Welcome to the Douglas Elliman's Third Quarter 2025 Earnings Conference Call. This call is being recorded and simultaneously webcast. An archived version of the webcast will be available on the Investor Relations section of the company's website located at investors.elliman.com for 1 year. I would like to turn the conference over to Douglas Elliman Vice President of Finance, Heather Capriola.

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

Thank you, Heather. Good morning, and thank you for joining us. We have strong momentum as a result of the decisive steps we have taken this year to build a more focused pure-play luxury brokerage. While others in the industry are pursuing consolidation and platform integration, we remain committed to deepening our leadership in the luxury segment, a category that is synonymous with our brand. This strategic focus positions Douglas Elliman well for long-term success and value creation for our stakeholders. On today's call, we will discuss the current operating environment and Douglas Elliman's financial results for the 3 and 9 months ended September 30, 2025. All numbers presented this morning will be as of September 30, 2025, unless otherwise stated. We will then provide closing comments. Before we turn to our third quarter 2025 results, I would like to begin by discussing some of our recent strategic initiatives. For the first 9 months of 2025, our revenues increased by 5% year-over-year to $787.6 million. We also made considerable progress toward restoring profitability, reducing our operating loss to $21.5 million from $52.6 million in the same period last year. Taking a step back, 2025 has been a pivotal transitional year for Douglas Elliman so far. Our focus has been on building the foundation for sustainable long-term growth and positioning the company to capture opportunities as market conditions improve. We have taken decisive steps to sharpen our competitive edge, enhance our service offerings and expand our reach. The groundwork we have laid, in particular, selling our property management division and eliminating the overhang of the in-the-money convertible debt, expanding our brand internationally and making investments in artificial intelligence that is helping our agents do what they do best, position us for accelerated growth and value creation in 2026 and beyond. 2025 marked a bold evolution in our brand and our business model. Earlier this year, we announced the launch of Elliman International, extending our renowned service and network into key global markets. We are already making strides with our entry into France announced last week, which brings the Douglas Elliman brand and our high standard of service to the prestigious markets of Bordeaux, the French Riviera, Monaco and St. Barths with plans to expand into Paris and the French Alps in the near future. Our expansion into France and Monaco, led by industry veterans Philippe Curutchet, Fredrik Lilloe, and Edward de Mallet Morgan is just the tip of the iceberg. Our international growth is complemented by the launch of new global property distribution partnerships, including Propco Luxury and the Kay and expanding our reach to millions of high net worth individuals worldwide. This strategy answers the growing demand from American and international buyers for seamless cross-border luxury real estate expertise. We have also taken decisive steps to sharpen our business focus, strengthen our financial foundation and expand our suite of specialized client services. A major recent milestone was the sale of Douglas Elliman Property Management for $85 million to Associa, the nation's largest community association management firm. We believe we will recognize an after-tax gain of approximately $75 million on the sale. This transaction sharpens our focus as a pure-play luxury residential brokerage and eliminates operational complexity. With cash balances of approximately $126.5 million at October 31, 2025, and no debt, we are strategically positioned to capitalize on market opportunities in our evolving industry. We are now uniquely positioned both financially and strategically to pursue further geographic expansion, technological advancement and strategic acquisitions from a position of strength. We have also introduced Elliman Capital, our in-house mortgage platform developed in strategic alliance with Associated Mortgage Bankers. This innovative platform is designed to streamline the home financing process for clients seeking both traditional and nontraditional loan products. Our clients benefit from competitive rates, a diverse range of loan products and the seamless integration that comes from working with a single trusted source for both their real estate and financing needs. Our new Estate, Trust & Probate division, along with the launch of Elliman Private Listings provides even more specialized client-centric services, reinforcing our total commitment to choice, privacy and exceptional service for our discerning clientele. A central pillar of our strategy has always been investing in the agent experience, empowering our professionals with some of the most advanced tools in the industry. We recognize that real estate is and always will be a people business. That is why our approach to artificial intelligence is focused on augmenting, not replacing the agent expertise relationships that define Douglas Elliman. Earlier this month, we launched Elli AI, a first-of-its-kind AI-powered assistant app designed to streamline the daily workflow of our agents. Elli AI enables natural language MLS searches, generates branded reports and lifestyle maps, and aggregates real-time data from MLS public records and the web, giving our agents the insights they need to deliver truly personalized data-driven service. Our new Elliman Inspirations platform on elliman.com takes this even further, offering an AI-powered home discovery tool that personalizes property searches and deepens agent-client collaboration. By putting advanced technology in the hands of our agents, we are freeing them from repetitive tasks, equipping them with real-time market intelligence and enabling them to focus on what matters most, building relationships and delivering exceptional outcomes for clients. We intend to continue to partner with leading technology providers, scale our internal talent pool and maintain rigorous governance to ensure our AI road map supports both growth and trust. We believe 2026 will mark the beginning of a new growth phase as the investments and strategic moves we have made in 2025 begin to yield results. We are confident that our focus on innovation, international expansion and luxury service will drive sustainable value for our clients, agents and stockholders. With that, I will turn it over to Bryant, who will provide more details on our financial performance and the trends shaping the residential real estate market.

Good morning, and thank you, Michael. We are confident that our positive momentum is continuing and has positioned Douglas Elliman for long-term success. Before discussing results for the 3 and 9 months ended September 30, 2025, I would like to discuss the strength of Douglas Elliman's balance sheet and the competitive advantage it provides the management team in executing its growth strategy. In October 2025, in connection with the sale of our property management division for approximately $85 million, the company redeemed all of its convertible notes for an aggregate payment of $95 million, which included accrued interest. As Michael noted, we believe this strengthened our financial position as after the redemption, the company had approximately $126.5 million of cash and no debt at October 31, 2025. We believe our strong balance sheet gives Douglas Elliman a competitive advantage by providing optionality to expand into new markets where appropriate and strengthen our services platform as opportunities arise in our ever-changing industry. Results from the first 9 months of 2025 indicate that our core operations are reflecting the impact of the strategic actions we have been taking over the past 2 years. In particular, the first 9 months benefited from a favorable sales mix, highlighted by strong contributions from development marketing in the Northeast region. Specifically, revenues from our development marketing division increased by $17.2 million from the first 9 months of 2024 as we began to see the benefits of the investments we have made in the division in recent years. As a reminder, we generally recognize commission income from development marketing contracts when the underlying units close. Looking to the future. At September 30, 2025, our balance sheet reported $90.2 million in deferred revenue liabilities from development marketing contracts, which were offset by deferred assets from development marketing contracts of $52.8 million. The net amount of $37.4 million, plus future commissions received at closings, will be recognized as income when units in these developments close. In addition to our development marketing division, I am pleased to report that because of, among other things, a targeted recruiting effort, revenues from existing home sales in our Northeast market increased by $12.4 million or 9% from the first 9 months of 2024. Even with these accomplishments, our operations faced ongoing challenges from economic pressures, including geopolitical uncertainties and the continuation of elevated mortgage rates when compared to recent history. Although not included in our third quarter results, cash receipts from existing home sales in October 2025 were 6% more than October 2024 and total brokerage cash receipts, which include existing home sales and receipts from our development marketing division, were 2.5% more than October 2024. Before discussing third quarter results, we would like to highlight a few key trends. First, Douglas Elliman continues to set the standard in the luxury market, and luxury home pricing remains strong. Our average price per transaction year-to-date rose to $1.87 million compared to $1.68 million per home in the same period last year. Over the last 12 months, this average was $1.8 million per home, up from $1.6 million in 2024. In the third quarter of 2025, our agents sold 333 homes priced at more than $5 million, representing 5.9% of total transactions and 1,016 such homes in the first 9 months of the year. These are increases of 20% and 32%, respectively, over last year. We also sold 87 homes for more than $10 million in the third quarter and 292 year-to-date. These are increases of 19% and 28%, respectively, from the last year. These results clearly demonstrate Douglas Elliman remains the definitive name in luxury real estate. Our development marketing division remains the preeminent industry player with an active pipeline totaling $25.5 billion of gross transaction value. This includes approximately $16.6 billion of gross transaction value in Florida alone. In addition, another $6.1 billion of gross transaction value is expected to come to market through December 2026. We believe this strong foundation positions us well for the future as we generally recognize commission income from these projects upon closing, which is generally between 2026 and 2031. In addition to a strong fourth quarter in 2024, development marketing has continued its momentum for the first 9 months of 2025 as its 9-month revenues have increased from $42.3 million in 2024 to $59.5 million in 2025. Now let us move to updates on our expense structure and our continued focus on operational efficiency. We continue to manage investments across our markets with a strict focus on return on investment metrics. For the 3 and 9 months ended September 30, 2025, our operating expenses, excluding commissions, depreciation and amortization, unusual litigation expense, settlement and related expenses, impairment on fixed assets, restructuring expenses and noncash compensation, increased by $2.5 million and $600,000, respectively, compared to the 2024 periods. The change was primarily due to increased personnel expenses, although targeted expense areas such as off-line advertising continued to decline. The increase in compensation was attributable to our ongoing investment in the development marketing business as well as increased bonus accruals associated with increased revenues from the business performance. Moving to the operating performance of the business in the third quarter. Douglas Elliman reported $262.8 million in revenues compared to $266.3 million in the 2024 period. Net loss for the quarter was $24.7 million or $0.29 per diluted share compared with $27.2 million or $0.33 per diluted share in the 2024 period. Net loss in the 2025 period included a noncash charge of $15 million associated with the increase in fair value of derivatives embedded within our convertible debt, and this was primarily driven by an increase in our stock price from $2.32 a share at June 30, 2025, to $2.86 per share at September 30, 2025. Net loss in the 2024 period included a noncash charge of $20.2 million associated with the increase in fair value of derivatives embedded within our convertible debt. Adjusted EBITDA for the third quarter was $2.7 million compared to $2.3 million in the 2024 period. Adjusted net income for the third quarter was $156,000 compared to adjusted net loss of $2.7 million or $0.03 per share in the 2024 period. Now turning to the operating performance of the business for the 9 months ended September 30, 2025, which will be compared to the 9 months ended September 30, 2024. Net loss for the 9 months ended September 30, 2025 was $53.3 million or $0.63 per diluted share compared to $70.3 million or $0.84 per diluted share. Net loss in the 2025 period included a noncash charge of $33.2 million associated with the increase in fair value of derivatives embedded within our convertible debt, which was primarily driven by an increase in our stock price of $1.67 per share at December 31, 2024, to $2.80 per share at September 30, 2025. Net loss in the 2024 period included a $17.75 million litigation settlement charge and a noncash charge of $20.2 million with increases in fair value of derivatives embedded within our convertible debt. Adjusted EBITDA for the 9 months ended September 30, 2025 was $2.9 million compared to a loss of $12.4 million in the 2024 period, that is an increase of $15.3 million. Adjusted net loss for the 9 months ended September 30, 2025 was $6.9 million or $0.08 per share compared to $26.3 million or $0.32 per share in the 2024 period. And as mentioned earlier, Douglas Elliman reported $787.6 million in revenues, up from $752.3 million in the 2024 9-month period. As noted earlier, Douglas Elliman has maintained ample liquidity with cash and cash equivalents at September 30, 2025, of $143 million. And after the sale of our property management division and associated redemption of our convertible debt, on October 31, 2025, we had approximately $126.5 million of cash and cash equivalents and no debt. Thank you for your attention, and back to you, Michael.

Thank you, Bryant. We have implemented strategic initiatives to advance our market leadership, elevate our service offerings and expand our reach, both domestically and internationally. Our results for the first 9 months of 2025 demonstrate that this year's investments are already delivering tangible benefits, and we expect these positive impacts to continue throughout the remainder of '25 and well into 2026. Our strategy is clear. To be the preeminent luxury pure-play residential real estate brokerage platform, powered by the best-in-class innovative technology with a global reach. Thank you for your continued trust in Douglas Elliman. With that, we will turn the call over to the operator.

Thank you for joining us on Douglas Elliman's quarterly earnings call. We hope you have a good day, and this will conclude our call.