Q1 2023 eXp World Holdings Inc Earnings Call
Speaker 1: The Sanford, Founder, Chairman, and CEO of EXP Worldholdings and CEO EXP Realty. Followed by a review of the first quarter, 2023 financial highlights presented by Jeff Weisside, CFO , and Chief Collaboration Officer of EXP Worldholdings.
Speaker 1: Following our prepared remarks, we'll open the call to Q&A session with EXP World Holdings covering analyst and questions submitted to EXP.
Speaker 1: But first, let's begin with a review of the forward-looking statement.
Speaker 1: There will be a number of forward-looking statements made today that should be considered in conjunction with 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. These forward-looking statements are based on assumptions as of today, May 2, 2023.
Speaker 1: and the company undertakes no obligation to revise our updates. Please see our filings with the FCC, including our most recently filed quarterly report on form 10Q for a discussion of specific risks that may affect our business performance and financial condition. As a reminder, today's call is being recorded and a replay will also be made available on EXPworldHolibings.com.
Speaker 1: Now, for a few logistics and we'll get started. For those of you joining the EXPI campus today, to see all three screens, hit the stage zoom button to the right of your chat box. To zoom into a specific screen, you can hit the plus icon above that screen. You happen to see no slides or a gray slide, hit the refresh icon on the top right-hand corner of that screen to connect. While an EXP's campus,
Speaker 1: Should you need any help or have questions, please enter your comments in the chat box at the bottom on the left and a member of the team will contact you.
Speaker 1: With Slydo, should you wish to ask a question during our presentation, you can enter your questions by scanning the QR code presented on the screen. With your phone or or go to Slydo.com and type in the event code EXPI. From there, you can submit a question or vote up an existing question by giving a thumbs up.
Speaker 1: If you'd like, if you'd also like that question to be asked, this screen will remain up on the left hand side of the stage.
Speaker 1: Now, I'll turn the fire side chat over to Glenn and Jeff before opening the call to questions.
Speaker 2: Awesome. Thank you, Denise. And thank you, everyone, for showing up today. We just finished our year-end report just a little over a month ago. So today's going to be a little bit of an update relative to Q1.
Speaker 2: One that we'll talk about the most today is EXP Realty because that of course is what got this started about 13 and a half years ago. And so we'll talk about a lot of the stats there. We'll touch briefly on success. You know, it's the personal development brand.
Speaker 2: We've just added a new CEO to that brand, Amy Somerville, who has a phenomenal background coming from both RE-MAX, a Bethany company, and prior to that, she actually has a degree in journalism, so it's a nice fit for her, and she's been doing a phenomenal job since she's joined us there. Just a great job. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Speaker 2: couple months back and and verbela. Of course, this is a verbela campus, one of many that verbela hosts on behalf of clients. We've of course bought verbela back in 2018 and this is the enterprise version of the metaverse, but we also have a web based version.
Speaker 2: I add frame VR.io, which I encourage all of you to take a look at because I think that's where a lot of the future is the metaverse on the web and we're doing a lot of great things there. So let's just kind of jump into some initial highlights for Q1. We did...
Speaker 2: grow over 87,000 agents in the quarter, which represents a 12% year over year growth for the year. Really, our big thing, and you hear me say this all the time, is we really are focused on the agent value proposition. And we say that because at one point
Speaker 2: I was an active agent in the field with the same struggles that agents go through and there wasn't a real estate broker to really met the needs that I recognized for myself. And that's what put us on the path of building EXP Realty. International is actually growing quite rapidly. You'll see and you certainly can note in both the financial statements and the press release, but international has been growing at a rapid rate with 52% year over year revenue growth. We've got our retention strong.
Speaker 2: The agents that we do lose, almost half of them are agents who have done zero transactions. And that's worth noting, our biggest attrition is in the category of zero to two sales a year. And that makes about 75% of all of our attrition. If you talk about the turnover with our investments and buy-in or retake these generation pageant rate schemes,
Speaker 2: We may touch on a little bit later if we get some questions, but we've got a little bit of a breakdown of that cohort by different segment. We were seeing a lot of brokerages and agent teams joining EXP and will also you'll highlight a few of them. There was a press release put out earlier today.
Speaker 2: It was nice to see that even in what's historically the worst quarter of the year, we were able to actually have a little bit of net income and our adjusted EBITDA was positive. So a lot of good things going on in the quarter just from sort of a top level perspective. And all this really comes down to, you know, how do we focus on the agent value prop. So with that, let's go into the next slide. The.
Speaker 2: This last year, and of course this plays out into Q1 especially, because interest rates really started to go up and late Q1, early Q2 last year. So that's when interest rates started to really kick up.
Speaker 2: And that has put a drag on the housing market, significant drag so much so that real estate size in the quarter, depending on the data, and we've got some...
Speaker 2: footnotes here as to where the data came from. But you know, transaction sides were down about 25%. year over year for Q1. The agents in the industry are down about point 3%. So not a huge amount, but there's a lot of agents who are still members of NAR but have effectively opted out. So I believe that that number is actually larger than point 3%.
Speaker 2: One of the things we've talked about in the past and really the last year or so, we've talked about the fact that in a down market, we believed we would pick up market share and we wanted to switch the focus from just pure growth to market share growth just given the backdrop of what we thought 2022, early 2023 would look like. Our transaction sides were down about 16%, but our market share relative to transaction sides we believe is around 4.1% plus or minus, which means that our market share grew about 11.6% last year.
Speaker 2: will be in great shape to reap the rewards of a much improved market. So let's go ahead and go to the next slide. And this next slide is really just a little bit more of what you saw maybe in the press release earlier today. We've got a lot of top teams and brokerages that are continuing to join us. And this is just a bit of highlights for that, but if you're subscribing to any of the real estate publications, it's hard not to notice the fact that eXp continues to grow its market share.
Speaker 2: whether it be signs on the ground in local neighborhoods or whether it be in the press. And some more of the press accolades are on the next slide, which this year, the real trends, which does a lot of this trends reporting, we've been doing it for many, many years.
Speaker 2: EXP rank number one in four categories, number of sides, top mover and sides, top mover and volumes, and the top independent brokerage.
Speaker 2: One that we haven't really focused on in the past, but is one that's worth noting, is the Direct Selling News, which is a publication that's primarily focused on the direct selling industry. We have got a bucketed there.
Speaker 2: into their tracking because of the unique way that we comp real estate agents we actually give the agency ability to attract other agents into exp and earn income as if they were the broker owner without having to put up all the market the capital in order to grow their business
Speaker 2: And that's akin to direct selling or network marketing. And so as a result, this last three years in a row, we've been recognized as the fastest growing company using a direct sale style comp model.
Speaker 2: for our independent contractors. And so we've, you know, it's a nice award to have. But the one we're most proud of is the glass door award.
Speaker 2: Six years in a row, we've been ranked in the top 100 best places to work. Last year, 2022, we were actually ranked in the top five, which is an incredible ranking. And for those of you who follow Glassdoor and long-term performance of companies that have high Glassdoor scores, we've been ranked in the top five.
Speaker 2: It's good company to be in, especially when you think about it from a perspective, a long-term shareholder. One quote that's also unique on this slide is the one that Steve Murray gives. It's notable that EXP was the only one of top form firms that grew both its close transaction sales volume in 2022. And of course we're seeing.
Speaker 2: that market share continue to grow.
Speaker 2: So with that, we want to just talk a little bit about some of the innovations that we're working on. Some of these you've heard about, some of the focus you've heard about in the past, our focus on NPS is a big one for us. We've been focused on NPS as a key performance indicator since 2015-2016 when we introduced it to the company.
Speaker 2: at large. And this last year especially, our teams have really picked it up across the organization in multiple different areas. And so we've got more areas of the company that are ranked at a 70 or higher, which is a number that we've used historically.
Speaker 2: to recognize if we're at a 70 or above, things are going really well. And so we're at about a 70 on our global agent, Net Promoter Score, and we are actually bringing Fred Reicheld, the author of the Net Promoter Score.
Speaker 2: And a more recent book winning on purpose to our Sheryl, there's some at here later on this month.
Speaker 2: In terms of products and support, we did a press release earlier this year talking about a partnership that we put together with Realty.com with some exclusive benefits.
Speaker 2: But we now have over 10,000 qualified leads each month going into hands of EXP agents. And we're working with Realty.com to help them grow their footprint, but also in relation to our exclusive partnership benefits.
Speaker 2: Additionally, they've introduced coaches and trainers that are actually supporting EXP agents over and above just supporting and managing the existing lead flow. So we're getting some great partnership benefits that are helping all EXP agents excel and we're continuing to work on that partnership to expand it.
Speaker 2: and with the exprilty.com. We'll be talking about a couple things here and just over little over two weeks that we're really excited to share around some of the innovations that we're doing on the portal side of the business. I mentioned that we were we
Speaker 2: I had a lot of connection to it while she was at Remax and now really doing some great things over the last 30, 60 days that she's been with us on the success side. So we're excited about that. But the new thing that we're doing here on this slide is we're introducing EXP Ventures. And EXP Ventures is a internal venture fund that we're putting together where we're investing in strategic and synergistic products and services that we believe are going to be good into the future. And so we're formalizing that. Kyle Kittleson and our team is.
Speaker 2: has been evaluating many different products and services over time, but we're actually turning that into its own division where it's going to actually be seeking out those products and services, especially at these valuations, we think are going to bode well.
Speaker 2: financial highlights for Q1. All right, Glenn, thank you very much. I appreciate it. Thank you, Glenn. Thank you, Denise. I think one thing you didn't mention, Glenn, was the new avatars that we have, the new look. I know a lot of people were looking for my green, but we really like the baby blue. So thanks to Alex and the team for that. You know, the campus is in great shape. So what I'd like to do today is on the first slide, and I'll review our Q1 highlights, followed by segment results.
Speaker 2: and results on a consult databases, starting with the highlights for the quarter, at the world holding level, our revenue.
Speaker 2: was $850.6 million. We did decrease 16% compared to last year. This was due to both the transactions and average selling prices decreasing year over year. I gross profit decreased by 12%.
Speaker 2: but the margin improved by 33 basis points, 8.6%. We generate a positive net income, as Glenn mentioned, of 1.5 million. We generate adjusted EBITDA at 13.3 million and operating cashflow of 38.8 million. As we discussed when we began segment reporting in Q4.
Speaker 2: The XP North America represents a majority of total revenue at 98% and North America realties revenue also decreased 16% as quarters. So that's, you know, it's most of the revenue we have. We have the North American realties revenue, you know, as the one pointed out, it is lower, but as we compare it to the marketplace, we decreased a lot less than the marketplace did and I got some stats on that. It's the one thing that did happen as one mentioned as that even though there was a decrease in transactions.
Speaker 2: We also had an increase in share gain and positive EBITDA, which reflects the resiliency in the model in the Dow market. So international this quarter, growing revenue at 52%. We had strengths in companies like South Africa, Australia.
Speaker 2: the UK, and record quarterly revenues in Portugal and Spain. So I'll review the Q1 financials for each segment on the next slide, please.
Speaker 2: As a reminder, we started breaking out segment financials in Q4 2022. On this slide, you can see that our Q1 2023 segment revenue and adjusted EBITDA for each of our four business segments and a breakout of corporate allocations.
Speaker 2: Our North American Realty segment is again the primary driver of revenue at $837 million and adjusted EBITDA of $21.2 million.
Speaker 2: So, despite a very challenging environment in the first quarter, North American revenue declined only 6% year-over-year versus an industry-wide sales decline of 25%.
Speaker 2: very challenging environment in the first quarter. North American revenue declined only 6% year over year versus an industry-wide sales decline of 25%. North American realty remit profitable.
Speaker 2: International Reality had a record quarter increasing revenue by 52% to $10.8 million. Verbella increased revenue by 19% and improved its even a loss by approximately $1.5 million when he compared the last year of this time. Our other segment, which is primarily success, grew revenue at 100%.
Speaker 2: And while improving EBITDA losses year over year, and so overall, it was an extremely challenging quarter for the entire industry, and the segments did perform, and especially the powerhouse that we have in the North American side performed very well in this particular market.
Speaker 3: On our next slide, I'll review financial details on a consolidated basis.
Speaker 3: So we maintain a strong agent NPS is going to mention at 70 and age account increased 12% the prior year revenue increased decreased minus 16%. Gross margin dollars decreased minus 12% due to lower transaction volume and lower price a gross margin percentage increased 4% or 33 basis points year over year.
Speaker 3: SNA cost decrease to a slowdown in hiring as one mentioned. So this is in previous periods and a reallocation of aging growth incentive stock compensation expense.
Speaker 3: The commissions and other agent related costs.
Speaker 3: emissions and other agent related costs. Net income was a positive 1.5 million.
Speaker 3: generate 13.3 million of adjusted EBITDA. Our operating cash flow was $38 million, and we ended the quarter with $122 million of cash and cash equivalents.
Speaker 3: So on my final slide that I had for the first quarter, what we see is just taking a step backwards and, you know, I really like to look at what the company's accomplished from a historical perspective.
Speaker 3: We're growing our agents and our revenue consistently since 2017. The chart reflects how recent market conditions have impacted revenue, which we expected in this quarter, but we continually increased the eXp agent count, which grew 12% year over year this quarter. We continue to generate positive cashflow with zero debt on the balance sheet.
Speaker 3: and a very healthy cash balance. So with that, I'll turn that back over to Denise and for Q&A. Thanks Jeff. I'll kick off with a question for Glenn before we open up the call to our covering analyst.
Speaker 1: First, Glenn, can you share your thoughts on your first quarter back and see it EO of EXT and what you're hearing from agents about the broader market? Yeah, so January 3rd came back as in the role of CEO . It definitely has been a role of the sleeve, especially at first two and a half months.
Speaker 2: I'm just reorienting the agent-centric model a little bit. Just obviously every CEO is going to have a slightly different focus. And you know, one of the things I'm hearing not as much.
Speaker 2: negative in the marketplace from an agent perspective relative to sales volumes, part of it's probably seasonal because March is historically the beginning of the selling season. So those who were feeling it taking on the chin last year through the mid year and the summer and the fall, they've adjusted to new normal. So.
Speaker 2: I believe that we're now fully into the new normal in terms of sales volumes and those types of things. So now it will be more of a steady growth, I think, once we get into, especially Q3, Q4, like we start to see year-over-year growth rates as my guess. And I think agents are starting to pick that up as well.
Speaker 3: of revenues. So that kind of explains, I guess, the lower gross margin sequentially. But maybe if you could help quantify that impact and help us get a better grip on what that, I guess, under the prior accounting with that OPEX would have looked like this quarter up to last. Yeah, so we're talking about a...
Speaker 3: Year over year, John , it was approximately about $7.8 million. So that was a difference quarter over quarter.
Speaker 3: That was the change. And it's just, I mean, what's happened is that, you know, it's just looking at, you know, how to classify different accounts. We do this on a relatively regular basis, and this is just a change we decided to make as a company. Okay. Makes sense. And then Glenn, I saw the press release this morning where you guys were highlighting.
Speaker 3: you know, as far as making that switch, is, you know, is there anything new in the eXp model that kind of drove that decision to make the move now?
Speaker 4: other models. So there's some opportunistic moves as well. Okay, that's great. Thanks Glenn. Thanks Jeff. John , we'll take our next question from Tom White from DA Davidson. Great, thanks for taking my question. Love the snazzy new avatars. Maybe just a follow up on the G&A kind of OPEX question. I guess even adjusting for that reclass, it's still a very kind of nice down tick quarter over quarter in G&A. I realize you guys kind of...
Speaker 4: want to remain nimble and flexible and if you see interesting kind of investment opportunities, you know, you may move quickly, but just can you help us think about like the durability or like, you know, it's just kind of a good level to think about over the next few quarters and in terms of modeling and then
Speaker 4: and kind of give an update on what's happening there.
Speaker 3: Yeah, I mean, I can take the question on the SGA. So, yeah, as you're aware, I mean, we didn't go into like a full cut all the costs type thing. We wanted to support our agents. We wanted to invest and we did. Okay. But we did recognize the downturn halfway through last year. Slow down the hiring. Okay.
Speaker 3: And so, but what we do see, as Glenn mentioned, I mean, we do see it coming back. So as you know, we don't know exactly when that's going to happen towards the end of the year is kind of what the forecasts are kind of looking like. So those numbers will go up, but I don't think they're going to go up dramatically, Tom, over the year. But again, you know, as we've said from the get go, if we see opportunity to make the investments
Speaker 3: in staff and support and NPS, we're going to do that. But I think we are seeing a pretty good effect of adjusting last year. And also, I think when you look at this SASH-GNA number now too, it's probably a better representation of what we're really spending in the business to run the business.
Speaker 3: So, and that will be like that going forward.
Speaker 2: Yeah, and relative to success lending, one of the things that, you know, obviously saw Interfrag go up, that's the big drag on the housing market. We're
Speaker 2: I think that lending's full in a little bit of a challenging spot, but I feel like we're at the turning. We're going to turn the corner here in the next quarter, probably by two three.
Speaker 2: to start to actually see it actually be accretive to EXP. Right now it's a little bit of an expense item while we're building out the nationwide infrastructure. And we started it at what could be considered the right time or the wrong time depending on how you look at it.
Speaker 2: but we're well positioned to be able to actually start to get benefits. But we're running loans through it to the other 30, 40, 50, maybe 100 loans going through it a month, depending on the month. And so I expect that's going to just continue to grow. And as we get toward the end of the year.
Speaker 4: We expect that there's could be more uptake into those services. Okay, maybe squeezing one last one if I could. You know, in the press release and also in the kind of the presentation, Glenn, you know, you touched on kind of iterating on the agent value prop and.
Speaker 4: It sounds like at least for this year and kind of given the market backdrop, what you're kind of really talking about there is trying to drive more leads and just help these guys generate more business via leads and partnerships and that way. I guess if you look out like two or three years...
Speaker 4: and think about all the different things that kind of go into the agent value prop from leads to technology to just like the compensation model. Where do you see, you know, what do you think kind of the most likely areas that are likely to see kind of meaningful.
Speaker 4: kind of evolution or improvements, you know, in terms of ways for you guys to add value to agents, you know, kind of across those buckets, maybe. Yeah, so, well, first and foremost, obviously, lead gen is going to be the thing that's going to be most meaningful for agents.
Speaker 2: We're in a unique.
Speaker 2: backdrop in that, you know, we didn't mention it yet in this call. So I'll just mention it because we're not talking about AI, we're probably missing the ball. We just ended up having an offsite last week where we were looking at, you know, how is AI going to impact our business and could it.
Speaker 2: bring the cost to operate down. And we think that would be the case long-term. So as we look at different technologies, and if we can drive down the costs of the brokerage, then there's in theory opportunities to drive down some of the costs from an agent perspective while providing the same.
Speaker 2: or better benefits. So that's kind of the way we're thinking about it. One of the other conversations, and this is so you kind of at least know what's in my head, I think about long-term enterprise value being, to some extent, market share driven. And so for us, it's still very much of how do we continue to build this.
Speaker 2: to get to a more meaningful market share so that, you know, in a number of years we'll be able to look back and go, you know, we did get to whatever the number is 500,000 agents or more worldwide. And so part of it is making sure that our value prop does, in fact, attract agents while not
Speaker 2: fundamentally losing money as a company to get there. Then we think once we get to, again, what we call worldwide scale, we're investing international, that's our biggest investments in the business. But then there'll be a lot of opportunities for other opportunities for revenue. We see it as
Speaker 2: being all of the above over time, create more efficiencies, create better engagement, lead generation efforts, and then translating that into better economics for agents over time.
Speaker 4: Great, appreciate it. Thank you. Great. Thanks, Tom. We'll go to our next question from Matt Felix from William Blair. Hey, Glenn and Jeff. You have Matt Filek on for Steven Sheldon. Thank you for taking my questions.
Speaker 4: wanted to start with one on the international front. When do you think you could reach break even or positive adjusting a bit of there? Or the focus remained mostly on growth as we think about the next few years, given the size of the opportunity. Curious on how you're thinking about that? Yeah, so what we haven't done is we haven't broken out the...
Speaker 2: But at the same time, the UK, I believe, actually has to do filings in the UK, even as a company inside of eXp, where it's actually profitable, at least in some other countries that are close to or there already.
Speaker 2: So we think about internationals not being one big bucket. We think about it as there's a number of countries that are in that bucket. And each country is going to get to net profitability at different times. We want to just continue to
Speaker 2: invest and reinvest so we can eventually get to all of those countries. So we're really not focused on making international profitable as an overall group at any particular time, but more focused on the countries in that we do launch. Thanks.
Speaker 2: focused on can we get to those to profitability in 18 months or so, which is when the market was going strong, we believe that that was actually the time frame. Now it's probably a little bit longer, it's probably 24 months or so just in the current backdrop. But we still think that each country has a path to net profitability. the.
Speaker 2: and not a significant length of time. But we have, as may be noted, we haven't talked about it, but we haven't launched as many new countries lately. And part of that is actually to work on the formula, the international formula to get more countries to profitability quicker and figuring out what are the best practices that have been working. And then also
Speaker 2: just given the backdrop we slowed down just to be financially responsible with the with the money that we have in hand prior to going back into growth mode.
Speaker 5: Got it. Thank you. Very helpful color. In gears a little bit here, given the large professional development.
Speaker 5: that success coaching is addressing. Was wondering if you could talk about the monetization strategy there, longer term vision for success coaching, and what performance with that initiative has looked like so far.
Speaker 2: Yeah, so on success, I would say that with Amy joining us on the CEO role, I got firsthand visibility into what she's doing. She's rebuilding the entire.
Speaker 2: success ecosystem from the ground up. We have some partnerships and things that we're going to be announcing at shareholders for agent coaching initiatives and courses and all of that specifically for real estate and then we'll also be focusing on
Speaker 2: the broader personal development industry over time. But her specialty is real estate, real estate coaching and professional development. So that's where the first focus is gonna be and while still maintaining the more open brand of success to the larger personal development community.
Speaker 2: So it's still its early stages. I would say that probably by the end of Q2 when we have this conversation, I'll be able to provide you more color as to what's going on with success.
Speaker 1: That sounds great. We'll be looking forward to it. That's it for me. I'll jump back in the queue here. All right. Thanks, Matt. So now we'll move on to questions from the audience. But before I do, I'll repeat the instructions in case we have other folks that want to get onto Slido and ask a question. You can go to the further screen on the left and with your phone scan the QR code.
Speaker 1: the company repurchased approximately 29.9 million of common stock during the first quarter of 2023. Do we have a total share count repurchased? Just give me one second. I'll get on that if you want to just move forward a little bit.
Speaker 1: Yep, and again, if you'd like to ask a question, you can go to slido.com. Either by scanning the QR code on the upper left hand screen, or you can go or sorry, or the QR code in the upper left hand part of the screen or you can go to slido.com enter in the event code.
Speaker 6: E. X. P. I.
Speaker 2: Okay, any more questions from the covering analysts? Otherwise, obviously, we'll wait for Jeff's research.
Speaker 4: I can hop in there, Glent. Maybe I took a little bit about Zucasa and specifically...
Speaker 4: what the model there is.
Speaker 4: you know, in terms of lead gen, whether that's the kind of exact model that you envision kind of, you know, bringing here and, you know, is there an explicit kind of direct revenue opportunity for the XP world holdings? Or is it, you know, mostly about just, you know, generating leads for agents that
Speaker 4: Obviously, the company will benefit from if transactions get done, but I'm just curious whether there's also kind of an added revenue opportunity if you guys can kind of more directly monetize that with your agents. Yeah, there definitely is. So, when we purchased Zucasa last year.
Speaker 2: They were 150 agents, primarily in the Toronto, Ontario market area with a nationally recognized portal in terms of Canada. They ran it as basically a team. We were very involved in arhissement and
Speaker 2: and Cover had been 10 and other markets in Canada where they were generating leads but they weren't actually monetizing those leads. So the switch to the model has been to actually move these Zucasa agents into what has been referred to as Gen Pop or general population of expagias.
Speaker 2: out to those agents at the 35% referral, but they're also going to agents in other markets across Canada at a 35% referral. So we observe the cost of partner agents.
Speaker 2: that are actually joining the Zucasa referral network, and then they're able to receive these leads in a high accountability, high conversion-based infrastructure with coaching and training as well. And so now Zucasa is working on actually moving into the U.S., so Zucasa will be...? to.
Speaker 2: actually generating leads in different markets in the US. It'll actually create those same partnership opportunities where you can become a Zucasa partner agent and then be able to work those leads. This falls under a larger umbrella which we refer to as REVENOS, which is Leo Perea and others are involved in.
Speaker 2: where we're aggregating a large number of leads from lots of different sources. And Zucasa and our internal, what we refer to as inside sales agents team or ISA team, are having initial conversations, chat threads, et cetera, with prospective clients that are coming in from many different sources. So Zucasa has actually expanded its offering.
Speaker 2: from just the lead gen that they do through zucasa.com to also being lead cultivation in partnership with with some of our some of our different lead providers. So that's creating new revenue opportunities from a lot of these other services. So when we start to look at
Speaker 2: Zucasa, the other lead services, many of them were under NDA width, so I don't mention them by name in case I mention what I'm not supposed to mention. But we've got a number of lead source opportunities that are now funneling into our sort of back end of Zucasa. Let me drop that in because they do have their office while we talk to them on aRI, and send questions on thesc earn accelerated by this
Speaker 2: and the back end of sort of exp realty.com and pushing large numbers of leads, tens of thousands of leads a month that we're getting that we're putting into that overall ecosystem where we're generating a little bit extra revenue in managing that that lead flow on behalf of our agents.
Speaker 1: Great. Thanks, Len. We have another question from the audience, but wanted to let everyone know that the answer from Jeff regarding the number of shares we purchased in the quarter is in the chat, and it was 2.3 million. So, I'll go to a question from Anonymous.
Speaker 1: Will there be pin-up demand in Q4 and Q1 when the interest rate cycle hopefully starts trending down, the EXP might not be able to service due to cost cuttings?
Speaker 1: and Q4 and Q1, when the interest rate cycle hopefully starts trending down, the EXP might not be able to service due to cost cuttings.
Speaker 2: It shouldn't. You know, we did cut costs last year, for sure. And part of it is because we recognized that we were going to have a slower market. But the other side is that we've actually been, you know, hiring to keep up with demand. So we obviously have grown our staff when we were growing it.
Speaker 2: 30, 50, 100% year over year in the past. And we actually have a better team, better workflows. And we also now have a more global workforce as well. So we have a lot of sort of what we call back office functions.
Speaker 2: you know, are starting to be served in markets where we can flex up and down staff. We have the forward facing, agent facing staff, which is generally in the market that those agents are in. And then we have, you know, the ability to flex up and down with some of the more repetitive type activities, whether it be on the accounting.
Speaker 2: transaction calculations and other things. And then we're also, as mentioned earlier, we're looking at, you know, where does technology play a role or where does AI and machine learning play a role in helping us with scale as well? So I don't feel like we have, we'll have any issue. In fact, if you think about Q4, Q1 specifically.
Speaker 1: Great. All right, I'll move on to the next question from the audience. Chris Darin asks, is there any foresight on agent count for this year and or goals of the company to grow the number of agents at EXP for 2023?
Speaker 2: Yeah, so what we noted was obviously the market share gains and the numbers. You know, when you're when you're fighting the headwinds that we're fighting at the moment with agents either leaving the business or fundamentally leaving.
Speaker 2: And based on just our current trajectory, I mean, same numbers you're looking at as well, that might even be slightly optimistic for year-end, depending on how international goes. And Canada, we're on the verge of, I think, breaking over 6,000 ages. I think the international is really going to be where we get the most growth.
Speaker 2: in the balance in 2023, I think US has got the most headwinds. And so that's where we still think we'll grow, but it's not going to be as much as certainly we've done in past years. And so that's kind of where we're sitting. And it's time.
Speaker 1: Great. All right. Well, sorry we need to end it here, but I wanted to remind everyone that EXP Shareholders Summit will take place May 17th through 20th in Orlando, Florida. You can register at EXP Shareholders Summit to join us at the event. And as always, please stay connected by visiting expworldhollings.com for the latest updates.