Above, Leo Pareja
eXp’s first quarter earnings call reeled in on what most of the industry is focused on right now: Zillow’s take on Clear Cooperation and private listings, AI and a potential recession.
Focusing on the Clear Cooperation Policy (CCP), eXp Realty CEO Leo Pareja emphasized eXp’s consumer-first commitment.
“We believe that delayed marketing will create customer confusion, and we are not participating,” Pareja said.
The company has always had an office-exclusive, CCP-compliant strategy, Pareja said. But eXp’s position is one that protects consumers but also the enterprise, he added.
“The biggest difference between us and (Zillow) is that they’re treating it as a business model, which I firmly believe is going to create real liability to themselves and their shareholders,” Pareja said. “There’s very serious, non-industry participants—meaning not a brokerage or a portal, weighing in from fair housing violations, and I think every investor on this call needs to pay attention. The decisions we make impact our enterprise value, and we want to make sure that we’re doing right by the consumer, but also not creating real liability for our shareholders and the enterprise.”
Although eXp partnered with Zillow to share their listings on the portal on the first day of advertising, Pareja made it clear that it is not an exclusive partnership, as the listings are available to every other major portal.
“The vast majority of buyers start online with massive amount of exposure and eyeballs, so whether it’s Zillow, Redfin, Trulia or Homes.com, we’re happy to give out our API, because we want as many eyeballs as soon as possible, as we understand the value of having the most exposure for a consumer,” he said.
AI
Glenn Sanford, founder and CEO of eXp World Holdings, underscored the company’s drive toward artificial intelligence (AI), particularly in the international market.
“We’ve got a lot of new things being stood up very quickly that previously would have taken months, and in some cases, we’re doing it in hours,” he said. “We’re really leveraging this, and we think about just the unlock that’s going to take place because of this shift. We think it’s going to be pretty incredible, and of course, on international, we’re seeing it front and center, playing out in front of our eyes, and we think that it’s a really great proving ground for the rest of the company.”
International growth
Felix Bravo, managing director at eXp International, said this has been the strongest quarter yet, with revenue up 103% year-ove-year and their most new country launches to date, with operations launched in Peru and Turkey. Launches are being prepped for Egypt, he added. Japan and Ecuador are next.
The company’s long-term goal, Bravo said, is to reach 50,000 agents in 50 countries by 2030. They will achieve this through strategic launches in high-income and emerging markets, using self-managed, regionalized teams.
This year, their launches have a different marketing strategy that features in-person launches with eXp’s International leadership team, alongside the local and regional teams, Bravo added.
Agent momentum and ‘huge joiners’
There was a 5% drop in agent count year-over-year, with 81,904 agents, but an increase in transactions per agent, said Jesse Hill, interim chief financial officer at eXp World Holdings.
“That indicates that we do continue to attract and retain the highest productive agents in the industry,” Hill said.
The majority of departing agents are in the low-producing cohort, with 77% of agent attrition having fewer than three sales annually.
Agent attrition rates are very important metrics, and eXp is excited about the momentum of improved attrition rates, Pareja said.
“Agents on teams are 67% more productive than just individual agents, and with that comes a longer onboarding cycle. Teams take longer to onboard. This strategy is working and showing up in our results,” he said. “Forty-one percent of our agents were on teams in Q1, and we have more productive agents in Q1 this year with more agents capping. This quarter, agent attrition improved 22% (quarter-over-quarter).”
eXp had two “huge joiners” in the past few days, including the ERS Real Estate Group from Nebraska, with 60 agents from Keller Williams. Also joining eXp is the Neal & Neal Team from San Antonio, Texas, the No. 1 team at Keller Williams Texas, with 914 homes sold in 2024.
“We continue to have more active conversations, but as a perfect anecdotal example, I started speaking to the Neal brothers probably 18 months ago, and at that size of team and complexity, it takes a little bit of time to get them over, but that pipeline is full and the excitement continues,” shared Pareja.
Recession?
Asked about a potential recession in the U.S., Pareja said that in the last quarter of 2024, the company was feeling optimistic about a “little bump” over 2024, going into 2025.
“I think right now, we’re almost in a pause-holding pattern to see where the full weight of the April numbers (are), and then we’re also all collectively holding our breath tomorrow to see what happens with rates,” Pareja said. “We are watching every single metric. I do think that one thing that hasn’t been mentioned, at least by me before, is that I look at the housing bowl of soup as three very important ingredients: interest rates for affordability, supply for what creates the demand/supply ratio, but the…one that isn’t talked about enough, which I think is going to have a meaningful impact over the course of 2025, is consumer confidence.”
The model is designed to give the company the ability to pivot and react to things “we can’t control,” Pareja said.
By the numbers
“Despite, admittedly, a continued tough macroeconomic environment,” the company generated $954.9 million for the quarter, up 1% year-over-year, said Hill.
Adjusted EBITDA was $2.2 million.
The company’s focus is on volume, as they want the most productive agents, Hill said.
“If we have higher productive agents that cap a bit more, just due to the nature of our model and the way that we structured it, and that brings down the percentage on margin, we’re okay on that,” he added. “We know that we’re working with smaller margins in general. We get a lot of commission and revenue share back to our agents, and that’s the whole essence of the model.”
Real estate sales volume was up 4% from the previous year, at $38.6 billion, “driven by an increase in home sales price, as well as increased productivity in our international segment,” Hill added.
During his six years at eXp, Hill said the company has always had a focus on automation and efficiency, but the “AI layering of expenses” going to the front-end should result in synergies in the back half of 2025.”
“Now with AI layered on top of that, that’s where we’re really looking to find some synergies in our unit economics of our expenses—particularly in the repeatable high-volume workflows. We just closed 90,000 transactions in Q1, so there’s a lot of low-hanging fruit there when it comes to AI enablement and automation.”