing sales at a low point for 2024, down more than 5% year-over-year, month-over-month. This downward pressure for Q2 home sale transactions in the U.S. which were down nearly 3.5% year-over-year. Despite the industry being down nearly 3.5% eXp Realty is only down 3%. Year-to-date, the industry is down slightly more than 3% and over last year, while eXp is basically flat by being down less than 1%. I truly believe that our market share gains are a reflection of the quality of agents and talent we're attracting to our company. Kendall Bonner joined eXp Realty as a VP of Industry Relations, who has recently been named 2024 Housing Woman of Influence, a Tonami TV host, and real estate expert has joined eXp during that quarter. And 44% of our agents made the list for the 2024 Real Trends and – thousand awards which has the 500 top agents and 500 top teams in the U.S. by transaction and volume count. We recognize that in order to maintain the highest quality agent base in the industry, we constantly have to iterate on our agent value proposition to remain the most agent-centric brokerage on the planet. During the last earnings call, we announced REVenue Share 2.0 in the first 60 days of the program. We paid out nearly $7 million in real-time revshare. During Q2, we also launched our global referral program, which extends the reach of all of our agents to our additional 22 international markets, so agents can find partners across the globe and across the ocean to expand their business. And more recently, we launched a Fast Start attraction bonus program on July 1, which offers direct upline sponsorship of a 50% payout on the revenue share pool on all qualifying Level 1 transactions for an agent joining their first year at eXp. Some of the initiatives we started last year have really started to gain traction. Some of the ones I'm most excited about, I'll share about eXp exclusives, which went live late last year has started to gain traction and really add a value proposition to our agents as we navigate this low inventory environment in this changing landscape. Express offers, which we rebooted and with a partnership with Opendoor led to over 2,300 property submissions to Opendoor alone in Q2. eXp luxury, our platform that provides agents with tools and resources to increase their production, increased the number of agents by over 130% year-over-year. We're seeing higher adoption rates for training and education, which increased 127% in attendance year-to-date for 2024 compared to 2023 for the same time period. Paying out our real-time payment program we launched in order to pay folks faster, which is particularly important in these times where agents are closing fewer transactions, is taking off like wildfire. We're happy to see our agents take advantage of the kind of programs we've created in order to help them lead more productive lives and make their businesses run smoother. We've discussed our significant opportunities to see an agent improvement productivity with integrating AI technologies across our entire enterprise. We have an enterprise license with OpenAI that we're leveraging with ChatGPT to increase our staff productivity. Our staff had more than 1 million messages in Q2, up 108% from Q1 of this year by leveraging AI to become more productive internally. The Task Center has also aided the completion of over 710,000 tasks of agents, invoices, and transaction documents across 5 different operational teams and 15 different role types year-to-date. We continue to leverage HubSpot technology to service agents, and we've closed over 1 million agent tickets worldwide in Q2. And most recently, we replaced Rebel with the web-based frame technology that we're all using right now to make it faster and easy for our staff and agents to collaborate online and has been wildly popular with more than 1.1 million visits in the first half of 2024. We're really excited to continue the integration of cutting-edge technology solutions on our platform, the long-term opportunity AI could represent as we continue to seek operational efficiencies, which I'll discuss on the next slide. This quarter, we reduced our SG&A expenses in North American Realty by $4 million over last year. At the same time, we reduced our cost per transaction in North America Realty by nearly 10% year-over-year and improved our operating efficiencies, increasing North American adjusted EBITDA by 13%. For an update on the real estate market, we have been providing as much education and tools through our regional rallies, virtual meetings, and as many places as we can communicate with our agents. Our buyer representation toolkit, which includes the buyer-broker representation agreement that the CFA recently recognized, is much simpler, clearer, and pro-consumer than any other agreement that's been created recently. It is something we've open-sourced so all agents in the industry have access to what's being considered the best-in-class documents in order to make this transition as smooth as possible, which will go into effect on August 17. Many people have asked me how this will impact the number of agents in the market and in the process. First, buyers have the option to not have an agent represent them just like they did in the past, but most have chosen to hire an agent because the process is very time-consuming and complicated than most people understand prior to engaging with an agent. In my opinion, buyers will still choose representation and we'll continue to need expert guidance throughout their process. After August 17, we'll likely experience an adjustment period, which I've been calling several formats and stages, the 'messy middle' as both agents and consumers adjust to the new rules of engagement. With that, I'll turn the call over to Kent, who will walk you through our financials, and we'll open the call up for questions.

Thank you, Leo. As we review our performance for the second quarter of 2024, I'm pleased to highlight several key metrics that underscore our progress and strategic initiatives thus far with our aged Net Promoter Score or aNPS. This quarter, we achieved an aNPS of 76, which is a 4-point improvement compared to the second quarter of last year. This increase is a direct result of our continued investment in operational support for our agents and the enhancement of our technology platform, the Leo and Glenn discussed earlier. Moving on to our agent network. Our agent income increased 2% sequentially from the first quarter to the second quarter. On a year-over-year basis, our Q2 agent count declined 1%. This reflects both the challenging market condition and our strategic decision to remove a significant number of unproductive agents in the U.S. during the last few quarters. This move is aligned with our focus on enhancing overall productivity and efficiency. Turning to our other operating metrics. Real estate sales transaction units grew 1% year-over-year. This growth is not only a testament to our teams' hard work, but also indicates that we are outperforming the industry and continue to gain market share in the U.S. Realty cost per transaction decreased 8% as we began to leverage the knowledge to eliminate time-consuming manual processes. We believe we are among the most efficient companies in our industry, and we remain focused on reducing our cost per transaction moving forward. Now let me discuss our financial metrics. I'm happy to report that our revenue for the second quarter was $1.295 billion, a 5% increase year-over-year. Our Q2 revenue growth was due to higher real estate sales volume and an increase in agent productivity, which I will detail in my next slide. Second quarter adjusted EBITDA was $32.9 million, up 22% year-over-year driven by higher revenue and lower SG&A expenses relative to the prior year quarter, thanks to solid execution across the company. I'm pleased to report that our $20 million profit improvement plan remains on track. Moving now to our Q2 expenses, general and administrative expenses were $61.2 million, down 6% compared to the second quarter of 2023, primarily due to cost containment initiatives partially offset by increased legal expenses related to the antitrust lawsuits. Our GAAP net income from continuing operations for the quarter was up 4% to $11.8 million year-over-year. In spite of a 44% increase in operating income due to an unfavorable higher tax rate on ongoing operations, including its continued operation, net income would have grown 31% to $12.4 million in 2024 compared to $9.4 million in 2023. Moving on to cash flow and capital allocation. Q2 adjusted operating cash flow was $60.4 million, and we repurchased $48.2 million of shares during the quarter, demonstrating our commitment to shareholder return. On the next slide, I will provide some detail about the driver of our revenue increase for the second quarter. This chart shows the driver behind the increase in revenue from the second quarter of 2023 to the second quarter of 2024. In Q2 2023, our revenue stood at $1.231 billion, as shown by the bar on the left. For the second quarter of 2024, revenue increased to $1.295 billion, as indicated by the bar on the right, marking a year-over-year increase of $64 million or 5%. This increase was primarily fueled by significant gains in our North America Realty segment, which includes the U.S. and Canada, contributing a $55 million revenue growth. The International Realty Segment also saw a rise, contributing an $8 million revenue increase. Let's dive deeper into the North American Realty segment. Our U.S. agent base, excluding referral agent decline, impacted our revenue by approximately $51 million. U.S. home sales in the second quarter 2024 declined 3.4% year-over-year, which pressured our agent production. We estimated the decrease of the overall real estate market reduced our revenue by $37 million. However, these market declines were more than offset by gains from several areas in our business. Relative to the performance of the real estate market, an increase of agent productivity over the prior year added $81 million of revenue. Higher home sale prices contributed incremental revenue of $55 million. Additionally, our strategic focus on expanding our lease, referral, and other ancillary services brought an extra $7 million top-line growth. On the next slide, I will discuss the financials for each segment in more detail for the quarter. The North American Realty segment continued to be the primary driver of both revenue and profit for the company. Segment revenue was $1.275 billion, a 5% increase from the prior year due to increased real transactions and home sales prices despite a challenging residential real estate market. Adjusted EBITDA was $38.5 million, a 30% increase year-over-year due to improved business efficiency and reduced costs. The International Realty segment revenue was $20 million, an increase of 69%, primarily due to increased real estate transactions driven by improved agent production in previously launched markets. Adjusted EBITDA loss was $2.4 million, a 37% improvement from the prior year due to increased revenue and cost reduction initiatives. Other affiliated services, including Frame and Success contributing modest revenue and adjusted EBITDA loss. This slide highlights our strong Q2 performance across key operational and financial metrics, which I have detailed in the previous slides. Looking ahead to the second half of this year, according to the latest NAR existing home sales, June saw a 5.4% decline in existing home sales from May, reaching a seasonally adjusted annual rate of 3.9 million units. Sales also fell 5.4% compared to the same period last year. We anticipate this downward trend in the U.S. existing home sales to persist in the next quarter, barring any significant macroeconomic shifts. The current uncertain real estate market have prompted us to adopt rolling real-time projections to enhance our agility and entrepreneurial approach in business management. We plan to continue to invest in our international market and agent growth initially to boost our production in the U.S. Our gross margin percentage for the second half of the year is expected to be generally consistent with a typical seasonal pattern and last year's performance. In conclusion, I'm happy to report another quarter of solid execution, which gives us well positioned to capitalize on accounting market growth opportunities. We continue to gain share in real estate market terms and recover positively. With that, I'd like to turn the presentation back to Denise who will facilitate the Q&A session. Thank you.

Thanks, Kent. I'll kick off with a question for everyone on the team before we open the call to our covering analysts. First, Glenn, I'll start with you. Where are you spending most of your time? Where are you most focused?

So thanks. So for the last couple of weeks especially, and it's actually something I've been focused more and more time on. I mean actually focused on the international side. We actually had our first international EXPCON in Lisbon, Portugal last month which was well attended from agents, especially in Europe when we had some agents come over from other parts of the world as well and had a lot of good meetings. I know that we ended up bringing over one or two good-sized real estate teams for meetings that Leo and I were part of Felix and others. So that was really positive. And here in the last two weeks, I've actually been working directly with the international team, building a bunch of new systems out to help us grow, and then refreshing the agent value proposition in a number of countries, which I think is being super well received by both our country leaders and our agents on the ground. So pretty exciting to work on that. And so I'm also going to be heading back in September attending a large international MLS meeting actually in Milan, I believe, in October. And then we'll have a number of meetings in different parts of Europe. So that's leading up towards EXPCON. So that's a little bit of what I've been up to. And that's why actually my focus is. Many of you have heard me talk a ton about the future of international. I think we couldn't be more excited about it. And just rolling up my sleeves personally every single day on that has been good for me, but I think also good for the team at large.

All right. Next question for you, Leo. Can you discuss what drove the quarter-to-quarter increase in agent count?

We made a strategic acquisition of Realty Connect, which operates as a limited function referral company. This decision was driven by several factors, including the need to retain agents in an industry facing significant changes. Many agents are considering leaving, so we wanted to have an option to keep their licenses. Realty Connect has an interesting model that engages with agents' databases to support retention. Their productivity per agent is around 0.5, which is higher than many referral companies, thanks to their proprietary CRM that generates high-margin referrals for our active agents. Our goal is to potentially bring these agents back if they decide to return to active production. Moreover, Realty Connect is a brand-agnostic brokerage, attracting referral agents from various businesses. This is a high-margin venture with low operational costs since all transactions are processed through eXp Realty, making it a smart addition to our core business.

All right. Thanks, Leo. And one for you, Kent. Can you discuss the second quarter gross margin and your thoughts on gross margin for the remainder of the year?

Sure. As you know, we are primarily focused on revenue and adjusted EBITDA as key financial measures. But it's worth noting that in the second quarter, we have more agents reaching their cap. We're also investing in our agent and gross profit, including stock-based compensation and revenue share expenses as are under slide 27 in the fireside chat presentation. Excluding these expenses, our non-GAAP gross margin was 12.8% in the second quarter. Year-to-date, the non-GAAP gross margin percentage is 13.3%. Given our current team of highly productive agents, we expect additional agents to reach the cap in the second half. We will continue to invest in agents in the third and fourth quarter. We anticipate gross margin in the second half to follow a typical seasonal pattern and be approximately similar to the back half of 2023.

All right. Thanks, Leo. So now I'll open the call up to our analysts on the left-hand side of the stage. I'll take the first question from Tom at D.A. Davidson & Company. Tom, I think you have a question. You want to go ahead.

Yes, thank you, Denise. I appreciate the opportunity to ask my questions. First, could you provide details regarding the number of agents that joined through Realty Connect? Are they all based in the U.S.? My second question relates to the domestic business. I would like to hear your thoughts on the competitiveness of your value proposition and the attractiveness of the platform compared to smaller companies that have emulated your model in recent years. What do you believe are the primary reasons agents choose eXp over competitors? I also have a brief follow-up question.

Yes. So great question. So the first is the sizing, I think it was roughly 2,900 agents just to answer your first question. And secondly, overall, I think I've talked to on other calls. There's endemic churn that's inherent with the industry. So agnostic of brands, there's a churn component that hits everyone at scale. So the denominator is bigger. Obviously, adding at the top of the funnel has pressured because of there's just kind of a natural attrition that exists, whether agents get completely out of the business or they go to a competitor. So overall, based on the downward pressure at scale, I think we're actually doing great with the teams that we're attracting. And I'm not sure who saw the press release on that team out of Missouri that just joined us, 100 transaction team. They'll probably be our number one agent for 2024. Our number one team in production wise, and this is the type of team that was able to interview and I know they did all of our other competitors. And some with the Metfedic team that joined last week, and we have another announcement coming next week, where tough producers, folks that do this at a very high level, are actually asking very detailed questions about profitability, sustainability, operations and we're continuing to see the highest level of operators, join the company that they feel has longevity, sustainability and it's not a startup. We are in turbulent times in our industry. There are a lot of shifts coming. And I think having a scaled platform that has already gone through all its pivots and terms, makes a big difference. And to Tom to think that it's a slightly cheaper version, is not how most professionals and consumers shop and make decisions agnostic of industry but we continue to see the strongest performers and as well as the stand-alone agents choose our company just because of the total value proposition. And I would say that especially with the changes happening in the industry right now, I think a lot of them and again, I'm just quoting what I'm seeing anecdotally on social media, feel a very strong comfort knowing that we're fully scaled. We're fully operational in all these markets. We have the staff and the brokers and the systems to support their business. Because at the end of the day, the company they're choosing to hang their license with is that platform that allows them to operate their business and I think sustainability and operational excellence is a very important part of that decision tree.

Got it. That makes a lot of sense and is very helpful. On the topic of industry change, I'm currently at the Inman conference in Las Vegas, where I saw Kendall Bonner speak earlier. She was impressive, and it was my first time hearing her. The situation regarding August 17 is understandably a hot topic. Leo, I know you've been closely involved and producing a lot of content about this. Could you provide a high-level overview of the best practices or specific protocols you're encouraging your agents to follow that might differ significantly from what others are doing? One thing that stood out to me today is that it seems like everyone has different terms in their buyer representation agreements, and the paperwork involving exclusive versus non-exclusive terms appears quite messy, as you mentioned. Thank you very much.

Yes, the situation is quite messy, and I've been saying that since March. I highlighted it again during a live session in May to prepare the industry for the changes we're witnessing this week. I attended a conference yesterday and returned home to focus on this discussion in peace. We've committed to eliminating broker commission shares as outlined in Paragraph 19 of the settlement agreement. If sellers wish to offer compensation directed to the buyer's broker, that's perfectly acceptable. I spoke on this topic yesterday, and I'm glad to welcome Kendall to the team as we navigate this transition. This morning, I did an interview with TIME and I'm scheduled for one with CNN next week. A critical change to note is that buyers are now required to sign a buyer broker agreement before touring properties and signing purchase contracts, which makes the touring aspect even more difficult because this isn't an eXp policy but a direct result of the NAR settlement. I stressed clearly at Inman and reiterated in a live session today that the enforceability of these changes falls on the MLSs, which may impose punitive penalties. Agents could face fines of $2,500 or $5,000, along with immediate removal of their listings, and there are indications that some agents may even be suspended. We've been focused on this since the news broke in March, adopting an aggressive educational strategy. While at Inman yesterday, numerous independent brokers approached me, expressing that I'm the only one clearly communicating these issues. The new addition, Matt from Missouri, sought operational excellence and a true understanding of brokerage. He not only interviewed me but also wanted to discuss details with our VP of Operations and SVP of transactions. I mentioned in the last earnings call that I expect, in 6, 12, or 18 months, as this complicated period unfolds, many will be fatigued by the challenges that arise. As Matt stated in his press release, he didn't want the liability and wanted to partner with a firm that truly understands these issues. I believe this will have significant implications that are currently being overlooked.

Great. Very helpful. I’ll get back in the queue. Thanks.

Thanks, Tom. We'll take our next question from Matt Filek at William Blair. Matt, if you had a question, you can go ahead.

Hey everyone. You have Matt Filek on for Stephen Sheldon. Thank you for the questions. No agent churn continues to largely stem from lower producing agents, but curious if you're starting to see some churn among the top producing agents as well? And just related to that, can you remind us on some of the incentives you have in place to help retain those top-producing agents?

That's an excellent question. I don't believe we included it in the presentation, but the data shows that most of the churn is coming from our non-productive agents. In this industry, there are always outliers influenced by incentives, and we attract those individuals as well. To answer your specific question, we developed the Boost program last October with Michael B. as an incentive targeted at small to midsize independent agents. A good example is the press release we issued today. Our focus remains on small to midsize independents who operate a similar model. We haven't traditionally been a great match for flat fee brokerages, as that often leads to significant losses due to our commission structure. However, we continually assess our competitiveness in the market and adapt to the changing landscape.

I don't want to add. We have a slide on the fireside chat deck in the appendix, right? In Q2, 75% of agents that left eXp have 0 to 2 sales transactions. So a majority of the departing agents are very low producing agents.

Perfect, thank you Kent. And then I just wanted to follow up on a question Tom had on the competitive landscape. Just curious, would you ever consider tweaking the agent compensation structure to further enhance the attractiveness of the platform from the agent's perspective? And if you were to consider such changes, what could they possibly look like?

Yes. So I can't comment on a specific material change. I will tell you that we're constantly looking at it. And I think a good example of that is what we did with REV Share 2.0, which has received massive positive reception from agents with us and the ones that joined since there were folks that literally said that was why they got off the fence in the last quarter. So we're always looking at that. But I would caution that making sure that you're not giving away the farm and then creating a not sustainable business model, which is what I think a lot of the competitors who are trying to be us have done in the sense that their core business, especially once you take out REV Share and stock-based compensation, which I don't think they disclosed as clearly as we do, but we actually do an analysis of our competitors and find that there are a lot of our competitors whose gross margin is sub 4% or 5% in their core business and mathematically just can't ever get to profitability. And so they're banking on ancillary services that are yet to be proven economic models to be their growth engine. And I just think it's very dangerous to create a model that never gets to profitability as we've seen so many examples in the last decade of well-funded disruptors who are no longer around or struggling to be around because of that.

Got it. Leo, that makes sense. I’ll jump back in the queue.

Great, thanks. I'd like to invite anyone in the audience who would like to ask a question to go to slido.com and enter EXPI if you want to submit a question or just scan the QR code that's on the right-hand side of the stage and the screen behind us. So we haven't gotten any questions yet. So I'll go to Jonathan Bass from Stephens. Jon, I think you might have a question. You can open your line and go ahead.

Yes, thank you Denise. This is Jonathan on for John. So looking at the OpEx line and stripping out a one-timer from last quarter, it looks like OpEx decreased modestly from Q1 despite a much higher REV base, so that's great. Can you guys help us frame out how we should think about OpEx for the rest of the year? And then I think you touched on this on the call, but are you guys still on track to deliver that $6.8 million of profit improvement each quarter for the rest of the year?

Maybe let me address that question. So we don't guide to the quarterly OpEx, but I will call your attention to a few items right. Given the success of the international business, we expect to continue to invest in December in the second half. Now we also expect mid-single-digit increases in SG&A in the second half versus the first half of 2024 due to annual adjustment of employee salary coming of the eXp current expense and ongoing legal costs related to antitrust lawsuits. Given June's low point of system home sales, right, we are not the election of the U.S. and interest rate certainty, we expect some pressure on the revenue side. So this is more as a general guideline, we see in the second half, particularly in the SG&A side. What's your second question? Jonathan?

Are you guys still on track to deliver the $6.8 per quarter of the profit improvement?

Yes, we are on track. The overall full year is $20 million cost improvement. Yes.

Perfect. And as a follow-up, maybe for you, Glenn, given your focus on the international business of late. Could you maybe highlight what markets performed well in 2Q 2024? And what markets you're most excited about?

Yes, we've seen significant growth in various countries, with South Africa standing out as a key area of expansion for the company. We were recently recognized as the most agent-friendly brokerage in South Africa by an independent agency, which is a notable achievement. We're also the fastest-growing brokerage in the history of real estate there, similar to our performance in the U.S., Canada, and other countries. In addition to South Africa, we're making strides in the U.K., France, and Spain, and we expect a high-volume team from Portugal to join us soon. We are revisiting our agent value proposition in each country, as each market has unique needs. Some of the tools and technologies we initially implemented weren't fully suited for agents, which hindered growth. We've learned that countries that have embraced more localized systems and tools, supported by strong leadership, have seen better results. We're currently assessing our agent value proposition as well as how we compensate leaders in different countries, moving towards more incentive-based models rather than fixed salaries. This shift should help reduce operating costs as we scale. We're excited about these developments and look forward to sharing more insights into our international performance as it evolves. It truly feels like the early days of eXp on the international stage.

Got it. Thanks for taking my questions.

Sure. And we do have one question from the audience on Slido. The person asked, over the past year, it looks like many of the executives in eXp have sold stock, none have bought any, and I had a couple of agents ask if that is a red flag.

I have a 10b5-1 plan in place that has historically targeted selling between 3% and 5% of my holdings in a given year. It will take me many years to sell. I am still the largest shareholder, so I am not finished selling shares, but it does provide me with some cash flow. Most of the other executives have been modest in their selling, although one did sell all of his position and then left the company.

Thanks, Glenn. That concludes our question-and-answer session. Thank you, everyone, for joining. As always, please stay connected by visiting eXp World Holdings 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 eXp World Holdings Second Quarter 2024 Earnings Fireside chat. Thanks for joining.