Q4 2024 Douglas Elliman Inc Earnings Call

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Operator: Welcome to Douglas Elliman's fourth quarter and full year 2024 earnings conference call. This call is being recorded and simultaneously webcast. An archived version of the webcast will be available on the investor relations section of the company's website located at investors.elliman.com for one During this call, the terms Adjusted EBITDA and Adjusted Net Income or Adjusted Net Loss will be used. These terms are non-GAAP financial measures and should be considered in addition to, but not as a substitute for, other measures of financial performance prepared in accordance with GAAP. Reconciliations to adjusted EBITDA, adjusted net income, and adjusted net loss are contained in the company's earnings report.

Speaker Change: Welcome to Douglas elements fourth quarter and full year 2024 earnings Conference call. This call is being recorded and simultaneously webcast. An archived version of the webcast will be available on the <unk>.

Speaker Change: <unk> relations section of the company's website located at investors don't element dot com for one year.

Speaker Change: During this call the terms adjusted EBITDA and adjusted net income or adjusted net loss will be used. These terms are non-GAAP financial measures and should be considered in addition to but not as a substitute for other measures of financial performance prepared in accordance with GAAP reconciliations to adjusted EBITDA adjusted net income and adjusted net loss or <unk>.

Speaker Change: And in the company's earnings release, which has been posted to the Investor Relations section of the company's website.

Operator: which has been posted to the investor relations section of the company's website.

Operator: Before the call begins, I would like to read a Safe Harbors statement. The statements made during this conference call that are not historical facts are forward-looking statements that are subject to risks and considerations. that could cause actual results to differ materially. from the set forth or an implied by forward-looking statement. These risks are described in more detail in the company's Securities and Exchange Commission filings.

Speaker Change: Before the call begins I would like to read a safe Harbor statement statements made during this conference call that are not historical facts are forward looking statements that are subject to risks and uncertainties that could cause actual results to differ materially.

Speaker Change: From those set forth or implied by forward looking statements. These risks are described in more detail in the company's Securities and Exchange Commission filings now I would like to turn the call over to Chief Executive Officer of Douglas Elliman, Michael S level Blitz.

Michael S. Lebowitz: Now, I would like to turn the call over to Chief Executive Officer of Douglas Elliman, Michael S. Lebowitz. Good morning and thank you for joining us. First, I am proud to report on the progress we have made since I was named Chief Executive Officer of Douglas Elliman in October as we lead this story company through an exciting new chapter.

Speaker Change: Good morning, and thank you for joining us.

Speaker Change: I am proud to report on the progress we have made since I was named Chief Executive Officer of Douglas Elliman.

Speaker Change: In October as we lead this company through an exciting new chapter with me today on the call is Brian Kirkman Chief Financial Officer on today's call. We will discuss the current operating environment and Douglas elements financial results for the three months and year ended December 31, 2024, all numbers presented this morning.

Michael S. Lebowitz: With me today on the call is Brian Kirkland, our Chief Financial Officer. On today's call, we will discuss the current operating environment and Douglas Elliman's financial results for the three months and year ended December 31, 2024. All numbers presented this morning will be as of December 31, 2024 unless otherwise stated.

Speaker Change: We'll be as of December 31, 2024, unless otherwise stated we will then provide closing comments and open the call for questions.

Michael S. Lebowitz: We will then provide closing comments and open the call for questions. Before we turn to our fourth quarter 2024 results, I would like to start by summarizing the value we are creating at Douglas Elliman. We are building momentum. Our revenues increased in the fourth quarter of 2024 by 13.6% from revenues in the fourth quarter of 2023. Our cash receipts in January and February of 2025 were approximately 30% more than cash receipts in January and February of 2024. Our agents and employees are energized as we lead Douglas Elliman into a new era. We were honored once again to be ranked as the most trusted real estate brokerage in 2025 by Life Story Research and independent research firm.

Speaker Change: Before we turn throughout the fourth quarter 2024 results I would like to start by.

Speaker Change: Summarizing the value we are creating a service element we are building momentum our revenues increased in the fourth quarter of 2024 by 13, 6% from revenues in the fourth quarter of 2023.

Speaker Change: Cash received in January and February of 2025 were approximately 30% more in cash receipts in January and February of 2000 and for our agents and employees are energized as we lead Douglas elliman into a new era. We were honored once again to be ranked as the most trusted real estate brokerage in 2025.

Speaker Change: Lifestyle research an independent research firm.

Michael S. Lebowitz: This ranking underscores the power of the Elliman brand.

Speaker Change: This ranking underscores the power of the element brand.

Michael S. Lebowitz: providing our agents. Building on this trust and the power of our name, we are executing a strategic plan to continue to expand our revenue base with growth initiatives focused. on Recruiting and International Expansion, and we will be mindful of reducing costs as we now analyze all investments and ensure they achieve our Internal Return on Investment Target. A newly created strategic M&A and business development unit continues to explore complementary acquisitions and ancillary businesses to analyze investments to ensure they achieve ROI targets. the initiatives are transforming Douglas Elliman into a company with a diversified revenue stream and a sustainable growth engine and an industry leader thriving innovation and technology.

Speaker Change: Providing our regions building on this trust and the power of our name we are executing our strategic plan to continue to expand our revenue base with growth initiatives focus.

Speaker Change: On recruiting and international expansion, and we will be mindful of reducing costs as we now analyze all investments and ensure they achieve our internal return on investment targets.

Speaker Change: Our newly created strategic M&A and business development unit continues to explore complementary acquisitions and ancillary businesses to analyze investments to ensure they achieve ROI targets. The initiatives are transforming Douglas elliman into a company with diversified revenue streams and a sustainable growth engine.

Speaker Change: And an industry leader driving innovation and technology with that I will turn it over to Brian who will discuss our performance and the trends shaping the residential real estate industry.

Brian Kirkland: With that I will turn it over to Bryant who will discuss our performance and the trend shaping the residential real estate industry. Thank you, Michael and the management. Thank you, Michael, and the management team remains focused on Douglas Elliman's transformation. We are confident that the improvement and financial results that began in the second and third quarters of 2024 is positioning Douglas Elliman for long-term success. The fourth quarter results indicate our core operations are beginning to benefit from the expense reductions management has implemented, as well as the significant investments made in our development marketing to begin with.

Brian Kirkman: Thank you Michael and the management.

Brian Kirkman: Thank you Michael and the management team remains focused on Douglas elements transformation.

Brian Kirkman: We are confident that the improvement in financial results that began in the second and third quarters of 2024.

<unk> is positioning Douglas elliman for long term success.

Brian Kirkman: The fourth quarter results indicate our core operations are beginning to benefit from the expense reductions management has implemented as well as the significant investments made in our development marketing Division.

Brian Kirkland: Before reviewing the financial performance, we will provide some updates on trends in home sale pricing and development marketing, as well as accolades earned in some of our key markets. First, Pricing for home sales remains strong. In the fourth quarter, our industry best average price per transaction rose to $1.64 million per home sale compared to $1.58 million per home sale in the comparable 2023 period. For the year, our average price for transaction is $1.67 million per home sale, compared to $1.59 million in the 2023 period. We believe these data points are illustrative of Douglas Elliman's expertise in the luxury and ultra-luxury residential real estate markets that we are proud to serve.

Brian Kirkman: Before we.

Brian Kirkman: Reviewing the financial performance, we will provide some updates on trends in home sell pricing and debello up marketing as well as accolades earned in some of our key markets.

Brian Kirkman: First <unk>.

Brian Kirkman: I think for home sales remained strong.

Brian Kirkman: In the fourth quarter, our industry best average price per transaction rose to $1 $64 million per <unk> compared to 1.58 million per home sell in the comparable 2023 period.

Brian Kirkman: For the year, our average price per transaction is $167 million for home sell compared to 159 million at the 2023 period.

Brian Kirkman: We believe these data points are illustrative.

Brian Kirkman: Douglas elements expertise and a luxury and ultra luxury residential real estate markets that we are proud to serve.

Brian Kirkman: Socket.

Brian Kirkland: Our Development Marketing Division remains the preeminent industry player with a pipeline of actively managed projects of approximately $27.7 million in gross transaction value. Approximately $18.1 billion of gross transaction value is in Florida alone. In addition to this active pipeline, we have another $5 billion of gross transaction value coming to market through March 2026. We believe this foundation of business bodes well for the future as we will recognize commission income from these projects when they close, which is generally between 2025 and 2029. We have already begun to see the momentum of this pipeline in the fourth quarter of 2024 when development marketing's revenue increased to $25.5 million from $9.5 million in the 2023 fourth quarter.

Brian Kirkman: Our development marketing Division remains the preeminent industry player with a pipeline of actively managed projects of approximately $27 7 million and gross transaction value.

Brian Kirkman: Ultimately $18.1 billion of gross transaction value is in Florida alone.

Brian Kirkman: In addition to this active pipeline, we have another $5 billion of gross transaction value coming to market through March 2026.

Brian Kirkman: We believe this foundation of business bodes well for the future as we will recognize commission income from these projects when they close which is generally between 2025 and 2029.

Brian Kirkman: We have already begun to see the momentum of this pipeline in the fourth quarter 2024.

Brian Kirkman: All of them up marketing's revenue increased to $25 5 million.

Brian Kirkman: About $9 $5 million into 2023 fourth quarter.

Brian Kirkland: Third, Many of our brokerages continue to outperform their peers. We were recently named number one brokerage by sales volume on Long Island in the Hamptons and in 2024 eclipsed sales records in Aspen, North Miami and on the North Fork of Long Island.

Brian Kirkman: Third.

Brian Kirkman: Many of our brokerage has continued to outperform their peers.

Brian Kirkman: We were recently named number one brokerage by sales volume on long island in the Hamptons and in 2024 eclipsed sales records in asthma in North Miami, North Fork of long Island.

Brian Kirkland: Transitioning to updates on our expense structure. We continue to manage investments across our markets by focusing on return on investment. In 2024, we reduced our operating expenses by $19.7 million from 2023 after excluding commissions. appreciation and amortization, unusual litigation settlement and related expense, restructuring expenses and non-cash stock compensation expenses.

Brian Kirkman: Transitioning to updates on our expense structure.

Brian Kirkman: We continue to manage investments across our markets by focusing on return on investments.

Brian Kirkman: In 2024, we reduced our operating expenses by $19 $7 million from 2023 after excluding commissions.

Speaker Change: Depreciation and amortization.

Speaker Change: Unusual litigation settlement and related expense restructuring expenses and noncash stock compensation expenses.

Speaker Change: Now.

Brian Kirkland: Turning to Douglas Elliman's financial results for the three months ended December 31st, 2024. Douglas Elliman has maintained ample liquidity. with cash and cash equivalents at December 31st, 2024 of approximately $135 million. as well as investments in U.S. Treasury securities of another $10 million for a total of $145 million. Historically, the first quarter is usually cash flow negative because of the seasonality of our business and the timing of annual cash bonuses which are paid in March. However, the decline in cash and investments in 2025 to date has been significantly lower than previous years because of the increase in January and February cash receipts compared to 2024.

Speaker Change: Turning to Douglas elements financial results for the three months ended December 31 2024.

Speaker Change: Douglas Elliman has maintained ample liquidity.

Speaker Change: With cash and cash equivalents at December 31, 2024 of approximately $135 million.

Speaker Change: As well as investments in U S Treasury securities on the <unk>.

Speaker Change: Another $10 million for a total of $145 million.

Speaker Change: Historically the.

Speaker Change: The first quarter is usually cash flow negative because of the seasonality of our business and the timing of annual cash bonuses, which are paid in March.

Speaker Change: However, the decline in cash and investments in 2025 to date has been significantly lower than previous years.

Speaker Change: Because of the increase in January and February cash receipts compared to 2024.

Brian Kirkland: I am pleased to report, after adjusting for the annual bonus payments, our liquidity remains strong with adjusted cash, cash equivalents, and investments totaling approximately $140 million as of March 10, 2025. The strength of our balance sheet provides a competitive advantage for Douglas Elliman as we implement the plan Michael has discussed earlier.

Speaker Change: I am pleased to report after adjusting for the annual bonus paid months, our liquidity remains strong with adjusted cash cash equivalents and investments totaling approximately $140 million as of March 2025.

Speaker Change: Strength of our balance sheet provides a competitive advantage for Douglas elliman as we implement the plan Michael has discussed earlier.

Brian Kirkland: Moving on to the operating performance of the business in DeForet. Douglas Elliman reported $243.3 million in revenues compared to $214.1 million in the 2023 fourth quarter. Net loss for the fourth quarter was $6 million, or $0.07 per diluted share, compared to $14.8 million, or $0.18 per diluted share in the 2023 fourth quarter. Adjusted EBITDA for the fourth quarter were a loss of $5.4 million compared to a loss of $16.1 million in the 2023 fourth quarter. Adjusted net income. in the fourth quarter was $2.4 million or $0.03 a share compared to adjusted net loss of $13.7 million or $0.17 per share in the 2023 fourth quarter.

Speaker Change: Moving on to the operating performance of the business in the fourth quarter.

Speaker Change: Douglas Elliman reported $243 $3 million in revenues compared to $214 $1 million into 2023 fourth quarter.

Speaker Change: Net loss for the fourth quarter was $6 million or seven cents per diluted share compared to $14 8 million.

Speaker Change: Or <unk> 18 per diluted share in the 2023 fourth quarter.

Speaker Change: Adjusted EBITDA for the fourth quarter were a loss of $5 4 million.

Compared to a loss of $16 $1 million into 2023 or fourth quarter.

Speaker Change: Adjusted net income.

Speaker Change: In the fourth quarter was $2 4 million or <unk>, a share compared to adjusted net loss of $13 $7 million or <unk> 17 per share into 2023 fourth quarter.

Brian Kirkland: Now turning to Douglas Elliman's financial results for the year ended December 31st, 2024. Douglas Elliman reported $995.6 million in revenues compared to $955.6 million in 2023. That loss attributed to Douglas Elliman was $76.3 million, or $0.91 per diluted share, compared to $42.6 million, or $0.52 per diluted share, in 2023. suggested EBITDA for the year ended December 31st, 2024 were a loss of $17.8 million compared to a loss of $39.9 million in 2023. Adjusted net loss for the year ended December 31st, 2024 was $24 million or $0.29 per diluted share compared to $40.1 million or $0.49 per diluted share in 2023.

Speaker Change: Now turning to Douglas elements financial results for the year ended December 31st 2024.

Speaker Change: Douglas Elliman reported $995 6 million in revenues compared to $955 $6 million in 2023.

Speaker Change: Net loss attributed to Douglas Elliman was $76 $3 million or 91 cents per diluted share compared to $42 6 million or 52.

Speaker Change: <unk> per diluted share in 2023.

Speaker Change: Adjusted EBITDA for the year ended December 31, 2024 were a loss of $17 8 million compared to a loss of $39 $9 million in 2023.

Speaker Change: Adjusted net loss for the year ended December 31, 2024 was $24 million or <unk> 29 per diluted share compared to $41 million or <unk> 49 per diluted share in 2023.

Brian Kirkland: Thank you for your attention and back to you, Michael.

Thank you for your attention and back to you Michael.

Michael S. Lebowitz: Thanks, Brian.

Michael S. Lebowitz: When we last when we last spoke in November, I told you that I took on the CEO role because I believe in the strength of the Douglas Elliman brand and its bright future. These results show we are performing extremely well and our best days ahead are ahead for this company.

Michael: Thanks, Brian when we last.

Brian Kirkman: When we last spoke in November I told you that I took on the CEO role because I believe in the strength of the Douglas Elliman brand and its bright future. These results show, we are performing extremely well and our best days are ahead for this company with that we will be happy to answer any questions operator.

Operator: With that, we will be happy to answer any questions. Operator. Thank you. And at this time, if you would like to ask a question, please press the star and one on your telephone keypad. You may remove yourself from the queue at any time by pressing star two. Once again, that is star and one to ask a question and we will pause for a moment to allow questions to queue. And as a reminder, that is star and one to ask a question. Pausing for another brief moment to allow questions to queue. And I am seeing no questions today.

Speaker Change: Thank you and at this time, if you would like to ask a question. Please press the star and one on your telephone keypad you may remove yourself from the queue at any time by pressing star Q. Once again that is star one to ask a question and we will pause for a moment to allow questions to queue.

Speaker Change: And as a reminder, that is star and one to ask a question pausing for another brief moment to allow questions to queue.

Speaker Change: And I am seeing no questions today. Thank you for joining us on Douglas elements quarterly earnings Conference call. We hope you have a.

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

Speaker Change: Good day, and this will conclude our call.

Speaker Change: Thank you.

Speaker Change: Thank you.

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