Q1 2025 Douglas Elliman Inc Earnings Call
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Operator: Welcome to the Douglas Elliman's First Quarter 2025 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 An archived version of the webcast will be available on the investor relations section of the company's website located at investors.elliman.com for one year.
Welcome to the Douglas elements first quarter 2025 earnings conference call.
Is being recorded and simultaneously webcast.
<unk> version of the webcast will be available on the Investor Relations section of the company's website located at investors that element dot com for one year.
Operator: During this call, the terms adjusted EBITDA and adjusted net income or adjusted net loss as well as last 12 months metrics 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 and adjusted net income or adjusted net loss are contained in the company's earnings release which has been posted to the investor relations section of the company's website.
During this call the terms adjusted EBITDA and adjusted net income or adjusted net loss as well as last 12 months metrics 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 and adjusted net income or adjusted net loss are contained in the company's earnings release, 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 Harbor Statement. The 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 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.
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 from those set forth or implied by forward looking statements. These risks are described in more detail.
Speaker Change: The company's Securities and Exchange Commission filings now I'd like to turn the call over to the Chief Executive Officer of Douglas Elliman, Michael S. Leibowitz.
Michael Liebowitz: Now I'd like to turn the call over to the Chief Executive Officer of Douglas Elliman, Michael S. Liebowitz. Good morning, and thank you for joining us. I am pleased to share that Douglas Elliman continues to make meaningful progress as we execute our strategy to drive growth, improve profitability, and position the company for long-term success.
Good morning, and thank you for joining us I am pleased to share that Douglas Elliman continued to make meaningful progress as we execute our strategy to drive growth improve profitability and position the company for long term success with me on the call is Brian Kirkland, Chief Financial Officer.
Brian Kirkland: With me on the call is Brian Kirkland, our Chief Financial Officer.
Michael Liebowitz: On today's call, we will discuss the current operating environment and Douglas Elliman's financial results for the three months ended March 31, 2025. All numbers presented this morning will be as of March 31, 2025, unless otherwise stated.
Speaker Change: On today's call, we will discuss the current operating environment and Douglas Elliman its financial results for the three months ended March 31st 2025, all numbers presented this morning will be as of March 31, 2025, unless otherwise stated we will then provide closing comments and open the call for questions.
Michael Liebowitz: We will then provide closing comments and open the call for questions. Before we turn to our first quarter 2025 results, I would like to start by summarizing some of our accomplishments over the last 90 We are building on the momentum we established last year. In the first quarter of 2025, our revenues increased by 27% year-over-year to $253.4 million, marking our strongest first quarter performance since 2022. This growth reflects the strength of our historic brand, the dedication of our agents, and the success of our strategic initiative. We also made strong progress for restoring our non-gap profitability with significant reductions in operating losses when compared to the first quarter of 2024.
Speaker Change: Before we turn to our first quarter 2025 results I would like to start by summarizing some of our accomplishments over the last 90 days.
Speaker Change: Building on the momentum we established last year in the first quarter of 2025, our revenues increased by 2020, 27% year over year to $253 4 million, marking our strongest first quarter performance. Since 2022. This growth reflects the strength of our historic brand.
Speaker Change: The dedication of our agents and the success of our strategic initiatives.
Speaker Change: Also made strong progress by restoring our non-GAAP profitability with significant reductions in operating losses, when compared to the first quarter of 2024.
Michael Liebowitz: Our agents and employees remain at the center of everything we do. Their hard work and commitment to excellence continue to drive our success. We are proud to support them. tools and technology they need to excel in today's market.
Speaker Change: Our agents and employees remain at the center of everything we do their hard work and commitment to excellence continues to drive our success, we are proud to support them.
Speaker Change: The tools and technology, they need to excel in today's market.
Michael Liebowitz: Now let's discuss the future. Looking ahead to the second quarter, we are encouraged by the trends we are observing. While challenges persist, such as continuation of elevated U.S. mortgage rates, low housing inventory, soft transaction volume, broader economic trends, tariffs, and other geopolitical uncertainty, Our average daily cash receipts in April of 25 were up approximately 4% compared to the same period in 24. These results illustrate the resilience and strength of the luxury markets we serve. We remain focused on executing our strategic growth initiative, including our development marketing division, which continues to be a cornerstone of our long-term growth strategy.
Now, let's discuss the future looking ahead to the second quarter. We are encouraged by the trends we are observing while challenges persist such as continuation of elevated U S mortgage rates low housing inventory soft transaction volume broader economic trends.
Speaker Change: This and other geopolitical uncertainty.
Speaker Change: Our average daily cash receipts in April of 25 were up approximately 4% compared to the same period in 24. These results illustrate the resilience and strength of the luxury markets we serve.
Speaker Change: We remain focused on executing our strategic growth initiatives, including our development marketing division, which continues to be a cornerstone of our long term growth strategy.
Michael Liebowitz: As demand for luxury residences continues to build in our markets, this division is very well positioned to capitalize on the growing demand for luxury residences in our markets. We continue to prioritize expense discipline while optimizing operations and are making meaningful progress. By balancing strategic investments with thoughtful cost management, we are well positioned to capitalize on future opportunities to expand our revenue base, particularly in recruiting and in our international expansion. and our Strategic M&A and Business Development Unit continues to evaluate complementary acquisitions in ancillary businesses such as title, escrow, insurance brokerage, property management that would align with our ROI targets and long-term strategies.
Speaker Change: <unk> for luxury residences continues to build in all markets. This division is very well positioned to capitalize on the growing demand for luxury residences in our markets. We continue to prioritize expense discipline, while optimizing operations and are making meaningful progress by balancing strategic investments with thoughts.
Speaker Change: Full cost management, we are well positioned to capitalize on future opportunities to expand our revenue base, particularly in recruiting.
Speaker Change: And in our international expansion.
Speaker Change: And now strategic M&A and business development unit continues to evaluate complementary acquisitions and ancillary businesses such as title escrow insurance brokerage property management that would align with our ROI targets and long term strategy.
Michael Liebowitz: We believe our ongoing efforts are transforming Douglas Elliman into a more diversified, resilient, and forward-looking real estate services company, one that is well-equipped to thrive in an evolving market and deliver long-term value.
Speaker Change: We believe our ongoing efforts are transforming Douglas elliman into a more diversified resilient and forward looking real estate services company. One that is well equipped to thrive in an evolving market and deliver long term value with that I will turn it over to Brian who will provide more details on our financial performance and the trends.
Brian Kirkland: With that, I will turn it over to Bryant, who will provide more details on our financial performance and the trend shaping the residential real estate market. Thank you, Mike. We are confident that the improvement in financial results that began in 2024 and which has continued into the first quarter of 2025 is positioning Douglas Elliman for long-term success. The first quarter results indicate our core operations are continuing to benefit from the expense reductions management has implemented, as well as the significant investments made in our Development Marketing Division. In particular, the first quarter results were in half.
Speaker Change: Shaping the residential real estate market Brian.
Speaker Change: Daiichi Michael we.
Speaker Change: We are confident that the improvement in financial results that began in 2024, and which has continued in to the first quarter of 2025 positioning Douglas Elliman for long term success.
Speaker Change: The first quarter results indicate our core operations are continuing to benefit from the expense reductions management has implemented as well as the significant investments made in our development marketing Division.
Speaker Change: In particular, the first quarter results were enhanced by a favorable sales mix, resulting from the strength of our highest gross margin markets the development marketing Division.
Brian Kirkland: by a favorable salesman. resulting from the strength of our highest gross margin market. Development Marketing Division and Existing Home Sales in New York specifically. New York City's revenues from existing home sales increased by $17 million, or 34%.
Speaker Change: Listing home sales and New York City.
Speaker Change: Specifically.
Speaker Change: New York city's revenues from existing home sales increased by $17 million or 34%.
Brian Kirkland: from the 2020 4 First Quarter. and Development Marketing's first quarter revenues increased by $14.6 million or 222% from the 2024 first quarter.
Speaker Change: The 2020 for first quarter.
Speaker Change: And development Marketing's first quarter revenues increased by $14 $6 million or 222 per suck front in 2020 for first quarter.
Speaker Change: Yeah.
Brian Kirkland: Before reviewing the financial performance, we will provide some updates on our trends. First, Douglas Elliman owns Luck. Pricing for luxury home sales remains strong. Our industry best average price per transaction. rose to $2 million per home sale compared to $1.6 million per home sale in the comparable 2024 period.
Speaker Change: Before reviewing the financial performance, we will provide some updates on our trends.
Speaker Change: First.
Speaker Change: Douglas Elliman owns luxury.
Speaker Change: Pricing for luxury home sales remain strong.
Speaker Change: Our industry best average price per transaction.
Speaker Change: As to $2 million per home so.
Speaker Change: <unk> to $1 $6 million per home so in the comparable 2024 period.
Brian Kirkland: for the last 12 months. Our average price. per home sale transactions has been $1.76 million. compared to 1.6 million dollars per home sale in the 2024 last 12 months.
Speaker Change: For the last 12 months.
Speaker Change: Average price per home sale transaction.
Speaker Change: It's been one $706 million.
Pair to one $6 million per home so into 2020 for last 12 month period.
Brian Kirkland: in the first quarter of 2025. Our world-class agents sold 343 homes for approximately $5 million or more. That was a 73% increase from the same quarter last year and impressively represented 7% of our total transactions during the first quarter. Equally impressive are 104 home sales of $10 million or more. an increase of 76% from the same quarter last year. again Douglas Elliman owns the luxury markets it serves. Continuing with that theme, and as Michael discussed, Our Development Marketing Division remains the preeminent industry player with a pipeline of actively marketed projects of approximately $28.3 billion of gross transaction value.
Speaker Change: In the first quarter of 2025.
Speaker Change: Our world class agents, so 343 homes for approximately $5 million or more.
That was a 73% increase from the same quarter last year and impressively represented 7% of our total transactions during the first quarter.
Speaker Change: Equally impressive are 104 home sales of $10 million or more.
Speaker Change: An increase of 76% from the same quarter last year.
Speaker Change: Again.
Speaker Change: Douglas Elliman.
Speaker Change: The luxury markets it serves.
Speaker Change: Continuing with that theme and as Michael discussed.
Speaker Change: Our development marketing Division remains deep.
Speaker Change: Industry player with a pipeline of actively.
Speaker Change: Marketed projects of approximately $28 $3 billion of gross transaction value.
Brian Kirkland: Approximately $18.7 billion of gross transaction value is in Florida alone. in addition to this active pipeline.
Speaker Change: Approximately $18 $7 billion of gross transaction value is in Florida alone.
Speaker Change: In addition to this ought to Firefly.
Brian Kirkland: We have another $4.2 billion of gross transaction value coming to market through June 2020. We believe this foundation of business bodes well for the future. as we will recognize commission income from these projects when they close.
Speaker Change: We have another $4 $2 billion of gross transaction value.
Speaker Change: Coming to market through June 2026.
Speaker Change: We believe this foundation of business bodes well for the future.
Speaker Change: We will recognize commission income from these projects when they close.
Brian Kirkland: which is generally between 2025 and 2030. beginning with a strong performance in the fourth quarter of 2024 from Development Marketing. We are continuing to see the early momentum of this pipeline as development marketing's revenue increased to $21.1 million in the first quarter of 2025, up from $6.6 million in the 2024 first quarter.
Speaker Change: Just generally between 2025 and 2030.
Speaker Change: Beginning with a strong performance in the fourth quarter of 2024 from development marketing.
Speaker Change: We are continuing to see the early momentum at this pipeline.
Speaker Change: <unk> marketing's revenue increased to $21 $1 million in the first quarter of 2025 up from $6 6 million in the 2020 for first quarter.
Brian Kirkland: Transitioning to updates on our expense structure. We continue to manage investments across our markets with a strict focus on return on investment metric. in the first quarter of 2025. We reduced our operating expenses. by $3 million from the first quarter of 2024 after its gloating commission. Depreciation and Amortization, Unusual, Litigation Expense, Settlement and Related Expense.
Speaker Change: Transitioning to updates on our expense structure.
Speaker Change: We continue to manage investments across our markets with a strict focus on return on investment metrics.
Speaker Change: In the first quarter of 2025.
Speaker Change: We reduced our operating expenses.
Speaker Change: $3 million from the first quarter of 2024.
Speaker Change: After excluding commissions depreciation and amortization.
Speaker Change: Usual litigation expense settlement and related expense.
Brian Kirkland: Restructuring Expenses and Non-Cash Stock Compensation Expenses.
Speaker Change: Restructuring expenses and noncash stock compensation expenses.
Speaker Change: Now.
Brian Kirkland: Turning to Douglas Elliman's financial results for the three months ended March 31, 2025.
Speaker Change: Turning to Douglas elements, but actual results for the three months ended March 31 2025.
Brian Kirkland: Douglas Elliman, Maine States, after and Ample Liquidity. with cash and cash investments at March 31st, 2025 up approximately $137 million. The strength of our balance sheet provides a competitive advantage for Douglas Elliman as we implement expansion plans to scale our operations. and strengthen our services platform.
Speaker Change: Douglas element main states after.
Speaker Change: And ample liquidity.
Speaker Change: With cash and cash investments at March 31, 2025 up approximately $137 million the strength of our balance sheet provides a competitive advantage for Douglas element.
Speaker Change: As we implement expansion plans to scale our operations.
Speaker Change: And strengthen our services platform.
Brian Kirkland: Historically, a significant cash flow drain occurs in the first quarter because of the seasonality of our business and the timing of annual cash bonuses, which are generally paid in March. That said, the decline in cash investments was $8.7 million in the first quarter of 2025 compared to $28.4 million in the first quarter of 2024. an improvement of approximately $20 million.
Speaker Change: Historically, a significant cash flow drain occurs in the first quarter.
Speaker Change: Because of the seasonality of our business.
Speaker Change: Timing of annual cash bonuses, which are generally paid in March.
Speaker Change: That said the decline in cash investments was $8 $7 million into first quarter of 2025 compared to $28.4 million in the first quarter of 2024.
Speaker Change: An improvement of approximately $20 million.
Brian Kirkland: moving to the operating performance of the business in the first quarter. reported $253.4 million in revenues compared to $200.2 million in the 2024 first quarter. Net loss for the first quarter was $6 million or $0.07 per diluted share compared to $41.5 million or $0.50 per diluted share in the 2024 first quarter. Ajatsire Bhatta for the first quarter were a positive $1.1 million compared to a loss of $17.6 million in the 2024 first quarter. Adjusted net loss for the first quarter was $2.4 million or $0.03 per share. compared to adjusted net loss of $23.1 million or $0.28 per share in the 2024 first quarter.
Speaker Change: Moving to the operating performance of the business in the first quarter.
Speaker Change: Douglas Elliman reported $253 4 million in revenues compared to $200 2 million in 2020 for first quarter.
Speaker Change: Net loss for the first quarter was $6 million.
Speaker Change: We're seven cents per diluted share compared to $41 5 million or 50.
Speaker Change: <unk> per diluted share in the 2020 for first quarter.
Speaker Change: Adjusted EBITDA.
Speaker Change: For the first quarter were a positive $1 1 million.
Speaker Change: Compared to a loss of $17 6 million into 2020 for first quarter.
Speaker Change: Adjusted net loss for the first quarter was $2 4 million.
Speaker Change: Or three cents per share compared.
Speaker Change: Compared to adjusted net loss of $23 $1 million or <unk> 28 per share in the 2020 for first quarter.
Michael Liebowitz: Thank you for your attention and back to you, Michael. Thanks, Brian, and thank you and your team for your hard work this quarter. You guys did a great job.
Michael: Thank you for your attention and back to you Michael.
Michael: Thanks, Brian and thank you and your team for your hard work. This quarter you guys did a great job I continue to believe in the strength and brand power of the Douglas Elliman brand and its scalability and we are very excited about our future.
Michael Liebowitz: I continue to believe in the strength and brand power of the Douglas Elliman brand and its scalability, and we are very excited about our product. The results of the last two quarters show we are continuing our turnaround and performing extremely well. Our best days are ahead.
Michael: Over the last few quarters show, we are continuing our turnaround and performing extremely well.
Michael: Best days are ahead with that we will be happy to answer any questions operator.
Michael Liebowitz: With that, we will be happy to answer any questions. Thank you.
Operator: At this time, if you would like to ask a question, please press the star 1 on your telephone keypad. You may remove yourself from the queue at any time by pressing star 2. And once again, that is star 1 for a question.
Speaker Change: Thank you at this time, if he would like to ask a question. Please press the star one on your telephone keypad, you may remove yourself from the queue at any time by pressing star two and once again that is star one for a question, we'll pause for a moment.
Operator: We'll pause for a moment. And again, ladies and gentlemen, that is star one for our questions.
Speaker Change: And again, ladies and gentlemen that is star one for a question.
Operator: And at this time, we have no questions.
Speaker Change: And at this time, we have no questions. We thank you for joining us on the Douglas Elliman as quarterly earnings Conference call. We hope you have a good day and this will conclude our call.
Operator: We thank you for joining us on the Douglas Elliman's Quarterly Earnings Conference Call.
Operator: We hope you have a good day, and this will conclude our call. Thank you.
Speaker Change: Thank you.
Speaker Change: [music].