Q3 2020 eXp World Holdings Inc Earnings Call
GAAP income quarter, so very proud of that and as we've talked a few times.
Cash flow again has come come come up very strong.
We had 20 point 28.3 million.
For $3 million at 2019, with a cash balance of 92 million after 9.3 million stock buybacks. So as we've talked about before this is a this is a really important thing for us we have zero debt on our balance sheet still.
And do not foresee taking on debt and then in any kind of near term.
And then Glenn will talk about for Bella and we'll get into that with some more detail details with some metrics, but that has grown and the team's doing very well. There. We also showcased was consolidated with.
With XP and the investment is growing and we'll get into that a little bit later.
One thing that I would like to end with on just on the financial summary is that we had a very strong growth business prior to Cove. It.
So put in perspective in 2018, we did 500 million and sales 2019, we did a billion. So we are growing at 100% back before Cove. It we actually grew through covert work, we're doing very well right now we anticipate growing after covert so it's.
Growth continues and what we're seeing in the quarter were still seeing strengthened the business, we're really still seeing strength in the transactions and the company has done very well in Q3, and we expect to have a very strong Q4.
So I'll give it back to you, Greg and actually I think we're going to go over to Michael right now.
Michael to give us a international update.
Sure. Thank you, Jeff and Glenn for inviting me to share the stage with you and thank you Greg for being the moderator today and to really advancing this conversation. It has been an incredible time here with the international focus that we've had as you know we already were in the U.S., Canada, Australia, and the United Kingdom we.
Hoping in South Africa last month, we're opening in India on Monday, We're opening Mexico also in the month of November and then in the early part of December we're going to finish up by opening Portugal, and France. So the idea that we're opening these five countries as we announced on the last quarter back.
In August we announced these five countries and it's amazing to sort of see that we are able to do this in the middle of a pandemic, where we no one's jumped on a plane and what the growth potential is for these five collective countries. Just think about this for a moment those five countries represent 1.6 billion people in population they represent.
7.37, GDP trillion dollars 7.37 trillion dollars in GDP, and then 3 million possible agent pool. So when we start looking at what our growth trajectory is its enormous that's not even looking at what we're going to be doing next year and what our focus is for Q1 already with we'll be announcing soon.
But the idea that we have a very aggressive growth trajectory has not stopped we're going to end the year in a very strong agent count number and we're also doing some other projects. We're looking at doing a global web site, which will be promoting and getting further along next year. The idea of a global referral platform.
There's some great projects that we're working on and not just with the growth of countries, but really on the growth and focus on international overall.
So with that brand I'll shoot it back over to you for any specific questions you might have for many of these topics.
Sure I appreciate that my goal and.
The high level commentary from both Glenn and Jeff.
I'd love to get into some key Rene that I have is you guys don't mind and.
By the way if anyone is is watching these livestream and you want to ask a question you can actually go to slide no just type in.
Deo on your browser and then enter the code X P. The company's tigger.
So we'll see those will be accepting questions from the audience. After I get through some of the ones here I'm going to have an upfront.
Maybe just to kick it off.
Over to you blend.
Love Some general commentary on what you're seeing on the strength of the housing market.
In the third quarter of 2020 and more specifically, we're almost halfway through Q4 now.
How the trends been in October November so far and what are your general thoughts for XP.
Residential real estate side in the us for the next several months.
Yeah. So.
One of the things and Jeff.
Certainly comment on this because I think you're already starting to see some of these trends show up.
We are still seeing really strong.
Q Q4, I mean, we're seeing the type of volumes.
Through just say October that we were seeing in Q3, and so were really really optimistic that that will continue on.
In in.
In November December and I think it's really still driven by two two big trends and one is the fact that people are moving when no longer locked into having to live within your 2030 minutes of their of their workplace because of what's going on with Covance and they start.
Be stuck in the same house, they're wanting to make a change and so thats.
That's something that's definitely going on and then of course, the the historically low interest rates.
Mick.
So much easier to think about buying because most consumers are payment buyers. So you just look at that of course, we have great recovery Q3, we saw the improvement on the overall economy.
Which was historic.
So that just again.
It's a lot more internal demand and so as a result, we're just seeing across the board.
Real estate.
Being consumed at a really high level.
Yes, I'd add to that Glenn I think that based on what's happening around the world right now.
Traditional seasonality when people start stop moving and start.
No hunkering down for that for that the winter season, we're not seeing that right now we're actually seeing.
Pretty very strong growth in October so.
I think that that's changed to an extent and what Weve also seen as we've seen a bunch of younger generation of agents come on board knowing that were up 24 by seven.
I think going through Q2 as strong as we did in staying up I think that that's helped us and that's going to help us with that growth going forward.
Yes, and if I could start.
Sorry, if I could just jump and even internationally, what we've seen as as as early indicators for those countries that were still entering such as India and Mexico. We have seen a large number of agents in I'm talking about four digits that are looking to join and are in various stage.
Ages upbeat in acute or join because of exactly what Glenn and Jeff We're talking about and what the demand is and what our model allows for doing on a global scale. So it's really exciting to see what our future is.
Great Thats really helpful.
Looking around maybe regional markets are there any that really you are finding are standing out in performing baskin, maybe some markets that you're seeing some weakness in.
It's pardon me a ubiquitous across the board, there's really no markets and I think the other pieces when.
Normally the selling season historically has been.
From from March to September and the.
Has sort of matched up to some extent when.
Kids are out of school and so right now.
The the fact is is that even schools a little bit.
Sort of changed up and so you're not really seeing.
You're not seeing the need for people to be hunker down in any one location and and that's again pretty much across the board.
And so it's really creating a unique backdrop, where people are actually more willing to to make a move a women prior years they'd be really sort of moving in that marked the September timeframe.
Great.
That's helpful.
One of the things I'd like to transition to in talking about agents transaction in productivity.
Maybe just spend some time on the operational metrics Dr. in your core residential real estate business suit on the agent side.
Any general commentary would be helpful.
On the Mexico bid 19 in how is that need.
The aging attraction processes have been easier and then even on top of that how has that trended between you know agent retention.
Yes, well for sure I mean, the fact that.
Yeah XP hasn't missed.
I missed a beat in terms of the ability to support agents out in the field listing and selling homes has definitely been a pause the.
No we've got different different states in different parts of the country in different parts of the world are going into various levels of block down and real estate agents.
We need to be able to.
Go out Im listening to sell real estate in order to make a living and the fact that were open effect. We're there we can support them. It doesn't matter what is going on it.
It has made a big attraction easier. It's also driven I think to some extent the retention numbers as well getting better as well because you'll before agents had a very very viable choices and in bricks and mortar based pops and agents will join us and find out that they really like to go to an office but.
Right now there's not a lot of agents that you will tell you that they really like to go to an office. So its really helped sort of with just the overall X P value prop.
And Greg I mentioned before.
Productivity in the quarter is up 26% versus previous year.
Our units are up 95% and our volume is up 112%.
Not only is that growth as the agent count.
Tend to be very very solid.
Production is going up as time goes on here too. So I think the model is working very well for a lot of people to join the company.
Great.
One of the comments that you touched on in your opening remarks, Glen really surrounded the net promoter score trending up I mean in my experience agents have loved working with XP, you really put a strict focus on making it a great place for them to work.
Maybe just speak a little bit more about that in what this net promoter score really is.
How clat closely the attract this figure in line.
Yeah, it's been so the net promoter score is our probably our biggest driver for the choices that we make internally uptick.
The company into sort support our agents and brokers in the field and so.
You can look up what it is but basically as the standard question, which is on a skills or 10, how likely would you refer a friend or colleague or family member to join XP Realty and from that data anybody who's sort of referred to as a tractor or passive general, they're telling us things that need to be improved and so by folks.
Passing on those things that in their mind need to be improved and coming up with viable solutions agents just are happier XP and so so that is.
As is our one of our biggest drivers and the general as a general sense of it is is that in our opinion and that's the reason why we've got such high glass store scores. Our garage store scores are driven by really saw it agents and what's what's interesting is that presently we are the only.
Real estate brokers that I believe in the top 50, maybe even the top 100 companies aren't glass door.
Based on current trends and so.
And that's because I think of our continue will continue.
Continual focus on agent satisfaction, and continuing to drive with that as our primary Northstar.
Greg just to kind of give examples of how we use it day to day. So we are overall NPS score is 73, which is which is very respectable score it especially in the industry, but we measure everything we measure Onboarding every onboarding transaction all the transactions a payment support service does production supply.
Got it and employee employee satisfaction. So were everyday we are measuring this and then to Glenn's point I think we need to have great employees that want to be with us and that's going to lead the great agents, who want to stay with us and that's that's what we're using MPS four.
Makes perfect sense.
Thank you for the color there so.
So you.
Just curious if you look at your long term aging add goals have you put any goalposts out for how.
How many agents you'd like to track in a in a set amount of time to specifically like.
What do you think you'd be able to attain that 100000 aegion month when is that attainable line.
Yes. Good question. So if you ask a.
Our growth leaders, you or Dave can offered a micro valdez and others.
I think they're pretty ambitious <unk> I'm thinking that we're initially I was thinking 2022 2023.
And I think our I think 2023, but I think that we're definitely moving it up probably into 2022, and if if Dave and Michael have their way.
Where are you guys thinking.
So we're thinking next year actually read thinking at the end of next year, there will be 100000 agents of which 25% will be on the international side. So we are looking very aggressively with growth and the thing is that were looking to expand into some really large territory. They need you know India has 1.3 billion people.
Mexico is 165 billion people. So we're here to what we're doing some huge territories in essence huge opportunities that are there.
David I had a little friendly bet yesterday doing X pecan, and where we're pretty we're pretty confident on those numbers.
That's all right I mean, regardless.
You know you guys getting there next year or or the year. After remains incredible feat equally in the few companies have achieved that and I'd almost be willing to bet you guys have achieved it faster than anyone once you hit that mark so.
That's incredible.
Just I'm.
Looking at some of the other metrics in switching gears pretty much every other metric is is up across the board residential transaction sides residence in transaction volume.
You know are you seeing a notable volume increase across all of your agents as a whole or is it being driven by key group or groups of people on the platform.
Yeah, right now, it's really across the board and and then we're even seeing a little bit in other people's data as well.
The other brokerages and is it really comes down to the idea that right now you've got so many people are looking to purchase purchase homes that be the fact is as you're busy agent was already busy b or this uptick and so there is theres a lot of spillover to other agents who aren't as busy.
And so it really is across the agent base and it's actually one of the reasons why in Q3, we had so many of our agents capped and that one of the reasons why our gross margin.
It goes up and slower slower.
Slower seasons versus hires.
Versus busier seasons, because when agents cap, we don't earn as much for the balance. So there is another year.
So.
Oh, hopefully that helps.
Yes, it does in and maybe this is a good question to you Jeff.
What are some of the factors playing into the higher average revenue per agent and average revenue per transaction.
Yeah, I think one.
One thing we found it I think it became pretty material in the second quarter is that Weve really attracted some of the biggest top producing agents.
In the country and some of the bigger cities too.
So.
And I think when they went through second quarter and they realize that were up and going 24 by seven the same way they need to be I think that drove it Greg I think that was a that was a big part of it but I also think that I mean, just to support network that we have across the business from an education training sharing what are you seeing X.
Pecan. This week I think basically it just creates a community a very productive agents and we're seeing that and I think we mentioned before we retention is also up so I think from what I've seen so far we're up about 30% this quarter on retention and so not only we are tracking the big the big.
Producers and we're keeping them.
And so I think that's why that's why you're seeing those kind of numbers.
And the third quarter.
And I think I'll just add to that also Jeff is also the focus that we've had as a company on really the other divisions. So really the growth the global they focus on commercial what we're focusing on next with luxury and other things that we're doing there's been a lot more for that age and to be able to focus on.
And excel in under a DXP model. So those things are also really important to the agents production.
Yes very helpful. In you know Michael this is a good time to maybe transition to some of the more.
More specific questions geared at the international side of things.
You know obviously, we have been really strong in North America.
UK, Australia in several other markets that you've talked about expanding into we did get some stats in kind of the five countries.
The amount of population aging pools that they have maybe.
Maybe just if you wouldn't mind walking us through sort of what should we expect in the next call. It few months in the near term for opportunities and then which ones are are maybe going to be longer term cold in the next 12 to 18 months. So thank you for that question, Greg I think that what we are looking at is obviously, what we've already.
He announced is happening all within the this calendar year so.
India, Mexico, Portugal, and France, all will be opened before year end, what we're looking at we Havent announced our Q1 countries. Yet we have an incredibly strong pipeline I think what we'll talk about is really talking about what our criteria focus is for what we want to do obviously is one of the fastest growing real estate companies in America, we really want to.
Try to piggyback on what has been adamant that success domestically and continue to grow organically and correctly across the globe. So we're looking for those countries that can provide us with a large footprint, which can provide us with a large revenue stream with a large agent pool.
With an established real estate industry within those countries and so we're looking to establish a lot of those a strategic foothold across the globe. Obviously, we want to fill out of Continental Europe, we want to look at the Middle East we want to look at Asia countries, we want to be able to have those footholds in a different.
Confidence to be able to continue to grow our story and our footprint. We are as I mentioned, we're going to be doing a global referral platform and a global websites. So we want to make sure that as we look at these other two really large projects. We're looking at this and growing this story in inorganic.
And systematic way.
Well, yes, I mean, you not only have been able to do it quickly when you joined in in May and already expanding into all these different geographies, but it seems that you've been able to do a pretty cost effectively.
One of them.
My overarching questions and Im sure. Some on a lot of People's Minds is you had such a successful domestic rollout right. I mean, there's there's a huge agent cool in the U.S. and in Canada alone.
Why disrupt this by expanding globally.
Well I don't think its a disruption at all I think it's actually an evolution. So this is what the brand is supposed to be doing the model is proven remember we're not a franchise. So we are a business platform geared to or giving the agents those tools and resources that they need to succeed they are the brand the agent.
As the brand when you are just looking at that and you're flipping the conversation, we're not asking for a franchise fee. We're not asking for a royalty fee were making sure that that agent becomes the brand and when that happens we give them the tools and resources that they need and create a global platform for them.
Is that growth is exponential and that growth is unlimited. So that's why we have such aggressive numbers for growth in agent count because once you start looking at what this model is on a global scale. It becomes the evolution of what has already been created.
Right and you know as you are identifying and prioritizing which markets internationally is there any specific criteria you are looking for.
So as as I mentioned before we're looking to do is just to make sure that we're building. This story organically that were building. It strategically we wanted to make sure that when somebody we have 38000 ambassadors of the brand right now and so what we wanted to make.
Sure that as they're looking for their own growth potential on a global scale that we are giving those agents in those ambassadors. The greatest platform. We can give them. So we're looking to be in strategic countries around the world. We're looking to make sure that our story has the ability and our.
Platform has the ability to to have that as critical mass in those countries that we're going into and to continue to build his incredible story, that's been built thus far.
Hey, if I, if I can add on there as well I know it is a question that comes up fairly often because I definitely heard it real estate itself is actually a fairly ubiquitous business.
Country to country. So it's not like we're.
We're talking about putting in factories are doing different things and as Michael mentioned franchise agreements and other things that we don't do.
And then the other piece and we talked touched on earlier is the you know the way, we make decisions with XP and how would you improve agents business and lives but.
The way we approach that is very scalable so you're using net promoter score as as our underlying driver for decision, making and it makes it really easy it doesn't require us to have I mean, we do have really smart and a sharp people, we've got our managers brokers and our leaders in each of the different countries.
I understand.
The domestic customs the actual business of real estate is actually still it's it's a pretty simple business, we list homes and we sell homes, we advertise we put signs in the ground and we coach agents and brokers on how to do the best job and and to provide the best service and.
And if you sort of approach it from that perspective business actually gets really easy and and opening up other countries is not you know other than to be going through the paperwork exercise is not an extremely difficult exercise.
Well said, yes.
I would I would think that you know just like anything else, there's challenges when you're expanding into new markets. Michael I'd be curious to know how you're overcoming some of those those obstacles such as you know for instance language barriers.
Well, we are actually working with the translation company now to be able to fill the gap that we need in that regard, but some of the other challenges that might exist. You know there's been no MLS really in any other country outside the United States, It's only five MLS outside of the U.S.
There's a lot of countries that don't require licensing and so what happens at that point is that I think that our model actually works even better in those markets. It's the ability that you have the potential for great growth and I think at that point, what you're dealing with is finding the right Lee.
Matters and that's what we've been really fortunate in doing this model has attracted some incredible people in market and we have built some incredible leadership in country that we've done with each of the five countries that we're doing this year and then what we're already looking for for Q1. Some of those leaders are already in place and so.
That is what I think is the key is finding great leadership to be able to effectively come into those markets and be able to tell our story effectively and then be able to grow that agent count.
Yes, it's incredible what you guys have done again in in a shorter period of time.
You know maybe over to you, Jeff just comment broadly on some of the financials.
You know really just the total agent count count is that the core driver on the topline are you seeing acceleration gross commissions or.
Productivity as meaningful contributors.
I think in Q3 as I mentioned, we are productivity was up 26% so that help.
That helped drive the numbers in Q3.
Definitely I mean, the way the model works Greg as you know is that we are adding productive agents and thats kind of what we're seeing so and productivity is up the commission is relatively flat. So we don't see that that hasn't been a big driver.
As we think about going forward.
We want to maintain and continue to improve the the best agent model in the industry.
Then on top of that you know that we'll talk about a little bit you know as affiliate services get traction commercial gets traction technology, IDXX et cetera, that's where we see the.
Revenue model changing and the margin model changing a little bit in the future.
Yes.
Yeah, I think gross margins were up 10 basis points year over year and.
Obviously the affiliated servicing some of the other drivers you have are going to be meaningful contributors.
To that.
If you're looking at that you had mentioned you did at $9.3 million stock buyback in the quarter.
Do you anticipate continuing net stock buyback program on a steady cadence or how should we think about that I.
I mean, that's that's that's what our plan is right now I mean as the market changes in the stock price changes in what we where where our cash balance goes but at this point in time, but that's what we're looking at continuing and in the short term anyway, Yeah philosophically, Greg just so you know.
I do is that we have a number of raising equity programs that we provide to our agents and ultimately we want to offset that because.
In some respects there they are receiving stock in lieu of cash in hand, and the nice thing is they become motors and the ownership piece really changes there.
Our engagement with the brokerage but.
So to the extent that we can offset that I think just make sense because I know one of the things that I hear a bit is about.
Both dilution in the stock and certainly relative to the growth, it's pretty small, but it is still something that comes up on a fairly regular.
Basis in conversation. So so we do want to get to sort of a.
Call It a.
Some neutral.
Relative to our equity awards with agents.
Makes sense.
Just on capital allocation from a capital allocation standpoint, what else are you prioritizing your thinking about any specifically are there any other interesting opportunities in the acquisition pipeline I know you've made a few recently.
Is that something you guys will continue to do.
Yeah, I mean, it's something we definitely continue to do.
As you can see from the acquisitions made so far none of them have been.
Massa have been material, where it would be a situation, where we have to go out and get funding.
So we're continuing to look at opportunities we will continue to bring.
New.
Technology, then into the company and also anywhere we can add to help our agents be more productive and keep our retention rates up those are the kind of investments. We're looking at there is nothing major.
That would change our capital allocation at this point in time, so in the foreseeable future. We believe we have the cash.
To make these kind of acquisitions without going to the markets.
Right, Yes, I mean, there are so many other growth levers you guys have right now is.
Meaning you kept up with growth here on the affiliated services front.
Maybe just an update there on mortgage title escrow settlement.
What some what is really the long term value proposition for both the agency and XP as a company.
Glenn you want to take that one.
Sure Yeah no.
You know affiliate services in my opinion sort of represents.
An opportunity for you.
To smooth out the transaction, whether it be on the mortgage or title.
Escrow side, one of the things is right now your agents and consumers are working with.
Multiple entities throughout the closing transaction and it can be somewhat challenging when you have to go to.
You go to a real estate agent and then and then you have to go talk to are entirely separate mortgage company and then you have to close with entirely separate title escrow company, which from from Oh, Hey, Russ.
Respa perspective, you know may continue to be part of the backdrop, but the more that we can create a one stop shop with the the best mortgage services, the best title and escrow services.
Home warranty and other things that a consumer might need and we can streamline that makes it easier for their agents, but also makes it better for the for the consumer and so from our perspective.
That just makes sense and you know every mature real estate brokerage has these services at scale. The differences we've grown so fast, but it's just delevering these things in.
It's actually more work when the company growing you know 5100% year over year, then if a company is relatively static because then you're only you are working on one thing.
But here we are working on multiple multiple fees at the same time try to get those layered in and like that sort of.
As part of the value mix and it's a it's a it's a little bit of a delicate balance because we don't want to tread on or hurt the agent, which we certainly do not but at the same time agents are somewhat loyal to their current mortgage professionals current title escrow professionals and then and then.
Well there is pain in their business. They generally are looking for other services and so we want to just be there when there's an opportunity to help improve their business and their life.
It's very helpful. Yeah, and I mean, one of the core technologies and I'm just personally really excited about you talked about this earlier is just your grubelich platform right I mean growth obviously has been pretty impressive.
You will always commented on the fact that this is really an enabling technology now with Brean beyond I know I've actually had an opportunity to see that in just unbelievable what opportunities that present.
Could you just comment generally on why you're so excited about barbella and.
And how do you feel the opportunity has changed over the last couple of quarters as people have shifted to remote work environments.
Yeah, I mean, the the work from home.
Our environment and the the working remote environment has totally changed this year, it's probably accelerated by missing at least 10 years, just because of what took place Workover 19, and so we're we're seeing our usage from Q from.
From Q2 Q3, we had over I think over 100000 people use the verbal platform in Q3.
Versus 63000 people that use in Q2 and last year. If you were to look at this same time last year. I mean, we are usage was primarily the XP real thing I mean, we were the number one user per wullf per work platform across any company in any of this industry and that's why we bought rebel.
Back in 2018, and then we had a number of just core.
Users of the platform that were.
These include customers, Stanford and Weve ecommerce companies with some other number of small and usage use cases, but now we've got we've got HTC now you're pitching this an Asian company to further their HTC Vive Sweet and we've got all these other companies are.
Now standing up on campus or some with as many as I think one company that we're currently.
Building out a large campus has over 30000 employees and expect at least half of that would be using her bela as their primary way to go to work and so you look at a lot of these enterprises and you start to see that you'll sell things that a lot of people were really excited back about back in 2007 2008 2009.
Hi, I'm now.
This stuff is actually becoming a reality because you know just what's been going on in the world and I think the the other pieces that.
I think that the traction no matter, what happens vaccines coming out whatever.
I think I think we've now made a fundamental shift we now do believe.
At the at a sort of a we'll call. It maybe a DNA level that we can in fact work remote and still get worked on and that was always this question and so.
We we did it started in 2009.
And well you know and we've grown the fast growing real estate brokerage firm in the history of.
Residential real estate.
By using a virtual world for work platform, but now we've got lots of other customers and lots of other.
Clients and partners that are seeing what type of economic leverage can be created and 10 community leverage can be created by using a platform like rubella and we are because of the amount of work that you X P put into it using it as a.
Three vehicle.
It is b.
Most business ready.
Virtual platform for that type of activity across any platform and it's because we pushed the envelope. We broke things early we broke things often and we've learned all.
A whole bunch of stuff about this that other companies yet have to figure out because they didn't have a big customer like pushing the envelope.
Greg just add to that I mean, the poster child right now for us and rebel is international expansion.
Historically you'd have to go out you'd have to build the offices you have to travel all over the place we haven't gone anywhere.
And we're being very successful you will see these meetings with people from all over the world and for Bella and Alex mentioned yesterday too that he believes that we said probably a world record yesterday XP got haven't.
Plus 1500 people in one room being able to interact with each other from a lot of VR side. So it's been fantastic for us and it's enabled our growth and it's going to enable our growth into the future.
Well, you certainly proven to the world that that it works.
And just a great case steady here and Im sure people are excited about it I have to ask no longer term.
From a growth perspective, like what do you what's your ultimate vision for Rubella and how big do you think this ultimately can be.
Yeah. So.
One where I think we are still truly waiting for a little bit more traction. We certainly have a number of early adopters in the borough of platform I'd say that even even the customers that come our direction to this.
A really those early adopters so we have not.
Reached a point of really getting Oh, the masses to use the barbella platform, but I think you know rebel are really as part of a larger category of upper moat work, enabling technology and certainly as you know you've got sort of zoom on one end.
And then you've got rebel or maybe a slightly other end of a continuum.
But this.
These technologies are going to be used in in partnership with lots and lots of other technologies, so you're going to see per barrel and you're going to see assuming you're going to see you know Microsoft teams and workplace by Facebook and you can see all these things sort of built.
And connect to each other in a way that they support these really unique use cases and as we scale I think we're going to hit some sort of traction point, we're oh it becomes the place you go to work.
Were these other platforms will be the place you keep track of conversations and these other than other tools will be.
Kept for quick and Dirty video conferences, and Youre going to have sort of the.
They're going to start to slow the categories. Once it sort of recognize a rebel is the place you go to work I think this thing takes off and we were.
I'm going to 200 companies enterprises.
Spending 50000, a month on the platform.
And I don't think Thats unrealistic to think about what does it mean to have 200 300 500 companies that are that have replaced their physical bricks and mortar office buildings in campuses with a virtual world for business, because who knows what happens in the future and why wouldn't you have.
For very good compared to their their their overall expenses why wouldn't you have a platform that you can scale that is for all intents and purposes.
Uh huh.
The fear.
Sure and can consume.
Can scale without the some of the natural disasters and other things that Mike.
Well come out there.
Yes, indeed in on the commercial real estate side of things I mean, this is another huge growth opportunity for you guys.
Maybe you could broadly comment on.
Yes, how are how are things rolling out and are you, adding agents brokers how should we think about this over the next six months.
Jeff you want to touch on on Yeah, sure James Yep Yep. So.
We brought so we brought on our leader James Wong from Sperry and he's joined US as president. So we're we probably have.
Thousands.
Less than a thousand but we have people that do commercial and we'll try it we're setting it up right now we believe that.
Towards the end of next year, we'll probably have about a thousand plus your commercial agents. So this this will go through the process right now we launched on November Onest.
And then going into next year, I think it will get traction Greg.
Going into the first second quarter of next year, but everything's been set up the brokers is being set up all the contracts with all our suppliers being set up and what we found so far just like Michael found on the international side is James.
James has seen a lot of attraction for this particular model, our particular model in the commercial space and with what does the cost structure that it affords you to be able to go out and do business.
And I just wanted to add to that there's also a lot of the cross a cross divisional opportunities because we've seen a lot of interest for commercial internationally. Obviously domestically. So there is a lot of cross divisional opportunities that will exist on a global scale also for commercial.
Yeah, that's that's a great point Michael I.
Naturally makes sense.
And then if I'm thinking about the integration of showcased IDXX, how is that coming along.
Yes, it's it's coming along quite well the reality is is that it's a fairly new team.
To to XP, they had been providing what's referred to as IBX are basically real estate websites to agents.
For the last 10, 15 years, they're very mature platform and and what we bought them for was to actually build out our own national platforms, and then also roll out our own internal.
Web sites to agents.
Well, so you know.
It's.
We mentioned I think last time.
But.
We're we're looking at 12 to 18 months for this to really get the where we'll start to see results and that's because there's a lot of work in the background, but we've already got a preview of the Canadian website, we'll we'll we'll start to get that rolled out by year end. We've got some U.S. web sites will start to retool early next.
This year and then and then there is a lot of other things that will just come out of out of the showcase platform I don't want to talk too much about it because we think that there's some things that we'll be doing that would give us some more strategic.
Strategic advantages in terms of attracting customers to the platform, but you know.
Again, we're we're pretty pretty excited we're only a few months into into the journey with showcase, but it's a pretty exciting.
Platform.
Yeah on the surface it looks like Theres, a lot of leveraging components without platform that can open up new revenue streams and it'd be really good for the overall agent value proposition.
So my last question before turning it over to since unit and the audience. Glenn you commented on this early on in your opening remarks.
But I think there's been a lot of buzz initially with the traditional I buyer model and we're starting to see some of the challenges with balance sheet risk and losses that come into play.
Yeah.
It seems that I kind of your your express offer platform is slightly different.
Yes, maybe just touching on how this is different and why it makes sense versus doing a traditional I buyer modeled route.
Yeah. So a couple of a couple of things one.
Obviously, they've got you know open door and Zillow offers are probably the two biggest players out there at the moment in the in the eye buyer space, they're both they both entered it for kind of different reasons I think open.
Open open door actually came into the business because they actually bought.
And believe that they could create a a marketplace, where you could actually sort of do it through a through a instance sale in an instant offer I think that's a they're a long ways from truly proving that that actually works or zillow entered it for upper a different use and they they entered it to sort of be able to generate leads for them.
Their agents.
And I think that you know that some level, they probably done that but they're taking a huge loss to do that we approached it from from a totally different perspective, because we wanted to develop a platform that generated leads for agents. But then you also did was backed up by a network of hundreds if not thousands of potential buyers who are.
You know in in either buying for their own investments, they're doing fix and flip they're doing different things but.
Not take any balance sheet risk and to basically provide multiple bids for multiple buyers.
Through a platform that we've built out and so that's the cool thing is is that so far that platform seems to really be be getting traction has been so we started on this initiative late last year.
We've spent most of this year sort of building it out getting getting it in place and now you know you go to express offers dot com and you see at least on the surface you can see.
Basis of the platform from a from a consumer perspective.
And on the backend.
But we are starting to generate a lot of listing weve for where everybody to actually put signs on the ground and have fully market listings and at the same time for those who want cash for kids. We have a number of transactions are going direct to home buyers, who are stepping up and paying.
The dollars that the seller is looking to take in the short run to not have to have their house on the market. So I think those are really scalable platform I think that once it's entirely built out and we've got lots of additional plans with this platform. We think it could represent a pretty significant percentage by our markets.
Again without the balance sheet risk. So we're pretty excited about it we think it's got a lot of a lot of potential and we think that you know it it could be a game changer in the industry and one that I think we're already starting to see some people sort of copy a little bit of our approach that you know we started with which was sort of you know.
Aggregating buyers on the back end, so I think we'll see some copycats, but we've we've never and as part of the reason why our financial that are the way. They are we've never really taken a lot of balance sheet risk on anything because I think there's lots of creative ways to solve problems and that's just the way we've always approached.
Yet another tool that you guys have in your Belton.
Much appreciated by everyone on your platform. So that is that is everything I wanted to cover I think right now just in the next couple of minutes to touch on some of the questions that have come in.
The first one really being directed at at Michael probably what international market is seeing the best traction so far and further to that what's the most likely catalyst for one of your international markets just completely taking off is it just a function in time or something else.
That's a great question I think that by far our from our current footprint, It's our Canada operations.
We're probably at about 1600 agents now really incredible growth trajectory. There continue to do so we've attracted some incredible teams.
Just attracted one of the largest teams from a competitor of ours in Canada. He was.
At a 23 member team had about $400 million in production.
We have getting a lot of attention with our with our platform and so Canada is doing incredibly well and what were looking at for some of the newer countries that were looking at expanding and I think that from some of our early.
Interest as I mentioned before both Mexico, and India seem to have a really really large amount of promise for us in the early stage.
Great.
And the next question is.
Highly requested question probably for you going back to her Bela.
Do you think barbella can be a standalone company.
Yeah. So it's a it's a great question you want things and I'll, just kind of give you a little bit of insight on it.
Her Bela we've we've been looking at we actually did look at earlier this year the potential of spending out for Bell has as a Standalone company. What we found at least in the short run because we think that rebel does truly stand on its own we think that if rebel and PXP or were some.
But we think that even from a shareholder perspective, there'll be more value unlock for shareholders because of the two entities.
Part because there's some people who are very much virtual world per business remote work technology based investors and that Doesnt may not be the same investor group, that's interested in in real estate brokerage and even though its were enabled by the pergola platform.
But what we found is at least in the short run there's some pretty significant tax implications to being able to spit out as its own Standalone company. So were still researching we'd love to be able to.
Have verbally a pure play just like the XP was originally.
In its early days, a pure play in cloud based residential real estate brokerage and we think that that you know pure play has.
Potentially more value as a separate company, but today, we don't have a have a path quite yet to get there.
Sure that makes sense and I think just in essence, the time, we'll take one more.
Can you talk about or quantify the agent retention trends in the dynamic between gross versus net agent adds.
Jeff you want to take Texas, Yeah early.
Early yes as we.
If you look at our agents on what we're seeing is we're seeing over the last two quarters.
Actually increased our retention rates by 30% in each quarter.
We don't we don't break out all our AD. We we don't go through the details of how many came in this month's here's how many went off but what I can tell you is that our.
Our our retention has improved by 30% in Q2 and Q3.
So we're we're pretty pretty excited about that Greg.
Well I'm excited for you guys and.
I think with that we should wrap it up I would like to thank you, Jeff Michael in Glen for the Fireside chat today and I think congratulations to you all in every single year agent, who are having just been absolutely blow out quarter in terms of.
Revenue and profitability.
So with that I think we can ramp to assess you know.
Thank you.
Thank you and thanks, everyone. Appreciate it thank you very much.
[noise].