The traditional real estate brokerage model is in need of disruption, but that doesn't mean real estate agents are going away anytime soon. In fact, if eXp World Holdings' (NASDAQ: EXPI) recent results are any indication, the real estate brokerage business could still have a very bright future in the U.S. and many other markets around the world.
In this article, we'll take a closer look at what eXp World Holdings does, how it has grown over the years, how its stock price has performed for investors, and more.
eXp World Holdings company profile
eXp World Holdings is the parent company of a few businesses, most notably eXp Realty. eXp Realty is a cloud-based real estate brokerage that leverages technology to make real estate agents' jobs easier and more effective.
One of the fastest-growing real estate brokerages in the world, eXp operates in the U.S. and more than a dozen other markets worldwide, including Brazil, Australia, India, and the U.K., just to name a few. eXp Realty also offers a cloud-based commercial real estate brokerage known as eXp commercial.
One of the big differentiators of eXp Realty is how it treats its agents as partners in the business. The company offers not only one of the best real estate commission structures in the industry but also the ability for agents to earn stock awards. As you'll see when we get to the stock performance section, this has proven to be quite a valuable benefit over time.
Just to name a few highlights of the equity incentives, eXp agents get $200 in company stock after their first closing and $400 in stock for every agent they refer to the platform. Agents also have the option to voluntarily receive 5% of their commission in stock at a 10% discount off the market price. And top agents get some generous equity awards on top of all that -- up to $16,000 in stock upon reaching certain goals.
The point is that eXp can offer agents a better compensation structure than its rivals, thanks to the efficiencies provided by its tech-focused platform. An 80/20 commission split with a $16,000 cap on commissions paid to eXp is extremely competitive, and eXp also offers a revenue-sharing program when its agents bring new agents onto the platform.
In addition to eXp Realty, eXp World Holdings owns remote-collaboration platform Virbela, media platform Success Enterprises, and Showcase IDX, a real estate-focused plug-in for WordPress that helps agents improve their website capabilities. But it's important for investors to know that eXp Realty is by far the biggest part of the company.
eXp World Holdings news
eXp's growth is by far the most important (and most impressive) item to mention.
eXp Realty has more than 62,000 real estate agents worldwide on its platform, and this figure has grown rapidly in recent years. The company surpassed the 60,000 mark in July 2021, and this was 85% year-over-year (YOY) growth relative to the 32,400 agents on the platform in July 2020. This is a rapid pace for growth, especially considering eXp didn't surpass 10,000 agents until 2018.
The revenue generated by the business has grown impressively as well. In the second quarter of 2021, eXp surpassed $1 billion in quarterly revenue for the first time ever, and this was 183% YOY growth. Over the 12 months through June 2021, eXp generated nearly $2.8 billion in revenue. Take a look at how it's grown through the years.