10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________________ to ______________________

Commission File Number: 001-38493

EXP WORLD HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	98-0681092
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification No.)
2219 Rimland Drive, Suite 301, Bellingham, WA	98226
(Address of principal executive offices)	(Zip Code)
(360) 685-4206
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

(Title of Each Class)	(Trading Symbol)	(Name of each exchange on which registered)
Common Stock, $0.00001 par value per share	EXPI	The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒    No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐    No ☒

There were 153,588,186 shares of the registrant’s Common Stock, $0.00001 par value, outstanding as of June 30, 2023.

TABLE OF CONTENTS

		Page
	Forward Looking Statements	3
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	32
Item 6.	Exhibits	33

2

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains statements that are not historical fact and may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not based on historical facts but rather represent current expectations and assumptions of future events. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

Many of these risks and other factors are beyond our ability to control or predict. Forward-looking statements can be identified by words such as “believe,” “expect,” “anticipate,” “estimate,” “project,” “plan,” “should,” “intend,” “may,” “will,” “could,” “can,” “would,” “potential,” “seek,” “goal” and similar expressions of the future. These risks and uncertainties, as well as other risks and uncertainties that could cause our actual results to differ significantly from management’s expectations, including, but not limited to:

● the impact of macroeconomic conditions on the strength of the residential real estate market;

● the impact of monetary policies of the U.S. federal government and its agencies on our operations;

● the impact of changes in consumer attitudes on home sale transaction volume;

● the impact of excessive or insufficient home inventory supply on home sale transaction value;

● our ability to effectively manage rapid growth in our business;

● our ability to attract and retain additional qualified personnel;

● changes in tax laws and regulations that may have a material adverse effect on our business;

● our ability to protect our intellectual property rights;

● the impact of security breaches, interruptions, delays and failures in our systems and operations on our business;

● financial condition and reputation;

● our ability to predict the demand or growth of our new products and services;

● our ability to maintain our agent growth rate; and

● the effect of inflation and rising interest rates on real estate transaction values and our operating results, profits and cash flows.

Other factors not identified above, including those described under the heading “Risk Factors” in Part I, Item 1A, and elsewhere in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, may also cause actual results to differ materially from those described in our forward-looking statements. Most of these factors are difficult to anticipate and are generally beyond our control. You should consider these factors in connection with considering any forward-looking statements that may be made by us.

Forward-looking statements are based on currently available operating, financial and market information and are inherently uncertain. Investors should not place undue reliance on forward-looking statements, which speak only as of the date they are made and are not guarantees of future performance. Actual future results and trends may differ materially from such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future developments or otherwise, except as may be required by law.

3

PART 1 – FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS (UNAUDITED)

EXP WORLD HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)

(UNAUDITED)

	June 30, 2023	December 31, 2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$ 124,714	$ 121,594
Restricted cash	88,560	37,789
Accounts receivable, net of allowance for credit losses of $1,544 and $4,014, respectively	134,998	87,262
Prepaids and other assets	8,101	8,468
TOTAL CURRENT ASSETS	356,373	255,113
Property, plant, and equipment, net	15,224	18,151
Operating lease right-of-use assets	32	2,127
Other noncurrent assets	6,567	1,703
Intangible assets, net	11,728	8,700
Deferred tax assets	65,306	68,676
Goodwill	27,552	27,212
TOTAL ASSETS	$ 482,782	$ 381,682
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable	$ 7,321	$ 10,391
Customer deposits	88,643	37,789
Accrued expenses	128,461	78,944
Current portion of lease obligation - operating lease	29	175
TOTAL CURRENT LIABILITIES	224,454	127,299
Long-term payable	5	4,697
Long-term lease obligation - operating lease, net of current portion	3	694
TOTAL LIABILITIES	224,462	132,690
EQUITY
Common Stock, $0.00001 par value 900,000,000 shares authorized; 177,900,083 issued and 153,588,186 outstanding at June 30, 2023; 171,656,030 issued and 152,839,239 outstanding at December 31, 2022	2	2
Additional paid-in capital	701,806	611,872
Treasury stock, at cost: 24,311,897 and 18,816,791 shares held, respectively	(463,738)	(385,010)
Accumulated earnings	18,138	20,723
Accumulated other comprehensive income	943	236
Total eXp World Holdings, Inc. stockholders' equity	257,151	247,823
Equity attributable to noncontrolling interest	1,169	1,169
TOTAL EQUITY	258,320	248,992
TOTAL LIABILITIES AND EQUITY	$ 482,782	$ 381,682

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

EXP WORLD HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, except share amounts and per share data)

(UNAUDITED)

​	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Revenues	$ 1,232,927	$ 1,415,060	$ 2,083,543	$ 2,425,791
Operating expenses
Commissions and other agent-related costs	1,136,411	1,307,810	1,913,970	2,235,077
General and administrative expenses	82,541	91,391	154,308	166,713
Sales and marketing expenses	2,878	4,210	5,841	7,910
Total operating expenses	1,221,830	1,403,411	2,074,119	2,409,700
Operating income	11,097	11,649	9,424	16,091
Other (income) expense
Other (income) expense, net	(1,299)	62	(2,179)	472
Equity in losses of unconsolidated affiliates	143	567	485	884
Total other (income) expense, net	(1,156)	629	(1,694)	1,356
Income before income tax expense	12,253	11,020	11,118	14,735
Income tax (benefit) expense	2,831	1,661	243	(3,488)
Net income	9,422	9,359	10,875	18,223
Net income attributable to noncontrolling interest	-	-	-	18
Net income attributable to eXp World Holdings, Inc.	$ 9,422	$ 9,359	$ 10,875	$ 18,241
Earnings per share
Basic	$ 0.06	$ 0.06	$ 0.07	$ 0.12
Diluted	$ 0.06	$ 0.06	$ 0.07	$ 0.12
Weighted average shares outstanding
Basic	153,249,120	150,783,418	152,899,883	150,049,170
Diluted	156,693,959	155,816,038	156,119,627	156,579,590
Comprehensive income:
Net income	$ 9,422	$ 9,359	$ 10,875	$ 18,223
Comprehensive loss attributable to noncontrolling interests	-	-	-	18
Net income attributable to eXp World Holdings, Inc.	9,422	9,359	10,875	18,241
Other comprehensive income:
Foreign currency translation gain (loss), net of tax	64	(1,182)	707	(1,141)
Comprehensive income attributable to eXp World Holdings, Inc.	$ 9,486	$ 8,177	$ 11,582	$ 17,100

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

EXP WORLD HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(In thousands)

(UNAUDITED)

​	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Common stock:
Balance, beginning of period	$ 2	$ 2	$ 2	$ 1
Agent equity stock compensation	-	-	-	1
Balance, end of period	2	2	2	2
Treasury stock:
Balance, beginning of period	(414,926)	(239,965)	(385,010)	(210,009)
Repurchases of common stock	(48,812)	(49,864)	(78,728)	(79,820)
Balance, end of period	(463,738)	(289,829)	(463,738)	(289,829)
Additional paid-in capital:
Balance, beginning of period	650,383	450,570	611,872	401,479
Shares issued for stock options exercised	946	280	1,253	778
Agent growth incentive stock compensation	9,236	6,685	17,903	13,268
Agent equity stock compensation	38,876	48,335	65,652	86,835
Stock option compensation	2,365	3,606	5,126	7,116
Balance, end of period	701,806	509,476	701,806	509,476
Accumulated earnings:
Balance, beginning of period	15,580	33,533	20,723	30,510
Net income	9,422	9,359	10,875	18,241
Dividends declared and paid	(6,864)	(5,885)	(13,460)	(11,744)
Balance, end of period	18,138	37,007	18,138	37,007
Accumulated other comprehensive income (loss):
Balance, beginning of period	879	229	236	188
Foreign currency translation gain (loss)	64	(1,182)	707	(1,141)
Balance, end of period	943	(953)	943	(953)
Noncontrolling interest:
Balance, beginning of period	1,169	1,169	1,169	1,364
Net loss	-	-	-	(18)
Transactions with noncontrolling interests	-	-	-	(177)
Balance, end of period	1,169	1,169	1,169	1,169
Total equity	$ 258,320	$ 256,872	$ 258,320	$ 256,872

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

EXP WORLD HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(UNAUDITED)

	Six Months Ended June 30,
	2023	2022
OPERATING ACTIVITIES
Net income	$ 10,875	$ 18,223
Reconciliation of net income to net cash provided by operating activities:
Depreciation expense	4,163	3,570
Amortization expense - intangible assets	1,195	817
Loss on dissolution of consolidated affiliates	-	361
Allowance for credit losses on receivables/bad debt on receivables	(2,470)	608
Equity in loss of unconsolidated affiliates	485	884
Agent growth incentive stock compensation expense	18,148	17,028
Stock option compensation	5,126	7,121
Agent equity stock compensation expense	65,652	86,835
Deferred income taxes, net	3,370	(6,892)
Changes in operating assets and liabilities:
Accounts receivable	(45,266)	(22,269)
Prepaids and other assets	367	2,236
Customer deposits	50,854	25,893
Accounts payable	(3,069)	(1,152)
Accrued expenses	49,273	31,961
Long term payable	(4,692)	-
Other operating activities	157	74
NET CASH PROVIDED BY OPERATING ACTIVITIES	154,168	165,298
INVESTING ACTIVITIES
Purchases of property, plant, equipment	(3,433)	(8,077)
Investments in unconsolidated affiliates	(5,350)	-
Capitalized software development costs in intangible assets	(1,179)	-
NET CASH USED IN INVESTING ACTIVITIES	(9,962)	(8,077)
FINANCING ACTIVITIES
Repurchase of common stock	(78,728)	(79,820)
Proceeds from exercise of options	1,253	780
Transactions with noncontrolling interests	-	(425)
Dividends declared and paid	(13,460)	(11,744)
NET CASH USED IN FINANCING ACTIVITIES	(90,935)	(91,209)
Effect of changes in exchange rates on cash, cash equivalents and restricted cash	620	(1,141)
Net change in cash, cash equivalents and restricted cash	53,891	64,871
Cash, cash equivalents and restricted cash, beginning balance	159,383	175,910
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ENDING BALANCE	$ 213,274	$ 240,781
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash paid for income taxes	$ 1,833	$ 2,444
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Termination of lease obligation - operating lease	$ 837	$ -
Property, plant and equipment increase due to transfer of right-of-use lease asset	1,100	-
Property, plant and equipment purchases in accounts payable	-	246

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

eXp World Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

(UNAUDITED)

(Amounts in thousands, except share amounts and per share data or noted otherwise)

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

eXp World Holdings, Inc. (“eXp,” or, collectively with its subsidiaries, the “Company,” “we,” “us,” or “our”) owns and operates a diversified portfolio of service-based businesses whose operations benefit substantially from utilizing our technology platform. We strategically prioritize our efforts to grow our real estate brokerage by strengthening our agent value proposition, developing immersive and cloud-based technology to enable our model and providing affiliate and media services supporting those efforts. Our real estate brokerage is now one of the largest and fastest-growing real estate brokerage companies in the United States and Canada and is rapidly expanding internationally.

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

These interim financial statements should be read in conjunction with the audited consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 28, 2023 (“2022 Annual Report”).

In our opinion, the accompanying interim unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation. Operating results for the six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

Effective in December 2022, the Company revised the presentation of segment information to reflect changes in the way the Company manages and evaluates the business.  As such, we now report operating results through four reportable segments: North American Realty, International Realty, Virbela and Other Affiliated Services, as further discussed in Note 11 – Segment Information.  Accordingly, certain amounts in the prior years’ consolidated financial statements have been revised to conform to the current year presentation. See additional information in Note 11 –Segment Information.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of eXp and its consolidated subsidiaries, including those entities in which we have a variable interest of which we are the primary beneficiary. If the Company has a variable interest in an entity but it is not the primary beneficiary of the entity or exercises control over the operations and has less than 50% ownership, it will use the equity method or the cost method of accounting for investments. Entities in which the Company has less than a 20% investment and where the Company does not exercise significant influence are accounted for under the cost method. Intercompany transactions and balances are eliminated upon consolidation.

Variable interest entities and noncontrolling interests

A company is deemed to be the primary beneficiary of a variable interest entity (“VIE”) and must consolidate the entity if the company has both: (i) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, and (ii) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

Joint ventures

A joint venture is a contractual arrangement whereby the Company and other parties undertake an economic activity through a jointly controlled entity. Joint control exists when strategic, financial, and operating policy decisions relating to the activities require the unanimous consent of the parties sharing control. Joint ventures are accounted for using the equity method and are recognized initially at cost.

8

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to allowance for credit losses, legal contingencies, income taxes, revenue recognition, stock-based compensation, goodwill, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Reclassifications

When necessary, the Company will reclassify certain amounts in prior-period financial statements to conform to the current period’s presentation. No reclassifications occurred during the current period.

Restricted cash

Restricted cash consists of cash held in escrow by the Company on behalf of real estate buyers. The Company recognizes a corresponding customer deposit liability until the funds are released. Once the cash transfers from escrow, the Company reduces the respective customers’ deposit liability.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown on the condensed consolidated statements of cash flows.

	Cash and cash equivalents	Restricted cash	Total
Balance, December 31, 2021	$ 108,237	$ 67,673	$ 175,910
Balance, June 30, 2022	$ 134,898	$ 105,883	$ 240,781
Balance, December 31, 2022	$ 121,594	$ 37,789	$ 159,383
Balance, June 30, 2023	$ 124,714	$ 88,560	$ 213,274

3. EXPECTED CREDIT LOSSES

The Company is exposed to credit losses primarily through trade and other financing receivables arising from revenue transactions. The Company uses the aging schedule method to estimate current expected credit losses (“CECL”) based on days of delinquency, including information about past events and current economic conditions. The Company’s accounts receivable is separated into three categories to evaluate allowance under the CECL impairment model. The receivables in each category share similar risk characteristics. The three categories include agent non-commission based fees, agent short-term advances, and commissions receivable for real estate property settlements.

The Company increases the allowance for expected credits losses when the Company determines all or a portion of a receivable is uncollectable. The Company recognizes recoveries as a decrease to the allowance for expected credit losses.

As of the second quarter of 2022, the Company provided an allowance for potential credit losses of real estate transactions.

Receivables from real estate property settlements totaled $129,139 and $79,135 of which the Company recognized expected credit losses of $66 and $3,127, respectively as of June 30, 2023 and December 31, 2022. As of June 30, 2023 and December 31, 2022 agent non-commission based fees receivable and short-term advances totaled $7,403 and $12,141, of which the Company recognized expected credit losses of $1,478 and $887, respectively.

9

4. PLANT, PROPERTY AND EQUIPMENT, NET

Plant, property and equipment, net consisted of the following:

	June 30, 2023	December 31, 2022
Computer hardware and software	$ 36,467	$ 34,206
Furniture, fixture, and equipment	2,253	20
Total depreciable property and equipment	38,720	34,226
Less: accumulated depreciation	(23,552)	(19,282)
Depreciable property, net	15,168	14,944
Assets under development	56	3,207
Property, plant, and equipment, net	$ 15,224	$ 18,151

For the three months ended June 30, 2023 and 2022 depreciation expense was $2,096 and $1,954, respectively. For the six months ended June 30, 2023 and 2022, depreciation expense was $4,163 and $3,570, respectively.

5. GOODWILL AND INTANGIBLE ASSETS

Goodwill was $27,552 as of June 30, 2023 and $27,212 as of December 31, 2022. As of June 30, 2023, the Company recorded cumulative translation adjustment of $340 related to Canadian goodwill. The Company has a risk of future impairment to the extent that individual reporting unit performance does not meet projections. Additionally, if current assumptions and estimates, including projected revenues and income growth rates, terminal growth rates, competitive and consumer trends, market-based discount rates, and other market factors, are not met, or if valuation factors outside of the Company’s control change unfavorably, the estimated fair value of goodwill could be adversely affected, leading to a potential impairment in the future. For the three and six months ended June 30, 2023, no events occurred that indicated it was more likely than not that goodwill was impaired.

Definite-lived intangible assets were as follows:

	June 30, 2023			December 31, 2022
	Gross	Accumulated	Net Carrying	Gross	Accumulated	Net Carrying
	Amount	Amortization	Amount	Amount	Amortization	Amount
Trade name	$ 3,472	($ 984)	$ 2,488	$ 3,459	($ 841)	$ 2,618
Existing technology	8,188	(2,889)	5,299	3,995	(2,458)	1,537
Non-competition agreements	469	(125)	344	461	(125)	336
Customer relationships	1,895	(646)	1,249	1,895	(551)	1,344
Licensing agreement	210	(210)	-	210	(181)	29
Intellectual property	2,836	(488)	2,348	2,836	-	2,836
Total intangible assets	$ 17,070	($ 5,342)	$ 11,728	$ 12,856	($ 4,156)	$ 8,700

Definite-lived intangible assets are amortized using the straight-line method over an asset’s estimated useful life. Amortization expense for definite-lived intangible assets for the three months ended June 30, 2023 and 2022 was $683 and $475, respectively. Amortization expense for definite-lived intangible assets for the six months ended June 30, 2023 and 2022 was $1,195 and $817, respectively. The Company has no indefinite-lived assets.

10

6.STOCKHOLDERS’ EQUITY

The following table represents a share reconciliation of the Company’s common stock issued for the periods presented:

​	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Common stock:
Balance, beginning of quarter	174,532,043	158,300,605	171,656,030	155,516,284
Shares issued for stock options exercised	79,599	639,861	192,807	1,363,055
Agent growth incentive stock compensation	730,003	403,652	1,386,439	914,324
Agent equity stock compensation	2,558,438	3,942,452	4,664,807	5,492,907
Balance, end of quarter	177,900,083	163,286,570	177,900,083	163,286,570

The Company’s equity programs described below are administered under the stockholder approved 2015 Equity Incentive Plan. The purpose of the equity plan is to retain the services of valued employees, directors, officers, agents, and consultants and to incentivize such persons to make contributions to the Company and motivate excellent performance.

Agent Equity Program

The Company provides agents and brokers the opportunity to elect to receive 5% of commissions earned from each completed real estate transaction in the form of common stock (the “Agent Equity Program” or “AEP”). If agents and brokers elect to receive portions of their commissions in common stock, they are entitled to receive the equivalent number of shares of common stock, based on the fixed monetary value of the commission payable. The Company recognizes a 10% discount on these issuances as an additional cost of sales charge during the periods presented.

During the three months ended June 30, 2023 and 2022, the Company issued 2,558,438 and 3,942,452 shares of common stock, respectively, to agents and brokers with a value of $38,876 and $48,335, respectively, inclusive of discount. During the six months ended June 30, 2023 and 2022, the Company issued 4,664,807 and 5,492,907 shares of common stock, respectively, to agents and brokers with a value of $65,652 and $86,835, respectively, inclusive of discount.

Agent Growth Incentive Program

The Company administers an equity incentive program whereby agents and brokers become eligible to receive awards of the Company’s common stock through agent attraction and performance benchmarks (the “Agent Growth Incentive Program” or “AGIP”). The incentive program encourages greater performance and awards agents with common stock based on achievement of performance milestones. Awards typically vest after performance benchmarks are reached and three years of subsequent service is provided to the Company. Share-based performance awards are based on a fixed-dollar amount of shares based on the achievement of performance metrics. As such, the awards are classified as liabilities until the number of share awards becomes fixed once the performance metric is achieved.

For the three months ended June 30, 2023 and 2022 the Company’s stock compensation expense attributable to the Agent Growth Incentive Program was $8,488 and $9,230, respectively, of which the total amount of stock compensation attributable to liability classified awards was $345 and $2,545, respectively. For the six months ended June 30, 2023 and 2022 the Company’s stock compensation expense attributable to the Agent Growth Incentive Program was $18,148 and $17,028, respectively, of which the total amount of stock compensation attributable to liability classified awards was $1,338 and $4,451, respectively.

11

The following table illustrates changes in the Company’s stock compensation liability for the periods presented:

	Amount
Balance, December 31, 2022	$ 3,885
Stock grant liability increase year to date	1,338
Stock grants reclassified from liability to equity year to date	(1,094)
Balance, June 30, 2023	$ 4,129

Stock Option Awards

Stock options are granted to directors, officers, certain employees and consultants with an exercise price equal to the fair market value of common stock on the grant date and the stock options expire 10 years from the date of grant. These options typically have time-based restrictions with equal and periodically graded vesting over a three-year period.

During the three months ended June 30, 2023 and 2022, the Company granted 1,440,010 and 288,007 stock options, respectively, to employees with an estimated grant date fair value of $8.35 and $11.64 per share, respectively. During the six months ended June 30, 2023 and 2022, the Company granted 1,528,563 and 772,385 stock options, respectively, to employees with an estimated grant date fair value of $8.34 and $13.24 per share, respectively. The fair value was calculated using a Black Scholes-Merton option pricing model.

Stock Repurchase Plan

In December 2018, the Company’s board of directors (the “Board”) approved a stock repurchase program authorizing the Company to purchase up to $25.0 million of its common stock, which was later amended in November 2019 increasing the authorized repurchase amount to $75.0 million. In December 2020, the Board approved another amendment to the repurchase plan, increasing the total amount authorized to be purchased from $75.0 million to $400.0 million. In May 2022, the Board approved an increase to the total amount of its buyback program from $400.0 million to $500.0 million. In June 2023, the Board approved an increase to the total amount of its buyback program from $500.0 million to $1.0 billion.  Purchases under the repurchase program may be made in the open market or through a 10b5-1 plan and are expected to comply with Rule 10b-18 under the Exchange Act, as amended. The timing and number of shares repurchased depends upon market conditions. The repurchase program does not require the Company to acquire a specific number of shares. The cost of the shares that are repurchased is funded from cash and cash equivalents on hand.

10b5-1 Repurchase Plan

The Company maintains an internal stock repurchase program with program changes subject to Board consent. From time to time, the Company adopts written trading plans pursuant to Rule 10b5-1 of the Exchange Act to conduct repurchases on the open market.  

On January 10, 2022, the Company and Stephens Inc. entered into a form of Issuer Repurchase Plan (“Issuer Repurchase Plan”) which authorized Stephens to repurchase up to $10.0 million of its common stock per month. On May 3, 2022, the Board approved and on May 6, 2022, the Company entered into a form of first amendment to the Issuer Repurchase Plan to increase monthly repurchases from $10.0 million of its common stock per month up to $20.0 million. On September 27, 2022, the Board approved, and the Company entered into, a form of second amendment to the Issuer Repurchase Plan, to decrease the monthly repurchases from $20.0 million of its common stock per month to $13.3 million, in anticipation of volume decreases in connection with the contraction in the real estate market. On December 27, 2022, the Board approved, and the Company entered into, a form of third amendment to the Issuer Repurchase Plan, to decrease the monthly repurchases from $13.3 million of its common stock per month to $10.0 million, in connection with ongoing contractions in the real estate market. On May 10, 2023, the Board approved and, on May 11, 2023, the Company entered into, a form of fourth amendment to the Issuer Repurchase Plan, to increase the monthly repurchase amounts during 2023 due to actual and projected changes in the Company’s cash and cash equivalents; specifically, to permit purchases of up to: (i) $17.0 million during May 2023, (ii) $22.0 million during June 2023, (iii) $18.67 million during any calendar month commencing July 1, 2023 through and including September 30, 2023, and (iv) $12.0 million during any calendar month commencing October 1, 2023 through and including December 31, 2023. On June 26, 2023, the Board approved, and the Company entered into, a form of fifth amendment to the Issuer Repurchase Plan to increase the maximum aggregate buyback from $500.0 million to $1.0 billion in accordance with the repurchase program limit.

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For accounting purposes, common stock repurchased under the stock repurchase programs is recorded based upon the settlement date of the applicable trade. Such repurchased shares are held in treasury and are presented using the cost method. These shares are considered issued but not outstanding.

The following table shows the share changes in treasury stock for the periods presented:

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Treasury stock:
Balance, beginning of quarter	21,089,622	7,883,740	18,816,791	6,751,692
Repurchases of common stock	3,222,275	3,603,951	5,495,106	4,735,999
Balance, end of quarter	24,311,897	11,487,691	24,311,897	11,487,691

7.EARNINGS PER SHARE

Basic earnings per share is computed based on net income attributable to eXp stockholders divided by the basic weighted-average shares outstanding during the period. Dilutive earnings per share is computed consistently with the basic computation while giving effect to all dilutive potential common shares and common share equivalents that were outstanding during the period. The Company uses the treasury stock method to reflect the potential dilutive effect of unvested stock awards and unexercised options.

The following table sets forth the calculation of basic and diluted earnings per share attributable to common stock during the periods presented:

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Numerator:
Net income attributable to common stock	$ 9,422	$ 9,359	$ 10,875	$ 18,241
Denominator:
Weighted average shares - basic	153,249,120	150,783,418	152,899,883	150,049,170
Dilutive effect of common stock equivalents	3,444,839	5,032,620	3,219,744	6,530,420
Weighted average shares - diluted	156,693,959	155,816,038	156,119,627	156,579,590
Earnings per share:
Earnings per share attributable to common stock- basic	$ 0.06	$ 0.06	$ 0.07	$ 0.12
Earnings per share attributable to common stock- diluted	$ 0.06	$ 0.06	$ 0.07	$ 0.12

For three months ended June 30, 2023 and 2022 total outstanding shares of common stock excluded 656,776 and 1,485,139 shares, respectively, from the computation of diluted earnings per share because their effect would have been anti-dilutive.

For six months ended June 30, 2023 and 2022 total outstanding shares of common stock excluded 588,940 and 692,237 shares, respectively, from the computation of diluted earnings per share because their effect would have been anti-dilutive.

8.INCOME TAXES

Our quarterly tax provision is computed by applying the estimated annual effective tax rate to the year-to-date pre-tax income or loss plus discrete tax items arising in the period. Our provision for income tax expense (benefit) amounted to $0.24 million and ($3.49) million for the six months ended June 30, 2023 and 2022, respectively, which represent effective tax rates of positive 2.20% and negative 23.81%, respectively. The provision for income tax expense was primarily attributable to increase in income from operations, lower deductible stock-based compensation windfalls and return to provision true-ups in various jurisdictions. The effective tax rate differs from our statutory rates in both periods primarily due to the impact of the stock-based compensation and R&D tax credit.

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9.FAIR VALUE MEASUREMENT

The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. The fair value hierarchy prioritizes the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories:

● Level 1 – Inputs are quoted market prices in active markets for identical assets or liabilities (these are observable market inputs).

● Level 2 – Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability (includes quoted market prices for similar assets or identical or similar assets in markets in which there are few transactions, prices that are not current or prices that vary substantially).

● Level 3 – Inputs are unobservable inputs that reflect the entity's own assumptions in pricing the asset or liability (used when little or no market data is available).

The Company holds funds in a money market account, which are considered Level 1 assets. The Company values its money market funds at fair value on a recurring basis.

As of June 30, 2023 and December 31, 2022, the fair value of the Company’s money market funds was $45,080 and $44,062, respectively.

There have been no transfers between Level 1, Level 2 and Level 3 in the period presented. The Company did not have any Level 2 or Level 3 financial assets or liabilities in the period presented.

10.COMMITMENTS AND CONTINGENCIES

From time to time, the Company is subject to potential liability under laws and government regulations and various claims and legal actions that may be asserted against us that could have a material adverse effect on the business, reputation, results of operations or financial condition. Such litigation may include, but is not limited to, actions or claims relating to sensitive data, including proprietary business information and intellectual property and that of clients and personally identifiable information of employees and contractors, cyber-attacks, data breaches and non-compliance with contractual or other legal obligations.

There are no matters pending or, to the Company’s knowledge, threatened that are expected to have a material adverse impact on the business, reputation, results of operations, or financial condition.

There are no proceedings in which any of the Company’s directors, officers or affiliates, or any registered or beneficial stockholder is an adverse party or has a material interest adverse to the Company’s interest.

11.SEGMENT INFORMATION

The reportable segments presented below represent the Company’s segments for which separate financial information is available and which is utilized on a regular basis by its chief operating decision maker to assess performance and to allocate resources. In identifying its reportable segments, the Company also considers the nature of services provided by its segments.

Management evaluates the operating results of each of its reportable segments based upon revenue and Adjusted EBITDA. Adjusted Segment EBITDA is defined by us as operating profit plus depreciation and amortization and stock-based compensation expenses. The Company’s presentation of Adjusted Segment EBITDA may not be comparable to similar measures used by other companies. The Company’s four reportable segments are as follows:

● North American Realty: includes real estate brokerage operations in the United States and Canada, as well as lead-generation and other real estate support services provided in North America.

● International Realty: includes real estate brokerage operations in all other international locations.

● Virbela: includes Virbela enterprise metaverse technology and the support services offered by eXp World Technologies.

● Other Affiliated Services: includes our SUCCESS^® Magazine and other smaller ventures.

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The Company also reports corporate expenses, as further detailed below, as “Corporate and other” which include expenses incurred in connection with business development support provided to the agents as well as resources, including administrative, brokerage operations and legal functions.

All segments follow the same basis of presentation and accounting policies as those described throughout the Notes to the Audited Consolidated Financial Statements included herein. The Company accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current market prices. The following table provides information about the Company’s reportable segments and a reconciliation of the total segment Revenues to consolidated Revenues and Adjusted Segment EBITDA to the consolidated operating profit and Goodwill (in thousands). Financial information for the comparable prior periods presented have been revised to conform with the current year presentation.

​	Revenues
	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
North American Realty	$ 1,219,345	$ 1,404,028	$ 2,056,459	$ 2,405,908
International Realty	11,991	8,908	22,748	16,002
Virbela	1,811	2,040	3,974	3,853
Other Affiliated Services	1,072	1,043	2,749	1,881
Revenues reconciliation:
Segment eliminations	(1,292)	(959)	(2,387)	(1,853)
Consolidated revenues	$ 1,232,927	$ 1,415,060	$ 2,083,543	$ 2,425,791

	Adjusted EBITDA
	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
North American Realty	$ 34,122	$ 39,899	$ 55,325	$ 68,670
International Realty	(3,782)	(3,014)	(7,458)	(4,970)
Virbela	(1,196)	(2,715)	(2,492)	(5,487)
Other Affiliated Services	(1,168)	(747)	(1,849)	(1,576)
Corporate expenses and other	(3,247)	(6,509)	(5,470)	(12,010)
Consolidated Adjusted EBITDA	$ 24,729	$ 26,914	$ 38,056	$ 44,627
Operating Profit Reconciliation:
Depreciation and amortization expense	2,779	2,429	5,358	4,387
Stock compensation expense	8,488	9,230	18,148	17,028
Stock option expense	2,365	3,606	5,126	7,121
Consolidated operating profit	$ 11,097	$ 11,649	$ 9,424	$ 16,091

	Goodwill
	June 30, 2023	December 31, 2022
North American Realty	$ 16,917	$ 16,577
International Realty	-	-
Virbela	8,248	8,248
Other Affiliated Services	2,387	2,387
Segment total	27,552	27,212
Corporate and other	-	-
Consolidated total	$ 27,552	$ 27,212

The Company does not use segment assets to allocate resources or to assess performance of the segments and therefore, total segment assets have not been disclosed.

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12.SUBSEQUENT EVENTS

Quarterly Cash Dividend

On July 28, 2023, the Company’s Board of Directors declared a dividend of $0.05 per share which is expected to be payable on September 4, 2023, to stockholders of record as of the close of business on August 18, 2023. The ex-dividend date is expected to be on or around August 16, 2023. The dividend will be paid in cash.

Loss of “Controlled Company” Status

As reported on a Schedule 13D filed with the Securities and Exchange Commission on December 8, 2017, on or about June 6,  2017, Glenn D. Sanford and Penny Sanford entered into an oral agreement (the “Stockholder Agreement”), pursuant to which Mr. Sanford and Ms. Sanford agreed to vote as a group with respect to the election of our directors and any other matter on which shares of eXp World Holdings, Inc.’s (the “Company”) common stock are entitled to vote. A purpose of the Stockholder Agreement was to enable the Company to qualify as a “controlled company” within the meaning of the NASDAQ listing rules.

On May 14, 2018, the Company’s application to list its common stock on the NASDAQ Global Market was approved and, because Mr. Sanford and Ms. Sanford collectively held more than 50% of the voting power for the election of our directors, the Company qualified as a “controlled company” within the meaning of the NASDAQ rules.

On or about December 17, 2020, Mr. Sanford, Ms. Sanford, Jason Gesing and Eugene Frederick entered into an oral agreement to amend the Stockholder Agreement, pursuant to which Mr. Sanford, Ms. Sanford, Mr. Gesing and Mr. Frederick (collectively, the “Voting Group”) agreed to vote their shares as a group with respect to the election of our directors and any other matter on which the Company’s shares of common stock are entitled to vote. Based on the Voting Group’s most recently filed Schedule 13D/A, as of September 30, 2022, the Voting Group beneficially owned 78,997,394 shares of Common Stock, representing 51.73% of our outstanding shares of Common Stock.

On July 31, 2023, Ms. Sanford and Messrs. Sanford and Gesing filed a Schedule 13D/A disclosing that Mr. Frederick was no longer a member of the Voting Group. Because no person or group holds more than 50% of the voting power for the election of our directors, the Company no longer qualifies as a “controlled company” under NASDAQ rules. Accordingly, following permitted phase-in periods, the Company will be required to, among other things, have a majority of independent directors on its Board of Directors, a compensation committee consisting solely of independent directors and a director nominations process whereby directors are selected by a nominations committee consisting solely of independent directors or by a vote of the Board of Directors in which only independent directors participate.

Adoption of 2023 Equity Incentive Plan

Due to limited shares available for issuance and the upcoming expiration of the 2015 Equity Incentive Plan, the Compensation Committee of the Board approved, and recommended that the Board approve and adopt, a new equity incentive plan to serve as the successor to our 2015 Equity Incentive Plan. The Board adopted the 2023 Equity Incentive Plan on July 28, 2023, and, stockholders holding a majority of the voting power of the Company adopted the Plan on July 29, 2023, by written consent in lieu of a meeting. The 2023 Equity Incentive Plan and a summary of its principal terms and conditions will be set forth in an information statement to be filed with the Securities and Exchange Commission and provided to all of our stockholders.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read together with our condensed consolidated financial statements and related notes included elsewhere in this report. Management’s Discussion and Analysis of Financial Conditions and Results of Operations contain forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements. See “Item 1 A. – Risk Factors” in our 2022 Annual Report and “Item 1 A. – Risk Factors” in this Quarterly Report for a discussion of certain risks, uncertainties and assumptions associated with these statements.

This MD&A is divided into the following sections:

● Overview

● Market Conditions and Industry Trends

● Key Business Metrics

● Results of Operations

● Business Segment Disclosures

● Non-U.S. GAAP Financial Measures

● Liquidity and Capital Resources

● Critical Accounting Policies and Estimates

All dollar amounts are in USD thousands except share amounts and per share data and as otherwise noted.

OVERVIEW

eXp World Holdings empowers the new economy through its people, technology platforms and personal and professional development solutions. Through our brokerage, eXp Realty, we operate one of the world’s fastest-growing real estate brokerages.  We are focused on being the most agent-centric company on the planet and offer our agents a generous commission model, and a thriving community built on our proprietary and unique cloud-based brokerage and collaboration suite.

eXp manages its operations in four operating business segments: North American Realty; International Realty; Virbela; and Other Affiliated Services.

While we do not consider acquisitions a critical element of our ongoing business, we seek opportunities to expand and enhance our portfolio of solutions.

Strategy

Our strategy is to grow organically in North America and certain international markets by increasing our independent agent and broker network. Through our cloud-based operations and technology platform, we strive to achieve customer-focused efficiencies that allow us to increase market share and attain strong returns as we scale our business within the markets in which we operate. By building partnerships and strategically deploying capital, we seek to grow the business and enter into attractive verticals and associated businesses.

Throughout 2022, and during the first six months of 2023, we continued to make progress in achieving our strategic goals, including a 7% increase in our agent count, going from 82,856 agents as of June 30, 2022 to 88,248 agents as of June 30, 2023.  The increase in our agents occurred even though, according to the National Association of Realtors (“NAR”), real estate industry agents declined 1.1% from June 2022 to June 2023.  The expected outcome of these activities will be to better position us to deliver on our full potential, to provide a platform for future growth opportunities, and to achieve our long-term financial goals.

MARKET CONDITIONS AND INDUSTRY TRENDS

In June of 2023, the existing home sales market declined 18.9%, compared to June of 2022 according to the NAR.  Due to the increasing interest rates and increasing inflation, the market began a contraction trend in the second quarter of 2022.

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The Company believes it continues to be well positioned to grow in the current economic climate. We have a strong base of agent support, which should drive organic market share growth, retention and productivity.  Additionally, we have an efficient operating model with lower fixed costs driven by our cloud-based model, with no brick-and-mortar locations.

Regardless of whether the housing market continues to slow or begins to recover, we believe that we are positioned to leverage our low-cost, high-engagement model, affording agents and brokers increased income and ownership opportunities while offering a scalable solution to brokerage owners looking to survive and thrive during fluctuations in economic activity.

National Housing Inventory

According to NAR, inventory of existing homes for sale in the U.S. was 1,080,000 as of June 2023 (preliminary) compared to 1,250,000 at the end of June 2022.

Mortgage Interest Rates

The sharp increase in mortgage rates have continued to negatively impact the demand for homebuying.  Based on Freddie Mac data, the average rate for a 30-year, conventional, fixed rate mortgage was 6.7% in June 2023 vs 5.7% in June 2022.

Housing Affordability Index

According to NAR, the composite housing affordability index decreased to 93.8 for May 2023 (preliminary) from 98.3 for May 2022. When the index is above 100, it indicates that a family earning the median income has sufficient income to purchase a median-priced home, assuming a 20% down payment and ability to qualify for a mortgage. The housing affordability index has been declining year over year due to increasing mortgage rates.

Existing Home Sales Transactions and Prices

According to NAR, seasonally adjusted existing home sale transactions decreased to an annual rate of 4.2 million in June 2023 (preliminary) compared to 5.1 million in June 2022 a decrease of 18.9%.

According to NAR, the nationwide existing home sales median price for June of 2023 (preliminary) was $410,200 compared to $413,800 in June 2022, a decline of 0.9%. Housing inventory was also up to 3.1 months of inventory compared to 2.9 months last year.  

KEY BUSINESS METRICS

Management uses our results of operations, financial condition, cash flows, and key business metrics related to our business and industry to evaluate our performance and make strategic decisions.

The following table outlines the key business metrics that we periodically review:

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
	(in thousands, except transactions and agent count)
Performance:
Agent count	88,248	82,856	88,248	82,856
Real estate sales transactions	119,277	136,074	206,378	238,925
Other real estate transactions	17,922	13,958	33,126	25,412
Volume	$ 48,570,132	$ 57,894,767	$ 81,811,749	$ 99,274,268
Revenue	$ 1,232,927	$ 1,415,060	$ 2,083,543	$ 2,425,791
Gross profit	96,516	107,250	169,573	190,714
Gross margin (%)	7.8%	7.6%	8.1%	7.9%
Adjusted EBITDA(1)	24,729	26,914	38,056	44,627

(1) Adjusted EBITDA is not a measurement of our financial performance under generally accepted accounting principles in the U.S.  and should not be considered as an alternative to net income, operating income, or any other measures derived in accordance with U.S. GAAP. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, see “Non-U.S. GAAP Financial Measures”.

We periodically evaluate trends in certain metrics to track the Company’s performance.

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Our strength is attracting real estate agent and broker professionals that contribute to our growth. Real estate sales transactions are recorded when our agents and brokers represent buyers and/or sellers in the purchase or sale, respectively, of a home. Other real estate transactions are recorded for leases, rentals and referrals.  The number of real estate transactions is a key driver of our revenue and profitability. Transaction volume represents the total sales value for all transactions and is influenced by several market factors, including, but not limited to, the pricing and quality of our services and market conditions that affect home sales, such as macroeconomic factors, local inventory levels, mortgage interest rates, and seasonality. Real estate transaction revenue represents the commission revenue earned by the Company for closed brokerage real estate transactions.

We continue to increase our agents and brokers in the United States, Canada, and certain international locations through the execution of our growth strategies. The rate of growth of our agent and broker base is difficult to predict and is subject to many factors outside of our control, including macroeconomic factors affecting the real estate industry in general. With our unique business model, we anticipate being able to continue to grow for the remainder of the year, despite the less favorable economic outlook.

Settled home sales transactions and volume result from closed real estate transactions and typically change directionally with changes in the market’s existing home sales transactions as reported by NAR, as disproportionate variances are representative of company-specific improvements or shortfalls to the norm. Our home sale transaction performance was directly related to the performance of our agent base over the prior comparative period.

We utilize gross profit and gross margin, financial statement measures based on generally accepted accounting principles in the U.S. (“U.S. GAAP”) to assess eXp’s financial performance from period to period.

Gross profit is calculated from U.S. GAAP reported amounts and equals the difference between revenue and cost of sales. Gross margin is the calculation of gross profit as a percentage of total revenue. Commissions and other agent-related costs represent the cost of sales for the Company. The cost of sales does not include depreciation or amortization expenses as the Company’s assets are not directly used in the production of revenue. Gross profit is based on the information provided in our results of operations or our consolidated statements of comprehensive income and is an important measure of our potential profitability and brokerage performance. For the three months ended June 30, 2023 and 2022 gross profit was $96.5 million, and $107.3 million, respectively. For the three months ended June 30, 2023 and 2022, gross margin was 7.8% and 7.6%, respectively. For the six months ended June 30, 2023 and 2022, gross profit was $169.6 million, and $190.7 million, respectively. For the six months ended June 30, 2023 and 2022, gross margin was 8.1% and 7.9%, respectively. Gross profit decreased in the first six months of 2023 compared to 2022 due to lower revenue related to the slowdown in the housing market.  However, for the first half of 2023 and for the three months ended June 30, 2023, gross margin increased year-over-year primarily due to a lower increase in commissions and agent-related costs due to a lower percentage of agents reaching their commission capping requirements, entitling them to a lower percentage of the home sale commission.

Management also reviews Adjusted EBITDA, which is a non-U.S. GAAP financial measure, to understand and evaluate our core operating performance. Adjusted EBITDA has declined for the first half of 2023 and for the three months ended June 30, 2023 compared to the same periods in 2022 due to lower revenue partially offset by lower operating costs.

Agent and Employee Experience

The Company has embarked on an initiative to better understand both its agents’ and employees’ experiences. In doing so, we have adopted many of the principles of the Net Promoter Score® (“NPS”) across many aspects of our organization. NPS is a measure of customer satisfaction and is measured on a scale between -100 and 100. An NPS above 50 is considered excellent. The Company’s agent NPS was 72 in the second quarter of 2023.

The NPS measure is an important vehicle for delivering on our core value of transparency. While we strive for high satisfaction, it is equally important to investigate a low or unfavorable trending of NPS. As NPS scores are often leading indicators to agents and employees’ future actions, we are able to learn quickly what may be a ‘pain point’ or product that is not meeting its desired objective. We then take that information and translate it into action with an effort to remediate the specific root cause(s) driving the lower score. Our fast and iterative approach has already led to improvements in parts of our business such as agent onboarding, commission transaction processing, and employee benefits.

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RESULTS OF OPERATIONS

Three Months Ended June 30, 2023 compared to the Three Months Ended June 30, 2022

	Three Months Ended	% of	Three Months Ended	% of	Change 2023 vs. 2022
	June 30, 2023	Revenue	June 30, 2022	Revenue	$	%
	(In thousands, except share amounts and per share data)
Statement of Operations Data:
Revenues	$ 1,232,927	100%	$ 1,415,060	100%	($ 182,133)	(13)%
Operating expenses
Commissions and other agent-related costs	1,136,411	92%	1,307,810	92%	(171,399)	(13)%
General and administrative expenses	82,541	7%	91,391	6%	(8,850)	(10)%
Sales and marketing expenses	2,878	-%	4,210	-%	(1,332)	(32)%
Total operating expenses	1,221,830	99%	1,403,411	99%	(181,581)	(13)%
Operating income	11,097	1%	11,649	1%	(552)	(5)%
Other (income) expense
Other (income) expense, net	(1,299)	-%	62	-%	(1,361)	(2,195)%
Equity in losses of unconsolidated affiliates	143	-%	567	-%	(424)	(75)%
Other (income) expense, net	(1,156)	-%	629	-%	(1,785)	(284)%
Income before income tax expense	12,253	1%	11,020	1%	1,233	11%
Income tax expense	2,831	-%	1,661	-%	1,170	70%
Net income	9,422	1%	9,359	1%	63	1%
Add back: Net loss attributable to noncontrolling interest	-	-%	-	-%	-	-%
Net income attributable to eXp World Holdings, Inc.	9,422	1%	9,359	1%	63	1%
Adjusted EBITDA(1)	$ 24,729	2%	$ 26,914	2%	($ 2,185)	(8)%
Earnings per share
Basic	$ 0.06		$ 0.06		($ 0.00)	-%
Diluted	$ 0.06		$ 0.06		$ 0.00	-%
Weighted average shares outstanding
Basic	153,249,120		150,783,418
Diluted	156,693,959		155,816,038

(1) Adjusted EBITDA is not a measurement of our financial performance under U.S. GAAP and should not be considered as an alternative to net income, operating income or any other measures derived in accordance with U.S. GAAP. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, see “Non-U.S. GAAP Financial Measures.”

Three months ended June 30, 2023 consolidated financial highlights, including certain comparisons to the same year-ago quarter:

● Revenue decreased (13)% to $1.2 billion.

● Gross profit decreased (10)% to $96.5 million. 

● Net income of $9.4 million. Earnings per diluted share of $0.06 compared to earnings per diluted share of $0.06 in the same period of prior year. 

● Adjusted EBITDA (a non-GAAP financial measure) of $24.7 million. 

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● As of June 30, 2023, cash and cash equivalents totaled $124.7 million. The company repurchased $48.8 million of common stock during the second quarter of 2023.

● The Company paid a cash dividend for the second quarter of 2023 of $0.045 per share of common stock on May 31, 2023. On July 28, 2023, the Company’s Board of Directors declared a cash dividend of $0.05 per share of common stock for the third quarter of 2023, expected to be paid on September 4, 2023 to stockholders of record on August 18, 2023.

Revenue

Our total revenues were $1.2 billion for the three months ended June 30, 2023 compared to $1.4 billion for the same period in 2022, a decrease of ($182.1) million, or (13)%. Total revenues decreased in the second quarter of 2023 as a result of a decrease in real estate transactions and home prices compared to the same period in 2022 primarily due to the continued decline of the US and Canada residential real estate market.

Commission and Other Agent-Related Costs

Commission and other agent-related costs were $1.1 billion for the three months ended June 30, 2023 compared to $1.3 billion for the same period in 2022, a decrease of ($171.4) million, or (13)%. Commissions and other agent-related costs decreased primarily as a result of a decrease in real estate transactions and home prices compared to the three months ended June 30, 2022 due to the continued decline of the U.S. and Canada residential real estate market.

General and Administrative Expense

General and administrative expenses were $82.5 million for the three months ended June 30, 2023 compared to $91.4 million for the same period in 2022, a decrease of ($8.9) million or (10)%. General and administrative expenses include costs related to wages, stock compensation, and other general overhead expenses. General and administrative expenses decreased as a result of lower stock-based compensation.

Sales and Marketing

Sales and marketing expenses decreased to $2.9 million for the three months ended June 30, 2023 compared to $4.2 million the same period in 2022. The decrease of ($1.3) million is due to decreased advertising to offset the contraction in the real estate market.

Other (Income) Expense

Other (income) in the second quarter of 2023 relates primarily to increased interest income when compared to the second quarter of 2022.

Income Tax Expense (Benefit)

The Company’s provision for income tax expense amounted to $2.8 million and $1.7 million for the three months ended June 30, 2023 and 2022, respectively, which represented effective tax rates of positive 23.20% and 15.16%, respectively. The provision for income tax expense was primarily attributable to increase in income from operations, lower deductible stock-based compensation windfalls and return to provision true-ups in various jurisdictions.

The Company is subject to a wide variety of tax laws and regulations across the jurisdictions where it operates. Regulatory developments from the U.S. or international tax reform legislation could result in an impact to the Company's effective tax rate. The company continues to monitor the Base Erosion and Profit Shifting (BEPS) Integrated Framework provided by the Organization for Economic Co-operation and Development (OECD) including the legislative adoption of Pillar II by countries, and all other tax regulatory changes, to evaluate the potential impact on future periods.

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Six Months Ended June 30, 2023 compared to the Six Months Ended June 30, 2022

	Six Months Ended	% of	Six Months Ended	% of	Change 2023 vs. 2022
	June 30, 2023	Revenue	June 30, 2022	Revenue	$	%
	(In thousands, except share amounts and per share data)
Statement of Operations Data:
Revenues	$ 2,083,543	100%	$ 2,425,791	100%	($ 342,248)	(14)%
Operating expenses
Commissions and other agent-related costs	1,913,970	92%	2,235,077	92%	(321,107)	(14)%
General and administrative expenses	154,308	7%	166,713	7%	(12,405)	(7)%
Sales and marketing expenses	5,841	-%	7,910	-%	(2,069)	(26)%
Total operating expenses	2,074,119	100%	2,409,700	99%	(335,581)	(14)%
Operating income	9,424	-%	16,091	1%	(6,667)	(41)%
Other (income) expense
Other (income) expense, net	(2,179)	-%	472	-%	(2,651)	(562)%
Equity in losses of unconsolidated affiliates	485	-%	884	-%	(399)	(45)%
Total other (income) expense, net	(1,694)	-%	1,356	-%	(3,050)	(225)%
Income before income tax expense	11,118	1%	14,735	1%	(3,617)	(25)%
Income tax (benefit) expense	243	-%	(3,488)	-%	3,731	107%
Net income	10,875	1%	18,223	1%	(7,348)	(40)%
Add back: Net loss attributable to noncontrolling interest	-	-%	18	-%	(18)	(100)%
Net income attributable to eXp World Holdings, Inc.	10,875	1%	18,241	1%	(7,366)	(40)%
Adjusted EBITDA (1)	$ 38,056	2%	$ 44,627	2%	($ 6,571)	(15)%
Earnings per share
Basic	$ 0.07		$ 0.12		($ 0.05)	(42)%
Diluted	$ 0.07		$ 0.12		($ 0.05)	(42)%
Weighted average shares outstanding
Basic	152,899,883		150,049,170
Diluted	156,119,627		156,579,590

(1) Adjusted EBITDA is not a measurement of our financial performance under U.S. GAAP and should not be considered as an alternative to net income, operating income or any other measures derived in accordance with U.S. GAAP. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, see “Non-U.S. GAAP Financial Measures.”

Six months ended June 30, 2023 consolidated financial highlights, including certain comparisons to the same year-ago period:

● Revenue decreased (14)% to $2.1 billion.

● Gross profit decreased (11)% to $169.6 million. 

● Net income of $10.9 million. Earnings per diluted share of $0.07 compared to earnings per diluted share of $0.12 in the same period of prior year. 

● Adjusted EBITDA (a non-GAAP financial measure) of $38.1 million. 

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● As of June 30, 2023, cash and cash equivalents totaled $124.7 million. The company repurchased approximately $78.7 million of common stock during the first half of 2023.

● The Company paid cash dividends for the first six months of 2023 of $0.045 per share of common stock on March 31, 2023 and $0.045 per share of common stock on May 31, 2023.

Revenue

Our total revenues were $2.1 billion for the six months ended June 30, 2023 compared to $2.4 billion for the same period in 2022, a decrease of ($342.2) million, or (14)%. Total revenues decreased in the first half of 2023 primarily as a result of a decrease in real estate transactions and home prices compared to the same period in 2022 primarily due to the decline of the US and Canada residential real estate market.

Commission and Other Agent-Related Costs

Commission and other agent-related costs were $1.9 billion for six months ended June 30, 2023 compared to $2.2 billion for the same period in 2022, a decrease of ($321.1) million, or (14)%. Commissions and other agent-related costs decreased primarily as a result of a decrease in real estate transactions and home prices compared to the period ended June 30, 2022 due to the decline of the U.S. and Canada residential real estate market.

General and Administrative Expense

General and administrative expenses were $154.3 million for the six months ended June 30, 2023 compared to $166.7 million for the same period in 2022, a decrease of ($12.4) million or (7)%. General and administrative expenses include costs related to wages, stock compensation, and other general overhead expenses. General and administrative expenses decreased as a result of lower stock-based compensation, partially offset by increased personnel expenses due to the Company’s increase in employee count to continue to support our agent growth strategy.

Sales and Marketing

Sales and marketing expenses decreased to $5.8 million for the six months ended June 30, 2023 compared to $7.9 million the same period in 2022. The decrease of ($2.1) million is due to decreased advertising to offset the contraction in the real estate market.

Other (Income) Expense

Other (income) in the first half of 2023 relates primarily to increased interest income when compared to the first half of 2022.

Income Tax (Benefit) Expense

The Company’s provision for income tax expense and (benefit from) income taxes amounted to $0.2 million and ($3.5) million for the six months ended June 30, 2023 and 2022, respectively, which represent an effective tax rate of positive 2.20% and negative 23.81%, respectively. The provision for income tax expense was primarily attributable to increase in income from operations, lower deductible stock-based compensation windfalls and return to provision true-ups in various jurisdictions.

The Company is subject to a wide variety of tax laws and regulations across the jurisdictions where it operates. Regulatory developments from the U.S. or international tax reform legislation could result in an impact to the Company's effective tax rate. The company continues to monitor the Base Erosion and Profit Shifting (BEPS) Integrated Framework provided by the Organization for Economic Co-operation and Development (OECD) including the legislative adoption of Pillar II by countries, and all other tax regulatory changes, to evaluate the potential impact on future periods.

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BUSINESS SEGMENT DISCLOSURES

See Note 11 – Segment Information to the consolidated financial statements for additional information regarding our business segments.  The following table reflects the results of each of our reportable segments during the three months ended June 30, 2023 and 2022:

	Three Months Ended	Three Months Ended	Change 2023 vs. 2022
	June 30, 2023	June 30, 2022	$	%
	(In thousands, except share amounts and per share data)
Statement of Operations Data:
Revenues
North American Realty	$ 1,219,345	$ 1,404,028	($ 184,683)	(13)%
International Realty	11,991	8,908	3,083	35%
Virbela	1,811	2,040	(229)	(11)%
Other Affiliated Services	1,072	1,043	29	3%
Segment eliminations	(1,292)	(959)	(333)	(35)%
Total Consolidated Revenues	$ 1,232,927	$ 1,415,060	($ 182,133)	(13)%
Adjusted Segment EBITDA (1)
North American Realty	34,122	39,899	($ 5,777)	(14)%
International Realty	(3,782)	(3,014)	(768)	(25)%
Virbela	(1,196)	(2,715)	1,519	56%
Other Affiliated Services	(1,168)	(747)	(421)	(56)%
Corporate expenses and other	(3,247)	(6,509)	3,262	50%
Total Reported Adjusted EBITDA	$ 24,729	$ 26,914	($ 2,185)	(8)%

North American Realty revenues decreased (13)% in the second quarter of 2023 compared to the same period in 2022 primarily due to decreased real estate transactions and home prices driven by the slowdown in the real estate markets.  Adjusted EBITDA decreased (14)% due to lower revenue, as well as increased general and administrative costs.

International Realty revenues increased 35% in the second quarter of 2023 compared to the same period in 2022 primarily due to increased real estate transactions driven by increased production in previously launched markets. Adjusted EBITDA decreased (25)% in the second of 2023 compared to the same period in 2022 due to growing selling, general and administrative expenses to support the incremental production in existing operations.

Virbela revenues decreased (11)% due to softer customer demands in one-time virtual events. Adjusted EBITDA improved 56% primarily due to workforce reductions and decrease in marketing and advertising expenses.

Other Affiliated Services revenues were relatively flat due to consistent business operations. Adjusted EBITDA decreased (56)% due to increases in selling, general and administrative expenses related to adjusting business initiatives.

Corporate expenses and other contain the costs incurred to operate the corporate parent of eXp Realty.  The decrease in these costs (improved Adjusted EBITDA of 50% in the second quarter of 2023 compared to the same period of 2022) reflect decreased costs primarily due to cost containment initiatives.

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See Note 11 – Segment Information to the consolidated financial statements for additional information regarding our business segments.  The following table reflects the results of each of our reportable segments during the six months ended June 30, 2023 and 2022:

	Six Months Ended	Six Months Ended	Change 2023 vs. 2022
	June 30, 2023	June 30, 2022	$	%
	(In thousands, except share amounts and per share data)
Statement of Operations Data:
Revenues
North American Realty	$ 2,056,459	$ 2,405,908	($ 349,449)	(15)%
International Realty	22,748	16,002	6,746	42%
Virbela	3,974	3,853	121	3%
Other Affiliated Services	2,749	1,881	868	46%
Segment eliminations	(2,387)	(1,853)	(534)	(29)%
Total Consolidated Revenues	$ 2,083,543	$ 2,425,791	($ 342,248)	(14)%
Adjusted Segment EBITDA (1)
North American Realty	55,325	68,670	($ 13,345)	(19)%
International Realty	(7,458)	(4,970)	(2,488)	(50)%
Virbela	(2,492)	(5,487)	2,995	55%
Other Affiliated Services	(1,849)	(1,576)	(273)	(17)%
Corporate expenses and other	(5,470)	(12,010)	6,540	54%
Total Reported Adjusted EBITDA	$ 38,056	$ 44,627	($ 6,571)	(15)%

North American Realty revenues decreased (15)% in the first half of 2023 compared to the same period in 2022 primarily due to decreased real estate transactions and home prices driven by the slowdown in the real estate markets.  Adjusted EBITDA decreased (19)% due to lower revenue, as well as increased general and administrative costs primarily related to increased compensation and personnel related expenses.  

International Realty revenues increased 42% in the first half of 2023 compared to the same period in 2022 primarily due to increased real estate transactions driven by increased production in previously launched markets. Adjusted EBITDA decreased (50)% in the first half of 2023 compared to the same period in 2022 due to growing selling, general and administrative expenses to support the incremental production in existing operations.

Virbela revenues increased 3% due to increased customer contracts partially offset by a decrease in one-time virtual event revenue. Adjusted EBITDA improved 55% primarily due to workforce reductions and decreases in marketing and advertising expenses.

Other Affiliated Services revenues increased 46% due to expansion of SUCCESS® Coaching and SUCCESS® Media, primarily SUCCESS® magazine. Adjusted EBITDA decreased (17)% due to increased selling, general and administrative expenses to support the expansion.

Corporate expenses and other contain the costs incurred to operate the corporate parent of eXp Realty.  The decrease in these costs (improved Adjusted EBITDA of 54% in the first half of 2023 compared to the same period of 2022) reflect decreased costs primarily due to cost containment initiatives.

NON-U.S. GAAP FINANCIAL MEASURES

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, we use Adjusted EBITDA, a non-U.S. GAAP financial measure, to understand and evaluate our core operating performance. This non-GAAP financial measure, which may be different than similarly titled measures used by other companies, is presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S.GAAP.

We define the non-U.S. GAAP financial measure of Consolidated Adjusted EBITDA to mean net income, excluding other income (expense), income tax benefit (expense), depreciation, amortization, impairment charges, stock-based

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compensation expense and stock option expense. Adjusted Segment EBITDA is defined as operating profit plus depreciation and amortization and stock-based compensation expenses. We believe that Consolidated Adjusted EBITDA and Adjusted Segment EBITDA provides useful information about our financial performance, enhances the overall understanding of our past performance and future prospects and allows for greater transparency with respect to a key metric used by our management for financial and operational decision-making. We believe that Adjusted Segment EBITDA helps identify underlying trends in our business that otherwise could be masked by the effect of the expenses that we exclude in Adjusted Segment EBITDA. In particular, we believe the exclusion of stock and stock option expenses, provides a useful supplemental measure in evaluating the performance of our underlying operations and provides better transparency into our results of operations.

We are presenting the non-U.S. GAAP measure of Adjusted EBITDA to assist investors in seeing our financial performance through the eyes of management, and because we believe this measure provides an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.

Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP. There are a number of limitations related to the use of Adjusted EBITDA compared to Net Income (Loss), the closest comparable U.S. GAAP measure. Some of these limitations are that:

● Adjusted EBITDA excludes stock-based compensation expense related to our agent growth incentive program and stock option expense, which have been, and will continue to be for the foreseeable future, significant recurring expenses in our business and an important part of our compensation strategy; and

● Adjusted EBITDA excludes certain recurring, non-cash charges such as depreciation of fixed assets, amortization of intangible assets, and impairment charges related to these long-lived assets, and, although these are non-cash charges, the assets being depreciated, amortized, or impaired may have to be replaced in the future.

The following tables present a reconciliation of Adjusted EBITDA to net income, the most comparable U.S. GAAP financial measure, for each of the periods presented:

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Net income	$ 9,422	$ 9,359	$ 10,875	$ 18,223
Other (income) expense, net	(1,156)	629	(1,694)	1,356
Income tax (benefit) expense	2,831	1,661	243	(3,488)
Depreciation and amortization	2,779	2,429	5,358	4,387
Stock compensation expense (1)	8,488	9,230	18,148	17,028
Stock option expense	2,365	3,606	5,126	7,121
Adjusted EBITDA	$ 24,729	$ 26,914	$ 38,056	$ 44,627

(1) This includes agent growth incentive stock compensation expense and stock compensation expense related to business acquisitions.

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity are our cash and cash equivalents on hand and cash flows generated from our business operations. Our ability to generate sufficient cash flow from operations or to access certain capital markets, including banks, is necessary to fund our operations and capital expenditures, repurchase our common stock, and meet obligations as they become due. At present, our cash and cash equivalents balances and cash flows from operations have strengthened primarily due to transaction volume growth and improved cost leverage over the prior five years, attributable to the expansion of our independent agent and broker network and, to a lesser extent, increased average prices of home sales.

Currently, our primary use of cash on hand is to sustain and grow our business operations, including, but not limited to, commission and revenue share payments to agents and brokers and cash outflows for operating expenses and dividend payments. In addition, the Company has no known material cash requirements as of June 30, 2023, relating to capital expenditures, commitments, or human capital (except as passthrough commissions to agents and brokers concurrent with settled real estate transactions).

For information regarding the Company’s expected cash requirement related to settlement costs, see Note 10 – Commitments and Contingencies.

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We believe that our existing balances of cash and cash equivalents and cash flows expected to be generated from our operations will be sufficient to satisfy our operating requirements for at least the next twelve months. Our future capital requirements will depend on many factors, including our level of investment in technology, our rate of growth into new markets, and cash used to repurchase shares of the Company’s common stock. Our capital requirements may be affected by factors which we cannot control such as the changes in the residential real estate market, interest rates, and other monetary and fiscal policy changes to the manner in which we currently operate. In order to support and achieve our future growth plans, we may need or seek advantageously to obtain additional funding through equity or debt financing. We believe that our current operating structure will facilitate sufficient cash flows from operations to satisfy our expected long-term liquidity requirements beyond the next twelve months.

Net Working Capital

Net working capital is calculated as the Company’s total current assets less its total current liabilities. The following table presents our net working capital as of June 30, 2023 and December 31, 2022:

	June 30, 2023	December 31, 2022
Current assets	$ 356,373	$ 255,113
Current liabilities	(224,454)	(127,299)
Net working capital	$ 131,919	$ 127,814

For the six months ended June 30, 2023, net working capital increased $4.1 million, or 3%, compared to December 31, 2022.

Cash Flows

The following table presents our cash flows for the six months ended June 30, 2023 and 2022:

	Six Months Ended June 30,
	2023	2022
Cash provided by operating activities	$ 154,168	$ 165,298
Cash used in investment activities	(9,962)	(8,077)
Cash used in financing activities	(90,935)	(91,209)
Effect of changes in exchange rates on cash, cash equivalents and restricted cash	620	(1,141)
Net change in cash, cash equivalents and restricted cash	$ 53,891	$ 64,871

For the six months ended June 30, 2023, cash provided by operating activities decreased ($11.1) million compared to the same period in 2022. The change resulted primarily from decreased real estate transactions.

For the six months ended June 30, 2023, cash used in our investing increased primarily due to increased investments in unconsolidated affiliates, partially offset by fewer capital expenditures.

For the six months ended June 30, 2023 and 2022 cash flows used in financing activities primarily were related to stock repurchases and the payment of cash dividends.

Acquisitions

While we do not consider acquisitions a critical element of our ongoing business, we seek opportunities to expand and enhance our portfolio of solutions, access new revenue streams, or otherwise complement or accelerate the growth of our existing operations. We may fund acquisitions or investments in complementary businesses with various sources of capital including existing cash balances and cash flow from operations.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2022, which provides a description of our critical accounting policies. There were no changes to critical accounting policies or estimates as reflected in our 2022 Annual Report. For additional information regarding our critical accounting policies and estimates, see the Critical Accounting Policies and Estimates section of MD&A included in our 2022 Annual Report.

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our exposures to market risk since December 31, 2022. For details on the Company's interest rate and foreign currency exchange, see “Item 7A. Quantitative and Qualitative Information About Market Risks” in our 2022 Annual Report.

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Management is responsible for establishing and maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed in its reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer (as the principal executive officer) and Chief Financial Officer (as the principal financial officer), to allow timely decisions regarding required disclosures.

As of June 30, 2023, an evaluation was conducted by the Company under the supervision and with the participation of its management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer each concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2023.

Changes in Internal Control over Financial Reporting

There were no material changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2023 that have materially affected, or are reasonably believed to be likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

From time to time, we are involved in ordinary routine litigation incidental to the conduct of our business, including matters that may be certified as class or collective actions. The Company believes that it has adequately and appropriately accrued for legal matters. We recognize expense for legal claims when payments associated with the claims become probable and can be reasonably estimated.

Litigation and other legal matters are inherently unpredictable and subject to substantial uncertainties and adverse resolutions could occur. In addition, litigation and other legal matters, including class action lawsuits, government investigations and regulatory proceedings can be costly to defend and, depending on the class size and claims, could be costly to settle. As such, the Company could incur judgments, penalties, sanctions, fines or enter into settlements of claims with liability that are materially in excess of amounts accrued and these settlements could have a material adverse effect on the Company’s financial condition, results of operations or cash flows in any particular period.

Item 1A. RISK FACTORS

The business, financial condition and operating results of the Company can be affected by a number of risks, whether currently known or unknown. For a discussion of our potential risks and uncertainties, please see in Part I, Item 1A of the 2022 Annual Report under the heading “Risk Factors”.  Additional risks not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or results of operations in future periods. Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results and stock price. Except for the risk factors disclosed in Part I, Item 1A of 2022 Annual Report, which are hereby incorporated by reference into this Part II, Item 1A of this Form 10-Q, and the modified risk factors set forth below, there have been no material changes to the Company’s risk factors as disclosed in the 2022 Annual Report. Additions to the risk factors below are designated by underlined text and removals are designated by stricken text.

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Risks Related to Our Industries

Homesale transaction volume can be impacted by natural disasters and other climate-related interruptions.

Natural disasters are occurring more frequently and/or with more intense effects and may impact general population trends. Areas afflicted by natural disasters may experience a decline in home sale transaction volume due to home destruction, and/or general population movement out of the afflicted area, and the risk of non-insurability against such disasters.  Such events can make it difficult or impossible for homeowners and builders to sell their homes and result in slowdowns in home sale transaction volume. Additionally, the risk of non-insurability may disqualify certain prospective homebuyers whether due to heightened mortgage underwriting requirements or the perceived risk of loss to the homebuyer. Because the real estate industry relies on home sale transactions, climate crises can exacerbate negative financial results for real estate companies operating in particularly affected areas.

Risks Related to Our General Business and Operations

Our business could be adversely affected if we are unable to expand, maintain and improve the systems and technologies which we rely on to operate or fail to adopt and integrate new technologies.

As the number of agents and brokers in our company grows, our success will depend on our ability to expand, maintain and improve the technology that supports our business operations, including, but not limited to, our cloud office platform, as well as our ability to adopt and integrate new technologies, including, but not limited to machine learning and artificial intelligence solutions. Loss of key personnel or the lack of adequate staffing with the requisite expertise and training could impede our efforts in this regard. If we do not adopt and offer new in-demand technologies and/or if our systems and technologies lack capacity or quality sufficient to service agents and their clients, then the number of agents who wish to use our products could decrease, the level of client service and transaction volume afforded by our systems could suffer and our costs could increase. In addition, if our systems, procedures or controls are not adequate to provide reliable, accurate and timely financial and other reporting, we may not be able to satisfy regulatory scrutiny or contractual obligations with third parties and may suffer a loss of reputation. Any of these events could negatively affect our financial position.

Cybersecurity incidents could disrupt our business operations, result in the loss of critical and confidential information, adversely impact our reputation and harm our business.

Cybersecurity threats and incidents directed at us could range from uncoordinated individual attempts to gain unauthorized access to information technology systems to sophisticated and targeted measures aimed at disrupting business or gathering personal data of customers. Additionally, bad actors are increasingly using AI technology to launch more automated, targeted and coordinated attacks generally. In the ordinary course of our business, we and our agents and brokers collect and store sensitive data, including proprietary business information and personal information about our clients and customers. Our business and particularly our cloud-based platform, is reliant on the uninterrupted functioning of our information technology systems. The secure processing, maintenance and transmission of information are critical to our operations, especially the processing and closing of real estate transactions. Although we employ measures designed to prevent, detect, address and mitigate these threats (including access controls, data encryption, vulnerability assessments and maintenance of backup and protective systems), cybersecurity incidents, depending on their nature and scope, could potentially result in the misappropriation, destruction, corruption, or unavailability of critical data and confidential or proprietary information (our own or that of third parties, including potentially sensitive personal information of our clients and customers) and the disruption of business operations. Any such compromises to our security could cause harm to our reputation, which could cause customers to lose trust and confidence in us or could cause agents and brokers to stop working for us. In addition, we may incur significant costs for remediation that may include liability for stolen assets or information, repair of system damage and compensation to clients, customers and business partners. We may also be subject to legal claims, government investigation and additional state and federal statutory requirements.

The potential consequences of a material cybersecurity incident include regulatory violations of applicable U.S. and foreign privacy and other laws, reputational damage, loss of market value, litigation with third parties (which could result in our exposure to material civil or criminal liability), diminution in the value of the services we provide to our customers and increased cybersecurity protection and remediation costs (that may include liability for stolen assets or information), which in turn could have a material adverse effect on our competitiveness and results of operations.

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Risks Related to Legal and Regulatory Matters

If we fail to protect the privacy and personal information of our customers, agents or employees, we may be subject to legal claims, government action and damage to our reputation.

Hundreds of thousands of consumers, independent contractors and employees have shared personal information with us during the normal course of our business processing real estate transactions. This includes, but is not limited to, Social Security numbers, annual income amounts and sources, consumer names, addresses, telephone and cell phone numbers and email addresses. To run our business, it is essential for us to store and transmit this sensitive information in our systems and networks. At the same time, we are subject to numerous laws, regulations and other requirements that require businesses like ours to protect the security of personal information, notify customers and other individuals about our privacy practices and limit the use, disclosure, or transfer of personal data across country borders. Regulators in the U.S. and abroad continue to enact comprehensive new laws or legislative reforms imposing significant privacy and cybersecurity restrictions. The result is that we are subject to increased regulatory scrutiny, additional contractual requirements from corporate customers and heightened compliance costs. These ongoing changes to privacy and cybersecurity laws also may make it more difficult for us to operate our business and may have a material adverse effect on our operations. For example, the European Union’s GDPR conferred new and significant privacy rights on individuals (including employees and independent agents) and materially increased penalties for violations. In the U.S., California enacted the California Consumer Privacy Act — which went into full effect in 2021 — imposing new and comprehensive requirements on organizations that collect and disclose personal information about California residents. In March 2017, the New York Department of Financial Services’ cybersecurity regulation went into effect, requiring regulated financial institutions to establish a detailed cybersecurity program. Program requirements include corporate governance, incident planning, data management, system testing, vendor oversight and regulator notification rules. Now, other state regulatory agencies are expected to enact similar requirements following the adoption of the Insurance Data Security Model Law by the National Association of Insurance Commissioners that is consistent with the New York regulation.

Any significant violations of privacy and cybersecurity could result in the loss of new or existing business, litigation, regulatory investigations, the payment of fines, damages and penalties and damage to our reputation, which could have a material adverse effect on our business, financial condition and results of operations.

We could also be adversely affected if legislation or regulations are expanded to require changes in our business practices or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our business, results of operations or financial condition. For example, we have and may continue to incorporate new technologies such as machine learning and artificial intelligence into our processes and systems, which are under increased regulatory scrutiny. We may be required to change our platforms and services due to new laws and/or decisions related to emerging technologies which may decrease our operational efficiency and/or hinder our ability to improve our services.

In addition, while we disclose our information collection and dissemination practices in a published privacy statement on our websites, which we may modify from time to time, we may be subject to legal claims, government action and damage to our reputation if we act or are perceived to be acting inconsistently with the terms of our privacy statement, customer expectations or state, national and international regulations. Our policy and safeguards could be deemed insufficient if third parties with whom we have shared personal information fail to protect the privacy of that information.

The occurrence of a significant claim in excess of our insurance coverage or which is not covered by our insurance in any given period could have a material adverse effect on our financial condition and results of operations during the period. In the event we or the vendors with which we contract to provide services on behalf of our customers were to suffer a breach of personal information, our customers and independent agents could terminate their business with us. Further, we may be subject to claims to the extent individual employees or independent contractors breach or fail to adhere to Company policies and practices and such actions jeopardize any personal information. Our legal liability could include significant defense costs, settlement costs, damages and penalties, plus, damage our reputation with consumers, which could significantly damage our ability to attract customers. Any or all of these consequences would result in a meaningful unfavorable impact on our brand, business model, revenue, expenses, income and margins.

In addition, concern among potential home-buyers or sellers about our privacy practices could result in regulatory investigations, especially in the European Union as related to the GDPR. Additionally, concern among potential home-

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buyers or sellers could keep them from using our services or require us to incur significant expense to alter our business practices or educate them about how we use personal information.

Risks Related to Our Stock

Glenn Sanford, our Chairman and Chief Executive Officer, together with Penny Sanford, a significant shareholder, and Jason Gesing, a director and our Chief Industry Relations Officer and Gene Frederick, a director and agent, own a significant percentage of our stock and have agreed to act as a group on any matter submitted to a vote of our stockholders. As a result, the trading price for our shares may be depressed and they can significantly influence take actions that may be adverse to the interests of our other stockholders.

On July 31, 2023November 2, 2022, Glenn Sanford, Penny Sanford, and Jason Gesing and Gene Frederick filed an amended Schedule 13D with the Securities and Exchange Commission, which disclosed that they beneficially owned approximately 51.73% of our outstanding common stock as of September 30, 2022 and that they had agreed to vote their shares as a group with respect to the election of directors and any other matter on which our shares of common stock are entitled to vote and that they beneficially owned approximately 47.69% of our outstanding common stock as of June 19, 2023. This significant concentration of share ownership may adversely affect the trading price for our common stock because investors may perceive disadvantages in owning stock in a company with a controlling stockholder group holding a significant number of our shares. The group can significantly influence all matters requiring approval by our stockholders, including the election and removal of directors and any proposed merger, consolidation or sale of all or substantially all of our assets. In addition, due to his significant ownership stake and his service as our Principal Executive Officer and Chairman of the Board of Directors, Mr. Sanford significantly influencescontrols the management of our business and affairs. Together, Messrs. Sanford, and Gesing and Frederick hold twothree of our seven board seats. This concentration of ownership and influencecontrol could have the effect of delaying, deferring, or preventing a change in control, or impeding a merger or consolidation, takeover or other business combination that could be favorable to our other stockholders.

We are aUntil July 31, 2023, we were a “controlled company” within the meaning of Nasdaq rules and, as a result, we qualifiedy for and intend to reliedy on, exemptions from certain corporate governance requirements. Under applicable Nasdaq rules, we qualify for and intend to rely on certain phase-in periods to comply with the previously exempt governance requirements.

As of September 30, 2022, Glenn Sanford, Penny Sanford, Jason Gesing and Gene Frederick beneficially owned approximately 51.73% of the total combined voting power of our outstanding common stock. Accordingly On July 31, 2023, Penny Sanford, Glenn Sanford, and Jason Gesing filed a Schedule 13D/A disclosing that Eugene Frederick was no longer a member of the voting group pursuant to which Ms. Sanford and Messrs. Sanford, Gesing and Frederick had previously agreed to vote their shares as a group. Until July 31, 2023, we qualifiedy as a “controlled company” within the meaning of Nasdaq corporate governance standards and, accordingly, we qualified for and from time-to-time relied on exemptions to certain governance requirements.

Under Nasdaq rules, a company may phase-in to compliance with those governance requirements after ceasing to be a “controlled company” a company of which more than 50% of the voting power Nasdaq is held by an individual, group, or another company is a “controlled company” and may elect not to comply with certain Nasdaq corporate governance standards, including:

● the requirement that a majority of the members of our board of directors be independent directors;

● the requirement that our nominating and corporate governance committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and

● the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter for addressing the committee’s purpose and responsibilities.; and

● the requirement for an annual performance evaluation of the nominating and corporate governance and compensation committees.

We intend to use certain of these phase-in exemptions. As a result, we will not have a majority of independent directors, our compensation and our nominating and corporate governance and compensation committees will not consist entirely of independent directors in the immediate future and such committees may not be subject to annual performance evaluations. Consequently, our stockholders will not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance rules and requirements. Our reliance on these

31

exemptionsstatus as a controlled company could make our common stock less attractive to some investors or otherwise harm our stock price.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following table provides information about repurchases of our common stock through the quarter ended June 30, 2023:

Period	Total number of shares purchased	Average price paid per share	Total number of shares purchased as part of publicly announced plans or programs (1)	Approximate dollar value of shares that may yet be purchased under the plans or programs
4/1/2023-4/30/2023	834,013	11.97	834,013	$ 51,518,055
5/1/2023-5/31/2023	1,214,158	$ 13.88	1,214,158	34,523,738
6/1/2023-6/30/2023	1,174,104	18.87	1,174,104	512,527,244
Total	3,222,275	$ 14.91	3,222,275

(1) In December 2018, the Board approved a stock repurchase program authorizing the Company to purchase its common stock. In November 2019, the Board amended the repurchase program, increasing the total amount authorized to be purchased from $25.0 million to $75.0 million. In December 2020, the Board approved another amendment to the repurchase program increasing the total amount authorized to be purchased from $75.0 million to $400.0 million. In May 2022, the Board approved another amendment to the repurchase program increasing the total amount authorized to be purchased from $400.0 million to $500.0 million. In June 2023, the Board approved another amendment to the repurchase program increasing the total amount authorized to be purchased from $500.0 million to $1.0 billion. The stock repurchase program is more fully disclosed in Note 6 – Stockholders’ Equity to the consolidated financial statements.

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 5. OTHER INFORMATION

Quarterly Directors and Officers 10b5-1 Disclosure

During the three months ended June 30, 2023, Jason Gesing, Director and Chief Industry Relations Officer, adopted a Rule 10b5–1 trading arrangement (as defined in Item 408(a)(1)(i) of Regulation S-K). This action took place on May 10, 2023. The duration of the trading arrangement is through July 15, 2024. The aggregate number of shares of the Company’s common stock that may be purchased pursuant to the trading arrangement is 304,960. The aggregate number of shares of the Company’s common stock that may be sold pursuant to the trading arrangement is 304,960.

Adoption of 2023 Equity Incentive Plan

Due to limited shares available for issuance and the upcoming expiration of the 2015 Equity Incentive Plan, the Compensation Committee of the Board approved, and recommended that the Board approve and adopt, a new equity incentive plan to serve as the successor to our 2015 Equity Incentive Plan. The Board adopted the 2023 Equity Incentive Plan on July 28, 2023, and, stockholders holding a majority of the voting power of the Company adopted the Plan on July 29, 2023, by written consent in lieu of a meeting. The 2023 Equity Incentive Plan and a summary of its principal terms and conditions will be set forth in an information statement to be filed with the Securities and Exchange Commission and provided to all of our stockholders.

Amended and Restated Governance Documents

In order to offer the Board and stockholders certain governance efficiencies and to address past drafting errors, the Board approved, and recommended that the stockholders approve, and adopt, an Amended and Restated Certificate of Incorporation of the Company (the “Updated Charter”) and an Amended and Restated Bylaws of the Company (the “Updated Bylaws”). The Board adopted the Updated Charter and Updated Bylaws on July 28, 2023, and, stockholders holding a majority of the voting power of the Company adopted the Updated Charter and Updated Bylaws on July 29, 2023, by written consent in lieu of a meeting. The Updated Charter was filed and effective with the Delaware Secretary

32

of State on August 1, 2023. The Updated Charter and Updated Bylaws are attached hereto as Exhibits 3.1 and 3.2 hereto, respectively, in redline format showing changes made as compared to the previously effective Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws of the Corporation, respectively.

Item 6. EXHIBITS

Exhibit	Exhibit			Incorporated by Reference
Number	Description	Form	Exhibit	Filing Date/Period End Date
3.1	Amended and Restated Certificate of Incorporation	NA	NA	NA
3.2	Amended and Restated Bylaws	NA	NA	NA
4.1	Description of Securities	10-K	4.1	2/28/2023
10.1	Fourth Amendment to eXp World Holdings, Inc. Stock Repurchase Plan	8-K	10.1	5/12/2023
10.2	Fourth Amendment to eXp World Holdings, Inc. Stock Repurchase Program	8-K	NA	5/22/2023
10.3	Fifth Amendment to eXp World Holdings, Inc. Stock Repurchase Plan	8-K	10.1	6/26/2023
13.1	Annual Report on Form 10-K	10-K	NA	2/28/2023
31.1*	Certification of the Chief Executive Officer pursuant to Rule 13a 14(a) under the Securities Exchange Act of 1934
31.2*	Certification of the Chief Financial Officer pursuant to Rule 13a 14(a) under the Securities Exchange Act of 1934
32.1**	Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**	Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* Filed herewith

** Furnished herewith

33

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

August 3, 2023	eXp World Holdings, Inc.
	(Registrant)
	/s/ Jeff Whiteside
	Jeff Whiteside
	Chief Financial Officer (Principal Financial Officer)

34

EX-3.1

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

EXP WORLD HOLDINGS, INC.

EXP WORLD HOLDINGS, INC., a Delaware corporation (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify as follow:

ARTICLE I

Identification

SECTION 1.01. Name. The name of the Corporation is “eXp World Holdings, Inc.” .

ARTICLE II

Purpose

SECTION 2.01. Purpose. The purpose for which the Corporation is organized is to engage in any lawful act or activity for which corporations may be organized under the DGCL.

ARTICLE III

Capital Stock

SECTION 3.01. Amount. The total number of shares of stock which the Corporation has authority to issue is 900,000,000 shares, all of which are designated as Common Stock, having a par value of $0.00001 per share (“Common Stock”).

SECTION 3.02 Common Stock. Except as otherwise required by law or as provided in this Amended and Restated Certificate of Incorporation, the holders of the Common Stock shall exclusively possess all voting power. Each holder of shares of Common Stock shall be entitled to one vote for each such share it holds on each matter submitted to the stockholders on which the holders of shares of Common Stock are entitled to vote.

(B)The holders of shares of Common Stock shall have equal rights of participation in the dividends and other distributions (payable in cash, property, or capital stock of the Corporation) when, as and if declared thereon by the board of directors of the Corporation (the “Board of Directors”) from time to time out of any assets or funds of the Corporation legally available therefor, and shall have equal rights to receive the assets and funds of the Corporation available for distribution to stockholders in the event of any voluntary or involuntary liquidation, dissolution, or winding-up of the Corporation.

ARTICLE IV

Directors

SECTION 4.01. Management of the Corporation. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.

SECTION 4.02. Number. The number of directors of the Corporation shall be limited as provided in the Bylaws and determined exclusively by resolution adopted by a majority of the Whole Board. For purposes of this Amended and Restated Certificate of Incorporation, the term “Whole Board” means the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships.

SECTION 4.03. Election of Directors. The directors shall be elected at the annual meeting of stockholders by such stockholders as have the right to vote on such election. Directors need not be stockholders of the Corporation. Unless required by the Bylaws, the election of the Board of Directors need not be by written ballot.

SECTION 4.04. Vacancies. Any vacancy in the Board of Directors, however occurring, including a vacancy resulting from an enlargement of the Board of Directors, may be filled only by vote of a majority of the directors then in office, even if less than a quorum, or by a sole remaining director.

SECTION 4.05. Amendment of the Bylaws bv the Board. The Board of Directors of the Corporation is expressly authorized to adopt, amend or repeal the Bylaws of the Corporation.

ARTICLE V

Indemnification

SECTION 5.01. Right to Indemnification and Advancement. The Corporation shall indemnify (and advance expenses to) its officers and directors to the fullest extent permitted by the DGCL, as amended from time to time.

ARTICLE VI

Director Liability

SECTION 6.01. Waiver of Liability. A director of the Corporation shall not be personally liable either to the Corporation or to any of its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL. Any amendment or modification or repeal of the foregoing sentence or of the DGCL shall not adversely affect any right or protection of a director of the

Corporation hereunder in respect of any act or omission occurring prior to the time of such amendment, modification, or repeal. If the DGCL hereafter is amended to further eliminate or limit the liability of a director, then a director of the Corporation, in addition to the circumstances in which a director is not personally liable as set forth in the preceding sentence, shall not be liable to the fullest extent permitted by the amended DGCL.

ARTICLE VII

Registered Agent and Registered Office

SECTION 7.01. Registered Agent and Office. The name and street address of the registered agent at the Corporation’s registered office are:

CORPORATION SERVICE COMPANY

251 LITTLE FALLS DRIVE

WILMINGTON, NEW CASTLE COUNTY

DE, 19808

ARTICLE VIII

Quorum Requirement

SECTION 8.01. Quorum. The holders representing a majority of the combined voting power of the capital stock issued and outstanding and entitled to vote at a meeting, present in person or represented by proxy, shall constitute a quorum.

ARTICLE IX

Cumulative Voting

SECTION 9.01. No Cumulative Voting. No holder of any shares of any class of stock of the Corporation shall be entitled to cumulative voting rights in any circumstances.

ARTICLE X

Preemptive Rights

SECTION 10.01. No Preemptive Rights. No stockholder shall have any preemptive rights to acquire unissued shares of the Corporation or securities of the Corporation convertible into or carrying a right to subscribe to or acquire shares.

ARTICLE XI

Internal Corporate Claims

SECTION 11.01. Venue for Internal Corporate Claims. Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery in the State of Delaware shall be the sole and exclusive forum for all “internal corporate claims.” “Internal corporate claims” mean claims, including claims in the right of the Corporation, (i) that are based upon a violation of a duty by a current or former director or officer or stockholder in such capacity or (ii) as to which Title 8 of the Delaware Code confers jurisdiction upon the Court of Chancery, except for, as to each of (i) through (ii) above, any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or for which the Court of Chancery does not have subject matter jurisdiction. If any provision or provisions of this Article XI shall be held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article XI (including, without limitation, each portion of any sentence of this Article XI containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby.

ARTICLE XII

Supermajority Provisions

SECTION 12.01. Amendment of the Certificate of Incorporation by Stockholders. The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Amended and Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation; provided, however, that, notwithstanding any other provision of the Amended and Restated Certificate of Incorporation or any provision of law that might otherwise permit a lesser vote or no vote, but in addition to any vote of the holders of any class or series of the stock of the Corporation required by law or by this Amended and Restated Certificate of Incorporation, the affirmative vote of the holders of at least fifty-one percent (51%) of the voting power of the outstanding shares of stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to amend or repeal, or adopt any provision of this Amended and Restated Certificate of Incorporation inconsistent with Articles IV, V, XI and XII.

SECTION 12.02. Amendments to Bylaws by Stockholders. The stockholders shall also have the power to adopt, amend or repeal the Bylaws of the Corporation; provided, however, that, in addition to any vote of the holders of any class or series of stock of the Corporation required by law or by this Amended and Restated Certificate of Incorporation, the amendment of the Bylaws by the Corporation’s stockholders shall require the affirmative vote of the holders of at least fifty-one percent (51%) of the voting power of all of the then outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.

IN WITNESS WHEREOF, said Corporation has caused this certificate to be signed this 1^st day of August, 2023.

EXP WORLD HOLDINGS, INC.

/s/ James Bramble_______________

James Bramble

Corporate Secretary

EX-3.2

AMENDED AND RESTATED BYLAWS OF

EXP WORLD HOLDINGS, INC.

ARTICLE I

Meeting of Stockholders

Section 1.1.Annual Meetings. If required by applicable law, an annual meeting of stockholders shall be held for the election of directors at such date, time and place, if any, either within or without the State of Delaware, as may be designated by resolution of the board of directors (the “Board of Directors”) of eXp World Holdings, Inc., a Delaware corporation (the “Corporation”) from time to time. Any other proper business may be transacted at the annual meeting.

Section 1.2.Special Meetings. Special meetings of stockholders for any purpose or purposes, unless otherwise prescribed by statute or by the Corporation’s certificate of incorporation, as amended, restated, supplemented or otherwise modified (the “Certificate of Incorporation”), may be called at any time by the Secretary pursuant to a resolution adopted by a majority of the Whole Board (as defined below). Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. For purposes of these Bylaws, the term “Whole Board” shall mean the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships.

Section 1.3.Notice of Meetings. Whenever stockholders are required or permitted to take any action at a meeting, a notice of the meeting shall be given that shall state the place, if any, date and hour of the meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, the record date for determining the stockholders entitled to vote at the meeting (if such date is different from the record date for stockholders entitled to notice of the meeting) and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by law, the Certificate of Incorporation or these Bylaws, the notice of any meeting shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at the meeting as of the record date for determining the stockholders entitled to notice of the meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation.

Section 1.4.Adjournments. Any meeting of stockholders, annual or special, may adjourn from time to time to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for determination of stockholders entitled to vote is fixed for the adjourned meeting, the Board of Directors shall fix as the record date for determining stockholders entitled to notice of such adjourned meeting the same

or an earlier date as that fixed for determination of stockholders entitled to vote at the adjourned meeting, and shall give notice of the adjourned meeting to each stockholder of record as of the record date so fixed for notice of such adjourned meeting.

Section 1.5.  Quorum. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, at each meeting of stockholders the presence in person or by proxy of the holders of not less than a majority of the outstanding shares of stock entitled to vote at the meeting shall be necessary and sufficient to constitute a quorum. In the absence of a quorum, then either (i) the chairperson of the meeting or (ii) a majority of the outstanding shares of stock present (in person or by proxy) and entitled to vote may adjourn the meeting from time to time in the manner provided in Section 1.4 of these Bylaws until a quorum shall attend.

Section 1.6.Organization. Meetings of stockholders shall be presided over by a Chairperson of the meeting designated by the Board of Directors or, in the absence of such designation, by a Chairperson chosen at the meeting by the stockholders. The Secretary shall act as secretary of the meeting, but in his or her absence the Chairperson of the meeting may appoint any person to act as secretary of the meeting.

Section 1.7.Voting; Proxies. Except as otherwise provided by or pursuant to the provisions of the Certificate of Incorporation, each stockholder entitled to vote at any meeting of stockholders shall be entitled to one vote for each share of stock held by such stockholder upon the matter in question. Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary of the Corporation a revocation of the proxy or a new proxy bearing a later date. Voting at meetings of stockholders need not be by written ballot. At meetings of stockholders for the election of directors at which a quorum is present where the number of director nominees is equal to the number of positions on the Board of Directors to be filled through election and proxies are solicited for such election of directors solely by the Corporation, the affirmative vote of a majority of the shares of stock of the Corporation which are voting in the election of directors shall be required to elect. In all other meetings of stockholders for the election of directors at which a quorum is present, a plurality of the votes cast shall be sufficient to elect. All other questions presented to the stockholders at a meeting at which a quorum is present shall, unless otherwise provided by the Certificate of Incorporation, these Bylaws, the rules or regulations of any stock exchange applicable to the Corporation, or applicable law or pursuant to any regulation applicable to the Corporation or its securities, be decided by the affirmative vote of the holders of a majority of the shares of stock of the Corporation which are voting on the matter.

Section 1.8.Fixing Date for Determination of Stockholders of Record.

(A)In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the

resolution fixing the record date is adopted by the Board of Directors, and which record date shall, unless otherwise required by law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board of Directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance herewith at the adjourned meeting.

(B)In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which shall not be more than sixty (60) days prior to such other action. If no such record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

Section 1.9.List of Stockholders Entitled to Vote. The officer who has charge of the stock ledger shall prepare and make a complete list of the stockholders entitled to vote at the meeting (provided, however, if the record date for determining the stockholders entitled to vote is less than ten (10) days before the date of the meeting, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date), arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting at least ten (10) days prior to the meeting (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of meeting or (ii) during ordinary business hours at the principal place of business of the Corporation. If the meeting is to be held at a place, then a list of stockholders entitled to vote at the meeting shall be produced and kept at the time and place of the meeting during the whole time thereof and may be examined by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. Except as otherwise provided by law, the stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list of stockholders required by this Section 1.9 or to vote in person or by proxy at any meeting of stockholders.

Section 1.10.Inspectors of Election. The Corporation may, and shall if required by law, in advance of any meeting of stockholders, appoint one or more inspectors of election, who may be employees of the Corporation or a subsidiary, to act at the meeting or any adjournment thereof and to make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. In the event that no inspector so appointed or designated is able to act at a meeting of stockholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath to execute faithfully the duties of inspector with strict impartiality and according to the best of his or her ability. The inspector or inspectors so appointed or designated shall (i) ascertain the number of shares of capital stock of the Corporation outstanding, (ii) determine the shares of capital stock of the Corporation represented at the meeting and the validity of proxies and ballots, (iii) count all votes and ballots, (iv) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and (v) certify their determination of the number of shares of capital stock of the Corporation represented at the meeting and such inspectors' count of all votes and ballots. Such certification and report shall specify such other information as may be required by law. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of their duties. Unless otherwise provided by the Board of Directors, the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting. No ballot, proxies, votes or any revocation thereof or change thereto, shall be accepted by the inspectors after the closing of the polls unless the Court of Chancery of the State of Delaware upon application by a stockholder shall determine otherwise. In determining the validity and counting of proxies and ballots cast at any meeting of stockholders of the Corporation, the inspectors may consider such information as is permitted by applicable law. No person who is a candidate for an office at an election may serve as an inspector at such election.

Section 1.11.Conduct of Meetings. The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting by the person presiding over the meeting. The Board of Directors may adopt by resolution such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the person presiding over any meeting of stockholders shall have the right and authority to convene and (for any or no reason) to adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such presiding person, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the presiding person of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders entitled to vote at the meeting, their duly authorized and constituted proxies or such other persons as the presiding person of the meeting shall determine; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time

allotted to questions or comments by participants. The presiding person at any meeting of stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant, determine and declare to the meeting that a matter or business was not properly brought before the meeting and if such presiding person should so determine, such presiding person shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board of Directors or the person presiding over the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

Section 1.12.Notice of Stockholder Business and Nominations.

(A)Annual Meetings of Stockholders.

(1)Nominations of persons for election to the Board of Directors of the Corporation and the proposal of other business to be considered by the stockholders may be made at an annual meeting of stockholders only (a) pursuant to the Corporation’s notice of meeting (or any supplement thereto), (b) by or at the direction of the Board of Directors or any committee thereof or (c) by any stockholder of the Corporation who was a stockholder of record of the Corporation at the time the notice provided for in this Section 1.12 is delivered to the Secretary of the Corporation, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 1.12.

(2)For any nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (c) of paragraph (A)(1) of this Section 1.12, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and any such proposed business (other than the nominations of persons for election to the Board of Directors) must constitute a proper matter for stockholder action. To be timely, a stockholder's notice shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the ninetieth (90th) day, nor earlier than the close of business on the one hundred twentieth (120th) day, prior to the first anniversary of the preceding year's annual meeting (provided, however, that in the event that no annual meeting was held in the previous year or if the date of the annual meeting is more than thirty (30) days before or more than seventy (70) days after such anniversary date, notice by the stockholder must be so delivered not earlier than the close of business on the one hundred twentieth (120th) day prior to such annual meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made by the Corporation). In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder's notice as described above. Such stockholder's notice shall set forth: (a) as to each person whom the stockholder proposes to nominate for election as a director (i) all information relating to such person that is required to

be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to and in accordance with Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder, and (ii) such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected; (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the Bylaws of the Corporation, the language of the proposed amendment), the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, (ii) the class or series and number of shares of capital stock of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner, (iii) a description of any agreement, arrangement or understanding with respect to the nomination or proposal between or among such stockholder and/or such beneficial owner, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing, including, in the case of a nomination, the nominee, (iv) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the stockholder's notice by, or on behalf of, such stockholder and such beneficial owners, whether or not such instrument or right shall be subject to settlement in underlying shares of capital stock of the Corporation, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder or such beneficial owner, with respect to securities of the Corporation, (v) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business or nomination, (vi) a representation whether the stockholder or the beneficial owner, if any, intends or is part of a group which intends (a) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve or adopt the proposal or elect the nominee and/or (b) otherwise to solicit proxies or votes from stockholders in support of such proposal or nomination, and (vii) any other information relating to such stockholder and beneficial owner, if any, required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in an election contest pursuant to and in accordance with Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder. The foregoing notice requirements of this Section 1.12 shall be deemed satisfied by a stockholder with respect to business other than a

nomination if the stockholder has notified the Corporation of his, her or its intention to present a proposal at an annual meeting in compliance with applicable rules and regulations promulgated under the Exchange Act and such stockholder's proposal has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual meeting. The Corporation may require any proposed nominee to furnish such other information as the Corporation may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Corporation.

(3)Notwithstanding anything in the second sentence of paragraph (A)(2) of this Section 1.12 to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation at the annual meeting is increased effective after the time period for which nominations would otherwise be due under paragraph (A)(2) of this Section 1.12 and there is no public announcement by the Corporation naming the nominees for the additional directorships at least one hundred (100) days prior to the first anniversary of the preceding year’s annual meeting, a stockholder's notice required by this Section 1.12 shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth (10th) day following the day on which such public announcement is first made by the Corporation.

(B)Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (1) by or at the direction of the Board of Directors or any committee thereof or (2) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is a stockholder of record at the time the notice provided for in this Section 1.12 is delivered to the Secretary of the Corporation, who is entitled to vote at the meeting and upon such election and who complies with the notice procedures set forth in this Section 1.12. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder's notice required by paragraph (A)(2) of this Section 1.12 shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the one hundred twentieth (120th) day prior to such special meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such special meeting or the tenth (10th) day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new

time period (or extend any time period) for the giving of a stockholder's notice as described above.

(C)General.

(1)Except as otherwise expressly provided in any applicable rule or regulation promulgated under the Exchange Act, only such persons who are nominated in accordance with the procedures set forth in this Section 1.12 shall be eligible to be elected at an annual or special meeting of stockholders of the Corporation to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 1.12. Except as otherwise provided by law, the Chairperson of the meeting shall have the power and duty (a) to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 1.12 (including whether the stockholder or beneficial owner, if any, on whose behalf the nomination or proposal is made solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies or votes in support of such stockholder's nominee or proposal in compliance with such stockholder's representation as required by clause (A)(2)(c)(vi) of this Section 1.12) and (b) if any proposed nomination or business was not made or proposed in compliance with this Section 1.12, to declare that such nomination shall be disregarded or that such proposed business shall not be transacted. Notwithstanding the foregoing provisions of this Section 1.12, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or proposed business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 1.12, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.

(2)For purposes of this Section 1.12, “public announcement” shall include disclosure in a press release reported by the Dow Jones News Service, Associated Press or other national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act and the rules and regulations promulgated thereunder.

(3)Notwithstanding the foregoing provisions of this Section 1.12, a stockholder shall also comply with all applicable requirements of the Exchange Act

and the rules and regulations promulgated thereunder with respect to the matters set forth in this Section 1.12; provided however, that any references in these Bylaws to the Exchange Act or the rules and regulations promulgated thereunder are not intended to and shall not limit any requirements applicable to nominations or proposals as to any other business to be considered pursuant to this Section 1.12 (including paragraphs (A)(1)(c) and (B) hereof), and compliance with paragraphs (A)(1)(c) and (B) of this Section 1.12 shall be the exclusive means for a stockholder to make nominations or submit other business (other than, as provided in the penultimate sentence of (A)(2), business other than nominations brought properly under and in compliance with Rule 14a-8 of the Exchange Act, as may be amended from time to time). Nothing in this Section 1.12 shall be deemed to affect any rights (a) of stockholders to request inclusion of proposals or nominations in the Corporation’s proxy statement pursuant to applicable rules and regulations promulgated under the Exchange Act or (b) of the holders of any series of preferred stock to elect directors pursuant to any applicable provisions of the Certificate of Incorporation.

ARTICLE II

Board of Directors

Section 2.1.Number; Qualifications. Subject to the Certificate of Incorporation, the Board of Directors shall consist of not less than three members nor more than eleven members, the number thereof to be determined from time to time by resolution of the Whole Board. Directors need not be stockholders.

Section 2.2.Election; Resignation; Vacancies. All directors shall be elected for terms lasting until the next annual meeting of stockholders following their election, and until their successors are elected and qualified, subject to their earlier death, resignation or removal from the Board of Directors. Any director may resign at any time upon notice given in writing or by electronic transmission to the Corporation. Such resignation shall take effect when such notice is given unless the notice specifies (a) a later effective date, or (b) an effective date determined upon the happening of an event or events. Unless otherwise specified in the notice of resignation, the acceptance of such resignation shall not be necessary to make it effective. Unless otherwise provided by law or the Certificate of Incorporation, any newly created directorship or any vacancy occurring in the Board of Directors for any cause may be filled only by the affirmative votes of a majority of the remaining members of the Board of Directors, although such majority is less than a quorum, and each director so elected shall hold office until the expiration of the term of office of the director whom he or she has replaced or until his or her successor is elected and qualified.

Section 2.3.    Removal. Any one or more or all of the directors may be removed, with or without cause, by the holders of at least a majority of the outstanding shares of capital stock then entitled to vote at an election of directors.

Section 2.4.Regular Meetings. Regular meetings of the Board of Directors may be held at such places within or without the State of Delaware and at such times as the Board of Directors may from time to time determine.

Section 2.5.Special Meetings. Special meetings of the Board of Directors may be held at any time or place within or without the State of Delaware whenever called by any two members of the Board of Directors. Notice of a special meeting of the Board of Directors shall be given by the person or persons calling the meeting either by first class United States mail at least three days before such special meeting, or by overnight mail, courier service, electronic transmission, or hand delivery at least 48 hours before the special meeting or such shorter period as is reasonable under the circumstances.

Section 2.6.Telephonic Meetings Permitted. Members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting thereof by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this by-law shall constitute presence in person at such meeting.

Section 2.7.Quorum; Vote Required for Action. At all meetings of the Board of Directors the directors entitled to cast a majority of the votes of the Whole Board shall constitute a quorum for the transaction of business. In the event one or more of the directors shall be disqualified to vote at any meeting, then the required quorum shall be reduced by one for each such director so disqualified; provided, however, that in no case shall less than one-third (1/3) of the total number of directors constitute a quorum. Except in cases in which the Certificate of Incorporation, these Bylaws or applicable law otherwise provides, a majority of the votes entitled to be cast by the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.

Section 2.8.Organization. Meetings of the Board of Directors shall be presided over by the Chairperson of the Board of Directors or, in his or her absence, by a Chairperson chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his or her absence, the Chairperson of the meeting may appoint any person to act as secretary of the meeting.

Section 2.9.Action by Unanimous Consent of Directors. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing or by electronic transmission and the writing or writings or electronic transmissions are filed with the minutes of proceedings of the board or committee in accordance with applicable law.

Section 2.10.Chairperson of the Board and Vice-Chairperson of the Board. The Board of Directors may elect one or more of its members to serve as Chairperson or Vice Chairperson of the Board and may fill any vacancy in such position at such time and in such manner as the Board of Directors shall determine. The Chairperson of the Board, if any, shall preside at all meetings of the Board of Directors at which he or she is present and shall perform such duties and possess such

powers as are designated by the Board of Directors. If the Board of Director appoints a Vice Chairperson of the Board, he or she shall, in the absence or disability of the Chairperson of the Board perform the duties and exercise the powers of the Chairperson of the Board and shall perform such other duties and possess such other powers as may from time to time be designated by the Board of Directors. The fact that a person serves as either Chairperson or Vice Chairperson of the Board shall not make such person considered an officer of the Corporation.

ARTICLE III

Committees

Section 3.1.Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent permitted by law and to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it.

Section 3.2.Committee Rules. Unless the Board of Directors otherwise provides, each committee designated by the Board of Directors may make, alter and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to Article II of these Bylaws.

ARTICLE IV

Officers

Section 4.1.Officers. The officers of the Corporation shall consist of a Chief Executive Officer, a Chief Financial Officer, a President, one or more Vice Presidents, a Secretary, a Treasurer and such other officers as the Board of Directors may from time to time determine, which may include, without limitation, one or more Vice Presidents, Assistant Secretaries or Assistant Treasurers. Each of the Corporation’s officers shall be elected by the Board of Directors, each to have such authority, functions or duties as set forth in these Bylaws or as determined by the Board of Directors. Each officer shall be chosen by the Board of Directors and shall hold office for such term as may be prescribed by the Board of Directors and until such person’s successor shall have been duly chosen and qualified, or until such person's earlier death, disqualification, resignation or removal.

Section 4.2.Removal, Resignation and Vacancies. Any officer of the Corporation may be removed, with or without cause, by the Board of Directors, without prejudice to the rights, if

any, of such officer under any contract to which it is a party. Any officer may resign at any time upon notice given in writing or by electronic transmission to the Corporation. Such resignation shall take effect when such notice is given unless the notice specifies (a) a later effective date, or (b) an effective date determined upon the happening of an event or events, such as the failure to receive the required vote for reelection as a director and the acceptance of such resignation by the Board of Directors. Unless otherwise specified in the notice of resignation, the acceptance of such resignation shall not be necessary to make it effective. If any vacancy occurs in any office of the Corporation, the Board of Directors may elect a successor to fill such vacancy for the remainder of the unexpired term and until a successor shall have been duly chosen and qualified.

Section 4.3.Chief Executive Officer. The Chief Executive Officer shall have general supervision and direction of the business and affairs of the Corporation and shall be responsible for corporate policy and strategy. Unless otherwise provided in these Bylaws or by the Board, all other officers of the Corporation shall report directly to the Chief Executive Officer. In the absence of a separately appointed President, the Chief Executive Officer shall be the President.

Section 4.4.President. The President shall perform such duties as the Board of Directors may from time to time determine. The President shall, when requested, counsel with and advise the other officers of the Corporation.

Section 4.5.Chief Operating Officer. The Chief Operating Officer shall be the chief operating officer of the Corporation, with general responsibility for the management and control of the operations of the Corporation and shall perform such other duties as the Board of Directors may from time to time determine. The Chief Operating Officer shall, when requested, counsel with and advise the other officers of the Corporation.

Section 4.6.Chief Financial Officer. The Chief Financial Officer shall exercise all the powers and perform the duties of the office of the chief financial officer and in general have overall supervision of the financial operations of the Corporation and shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital retained earnings, and shares. The Chief Financial Officer shall, when requested, counsel with and advise the other officers of the Corporation and shall perform such other duties as the Board of Directors may from time to time determine. In the absence of a separately appointed Treasurer, the Chief Financial Officer shall be the Treasurer.

Section 4.7.Vice Presidents. The Vice President shall have such powers and duties as shall be prescribed by his or her superior officer or the Chief Executive Officer. A Vice President shall, when requested, counsel with and advise the other officers of the Corporation and shall perform such other duties as the Board of Directors may from time to time determine.

Section 4.8.Treasurer. The Treasurer shall supervise and be responsible for all the funds and securities of the Corporation, the deposit of all moneys and other valuables to the credit of the Corporation in depositories of the Corporation, borrowings and compliance with the provisions of all indentures, agreements and instruments governing such borrowings to which the Corporation is a party, the disbursement of funds of the Corporation and the investment of its funds, and in

general shall perform all of the duties incident to the office of the Treasurer. The Treasurer shall, when requested, counsel with and advise the other officers of the Corporation and shall perform such other duties as the Board of Directors may from time to time determine.

Section 4.9.Secretary. The secretary shall attend all sessions of the Board of Directors and all meetings of the stockholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose and shall perform like duties for committees when required. He or she shall give, or cause to be given, notice of all meetings of the stockholders and meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or the president. The secretary shall keep in safe custody the seal of the Corporation and have authority to affix the seal to all documents requiring it and attest to the same.

Section 4.10.Additional Matters. The Chief Executive Officer and the Chief Financial Officer of the Corporation shall have the authority to designate employees of the Corporation to have the title of Assistant Vice President, Assistant Treasurer or Assistant Secretary. Any employee so designated shall have the powers and duties determined by the officer making such designation. The persons upon whom such titles are conferred shall not be deemed officers of the Corporation unless elected by the Board of Directors.

Section 4.11.Execution of Contracts and Instruments. All contracts, deeds, mortgages, bonds, certificates, checks, drafts, bills of exchange, notes and other instruments or documents to be executed by or in the name of the Corporation shall be signed on the corporation’s behalf by such officer or officers, or other person or persons, as may be so authorized (i) by the Board of Directors, or (ii) subject to such limitations, if any, as the Board of Directors may impose, by the Chief Executive Officer. Such authority may be general or confined to specific instances and, if the Board of Directors or Chief Executive Officer (whichever grants authority) so authorizes or otherwise directs, may be delegated by the authorized officers to other persons. Unless otherwise provided in such resolution, any resolution of the Board of Directors or a committee thereof authorizing the Corporation to enter into any such instruments or documents or authorizing their execution by or on behalf of the Corporation shall be deemed to authorize the execution thereof on its behalf by the Chief Executive Officer, the President, Chief Financial Officer or any Vice President (an “Authorized Officer”). Furthermore, each Authorized Officer shall be authorized to enter into any contract or execute any instrument in the name of and on behalf of the Corporation in matters arising in the ordinary course of the Corporation’s business and to the extent incident to the normal performance of such Authorized Officer’s duties.

ARTICLE V

Stock

Section 5.1.Certificates. The shares of the Corporation may be certificated or uncertificated in accordance with the Delaware General Corporation Law and shall be entered in the books of the Corporation and registered as they are issued. The issue of shares in uncertificated form shall not affect shares represented by a certificate until the certificate is surrendered to the Corporation. Any certificates representing shares of the Corporation’s stock shall be in such form as may be prescribed by law and by the Board of Directors, certifying the number and class of

shares owned by such stockholder in the Corporation. Every holder of stock represented by certificates shall be entitled to have a certificate signed by any two authorized officers of the Corporation certifying the number of shares owned by such holder in the Corporation. Any of or all the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent, or registrar at the date of issue.

Section 5.2.Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates. The Corporation may issue (i) a new certificate of stock or (ii) uncertificated shares in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner's legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.

ARTICLE VI

Indemnification and Advancement of Expenses

Section 6.1.Right to Indemnification. The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (a “Covered Person”) who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, limited liability company, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except as otherwise provided in Section 6.3, the Corporation shall be required to indemnify a Covered Person in connection with a proceeding (or part thereof) commenced by such Covered Person only if the commencement of such proceeding (or part thereof) by the Covered Person was authorized in the specific case by the Board of Directors of the Corporation.

Section 6.2.Prepayment of Expenses. The Corporation shall to the fullest extent not prohibited by applicable law pay the expenses (including attorneys’ fees) incurred by a Covered Person in defending any proceeding in advance of its final disposition, provided, however, that, to the extent required by law, such payment of expenses in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by the Covered Person to repay all amounts advanced if it should be ultimately determined that the Covered Person is not entitled to be indemnified under this Article VI or otherwise.

Section 6.3.Claims. If a claim for indemnification (following the final disposition of such proceeding) or advancement of expenses under this Article VI is not paid in full within thirty (30) days after a written claim therefor by the Covered Person has been received by the Corporation, the Covered Person may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim to the fullest extent permitted by law. In any such action, the Corporation shall have the burden of proving that the Covered Person is not entitled to the requested indemnification or advancement of expenses under applicable law.

Section 6.4.Nonexclusivity of Rights. The rights conferred on any Covered Person by this Article VI shall not be exclusive of any other rights which such Covered Person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, these Bylaws, agreement, vote of stockholders or disinterested directors or otherwise.

Section 6.5.Other Sources. The Corporation’s obligation, if any, to indemnify or to advance expenses to any Covered Person who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership, limited liability company, joint venture, trust, enterprise or nonprofit entity shall be reduced by any amount such Covered Person may collect as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, enterprise or non- profit enterprise.

Section 6.6.Amendment or Repeal. Any right to indemnification or to advancement of expenses of any Covered Person arising hereunder shall not be eliminated or impaired by an amendment to or repeal of these Bylaws after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought.

Section 6.7.Other Indemnification and Advancement of Expenses. This Article VI shall not limit the right of the Corporation, to the extent and in the manner permitted by law, to indemnify and to advance expenses to persons other than Covered Persons when and as authorized by appropriate corporate action.

ARTICLE VII

Business Combinations

Section 7.1.Opt Out of DGCL 203. The Corporation shall not be governed by Section 203 of the DGCL.

ARTICLE VIII

Miscellaneous

Section 8.1.Fiscal Year. The fiscal year of the Corporation shall be determined by resolution of the Board of Directors.

Section 8.2.Seal. The corporate seal shall have the name of the Corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board of Directors.

Section 8.3.Method of Notice. Whenever notice is required by law, the Certificate of Incorporation or these Bylaws to be given by the Corporation to any director, committee member or stockholder, personal notice shall not be required and any such notice may be given in writing (a) by mail, addressed to such director, committee member or stockholder at his or her address as it appears on the books of the Corporation, or (b) by any other method permitted by law (including, but not limited to, overnight courier service, facsimile, electronic mail or other means of electronic transmission) directed to the addressee at his, her or its address most recently provided to the Corporation. Any notice given by the Corporation by mail shall be deemed to have been given at the time when deposited in the United States mail. Any notice given by the Corporation by overnight courier service shall be deemed to have been given when delivered to such service. Any notice given by the Corporation by facsimile, electronic mail or other means of electronic transmission that generally can be accessed by or on behalf of the receiving party at substantially the same time as it is transmitted shall be deemed to have been given when transmitted, unless the Corporation receives a prompt reply that such transmission is undeliverable to the address to which it was directed.

Section 8.4.Waiver of Notice. Whenever any notice is required to be given under the provisions of the statutes or of the Certificate of Incorporation or of these Bylaws, a waiver thereof in writing, signed by the person or persons entitled to such notice, or a waiver by electronic transmission by the person entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

Section 8.5.Form of Records. Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or by means of, or be in the form of, any information storage device or method, provided that the records so kept can be converted into clearly legible paper form within a reasonable time.

Section 8.6.Amendment of Bylaws. Subject to any additional votes set forth in the Certificate of Incorporation or these Bylaws, these Bylaws may be amended or repealed or new Bylaws may be adopted by the stockholders or by the Board of Directors. Notwithstanding any provision of these Bylaws, the Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote or no vote, in addition to any vote of the holders of any class or series of stock of the Corporation required by law or by the Certificate of Incorporation, the amendment or repeal of all or any portion of Articles I, II, VI, VIII or this Section 8.6 by the stockholders of the Corporation shall require the affirmative vote of the holders of at least fifty-one percent (51%) of the then outstanding shares of capital stock entitled to vote generally in the election of directors.

Section 8.7.Registered Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and

to vote as such owner and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of another person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

Section 8.8.Facsimile Signature. In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these Bylaws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board of Directors or a committee thereof.

EX-32.2

Exhibit 32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C.
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the annual report of eXp World Holdings, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2023 as filed with the Securities and Exchange Commission (the “Report”), I, Jeff Whiteside, the Chief Financial Officer of the Company, hereby certify pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	August 3, 2023
By:	/s/ Jeff Whiteside
	Jeff Whiteside
	Chief Financial Officer (Principal Financial Officer)

EX-31.1

Exhibit 31.1

Certification of the Chief Executive Officer pursuant to Rule
13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

I, Glenn Sanford, hereby certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of eXp World Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 3, 2023
By:	/s/ Glenn Sanford
	Glenn Sanford
	Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification of the Chief Financial Officer pursuant to Rule
13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

I, Jeff Whiteside, hereby certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of eXp World Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

February 25, 2021
Date:	August 3, 2023
By:	/s/ Jeff Whiteside
	Jeff Whiteside
	Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C.
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the annual report of eXp World Holdings, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2023 as filed with the Securities and Exchange Commission (the “Report”), I, Glenn Sanford, the Chief Executive Officer of the Company, hereby certify pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	August 3, 2023
By:	/s/ Glenn Sanford
	Glenn Sanford
	Chief Executive Officer (Principal Executive Officer)

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2023 shares
Document And Entity Information
Document Type	10-Q
Document Period End Date	Jun. 30, 2023
Document Quarterly Report	true
Document Transition Report	false
Entity Registrant Name	EXP WORLD HOLDINGS, INC.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-38493
Entity Tax Identification Number	98-0681092
Entity Address, Address Line One	2219 Rimland Drive, Suite 301
Entity Address, City or Town	Bellingham
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	98226
City Area Code	360
Local Phone Number	685-4206
Title of 12(b) Security	Common Stock, $0.00001 par value per share
Trading Symbol	EXPI
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	153,588,186
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001495932
Amendment Flag	false

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
CURRENT ASSETS
Cash and cash equivalents	$ 124,714	$ 121,594
Restricted cash	88,560	37,789
Accounts receivable, net of allowance for credit losses of $1,544 and $4,014, respectively	134,998	87,262
Prepaids and other assets	8,101	8,468
TOTAL CURRENT ASSETS	356,373	255,113
Property, plant, and equipment, net	15,224	18,151
Operating lease right-of-use assets	32	2,127
Other noncurrent assets	6,567	1,703
Intangible assets, net	11,728	8,700
Deferred tax assets	65,306	68,676
Goodwill	27,552	27,212
TOTAL ASSETS	482,782	381,682
CURRENT LIABILITIES
Accounts payable	7,321	10,391
Customer deposits	88,643	37,789
Accrued expenses	128,461	78,944
Current portion of lease obligation - operating lease	29	175
TOTAL CURRENT LIABILITIES	224,454	127,299
Long-term payable	5	4,697
Long-term lease obligation - operating lease, net of current portion	3	694
TOTAL LIABILITIES	224,462	132,690
EQUITY
Common Stock, $0.00001 par value 900,000,000 shares authorized; 177,900,083 issued and 153,588,186 outstanding at June 30, 2023; 171,656,030 issued and 152,839,239 outstanding at December 31, 2022	2	2
Additional paid-in capital	701,806	611,872
Treasury stock, at cost: 24,311,897 and 18,816,791 shares held, respectively	(463,738)	(385,010)
Accumulated earnings	18,138	20,723
Accumulated other comprehensive income	943	236
Total eXp World Holdings, Inc. stockholders' equity	257,151	247,823
Equity attributable to noncontrolling interest	1,169	1,169
TOTAL EQUITY	258,320	248,992
TOTAL LIABILITIES AND EQUITY	$ 482,782	$ 381,682

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
CONDENSED CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance for credit losses and bad debt	$ 1,544	$ 4,014
Common stock, par value	$ 0.00001	$ 0.00001
Common stock, shares authorized	900,000,000	900,000,000
Common stock, shares issued	177,900,083	171,656,030
Common stock, shares outstanding	153,588,186	152,839,239
Treasury stock, shares	24,311,897	18,816,791

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Revenues	$ 1,232,927	$ 1,415,060	$ 2,083,543	$ 2,425,791
Operating expenses
Commissions and other agent-related costs	1,136,411	1,307,810	1,913,970	2,235,077
General and administrative expenses	82,541	91,391	154,308	166,713
Sales and marketing expenses	2,878	4,210	5,841	7,910
Total operating expenses	1,221,830	1,403,411	2,074,119	2,409,700
Operating income	11,097	11,649	9,424	16,091
Other (income) expense
Other (income) expense, net	(1,299)	62	(2,179)	472
Equity in losses of unconsolidated affiliates	143	567	485	884
Total other (income) expense, net	(1,156)	629	(1,694)	1,356
Income before income tax expense	12,253	11,020	11,118	14,735
Income tax (benefit) expense	2,831	1,661	243	(3,488)
Net income	9,422	9,359	10,875	18,223
Net income attributable to noncontrolling interest				18
Net income attributable to eXp World Holdings, Inc.	$ 9,422	$ 9,359	$ 10,875	$ 18,241
Earnings per share - Basic	$ 0.06	$ 0.06	$ 0.07	$ 0.12
Earnings per share - Diluted	$ 0.06	$ 0.06	$ 0.07	$ 0.12
Weighted average shares outstanding - Basic	153,249,120	150,783,418	152,899,883	150,049,170
Weighted average shares outstanding - Diluted	156,693,959	155,816,038	156,119,627	156,579,590
Comprehensive income:
Net income	$ 9,422	$ 9,359	$ 10,875	$ 18,223
Comprehensive loss attributable to noncontrolling interests				18
Net income attributable to eXp World Holdings, Inc.	9,422	9,359	10,875	18,241
Other comprehensive income:
Foreign currency translation gain (loss), net of tax	64	(1,182)	707	(1,141)
Comprehensive income attributable to eXp World Holdings, Inc.	$ 9,486	$ 8,177	$ 11,582	$ 17,100

XML

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands	Common Stock	Treasury Stock	Additional Paid-In Capital	Accumulated earnings (deficit)	Accumulated other comprehensive income (loss)	Noncontrolling Interest	Total
Beginning of period at Dec. 31, 2021	$ 1	$ (210,009)	$ 401,479	$ 30,510	$ 188	$ 1,364
Repurchase of common stock		(79,820)
Net income				18,241		(18)	$ 18,223
Dividends declared and paid				(11,744)
Shares issued for stock options exercised			778
Agent growth incentive stock compensation			13,268
Stock option compensation			7,116
Agent equity stock compensation	1		86,835
Foreign currency translation gain (loss)					(1,141)		(1,141)
Transactions with noncontrolling interests						(177)
Ending of period at Jun. 30, 2022	2	(289,829)	509,476	37,007	(953)	1,169	256,872
Beginning of period at Mar. 31, 2022	2	(239,965)	450,570	33,533	229	1,169
Repurchase of common stock		(49,864)
Net income				9,359			9,359
Dividends declared and paid				(5,885)
Shares issued for stock options exercised			280
Agent growth incentive stock compensation			6,685
Stock option compensation			3,606
Agent equity stock compensation			48,335
Foreign currency translation gain (loss)					(1,182)		(1,182)
Ending of period at Jun. 30, 2022	2	(289,829)	509,476	37,007	(953)	1,169	256,872
Beginning of period at Dec. 31, 2022	2	(385,010)	611,872	20,723	236	1,169	248,992
Repurchase of common stock		(78,728)
Net income				10,875			10,875
Dividends declared and paid				(13,460)
Shares issued for stock options exercised			1,253
Agent growth incentive stock compensation			17,903
Stock option compensation			5,126
Agent equity stock compensation			65,652
Foreign currency translation gain (loss)					707		707
Ending of period at Jun. 30, 2023	2	(463,738)	701,806	18,138	943	1,169	258,320
Beginning of period at Mar. 31, 2023	2	(414,926)	650,383	15,580	879	1,169
Repurchase of common stock		(48,812)
Net income				9,422			9,422
Dividends declared and paid				(6,864)
Shares issued for stock options exercised			946
Agent growth incentive stock compensation			9,236
Stock option compensation			2,365
Agent equity stock compensation			38,876
Foreign currency translation gain (loss)					64		64
Ending of period at Jun. 30, 2023	$ 2	$ (463,738)	$ 701,806	$ 18,138	$ 943	$ 1,169	$ 258,320

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
OPERATING ACTIVITIES
Net income	$ 10,875	$ 18,223
Reconciliation of net income to net cash provided by operating activities:
Depreciation expense	4,163	3,570
Amortization expense - intangible assets	1,195	817
Loss on dissolution of consolidated affiliates		361
Allowance for credit losses on receivables/bad debt on receivables	(2,470)	608
Equity in loss of unconsolidated affiliates	485	884
Agent growth incentive stock compensation expense	18,148	17,028
Stock option compensation	5,126	7,121
Agent equity stock compensation expense	65,652	86,835
Deferred income taxes, net	3,370	(6,892)
Changes in operating assets and liabilities:
Accounts receivable	(45,266)	(22,269)
Prepaids and other assets	367	2,236
Customer deposits	50,854	25,893
Accounts payable	(3,069)	(1,152)
Accrued expenses	49,273	31,961
Long term payable	(4,692)
Other operating activities	157	74
NET CASH PROVIDED BY OPERATING ACTIVITIES	154,168	165,298
INVESTING ACTIVITIES
Purchases of property, plant, equipment	(3,433)	(8,077)
Investments in unconsolidated affiliates	(5,350)
Capitalized software development costs in intangible assets	(1,179)
NET CASH USED IN INVESTING ACTIVITIES	(9,962)	(8,077)
FINANCING ACTIVITIES
Repurchase of common stock	(78,728)	(79,820)
Proceeds from exercise of options	1,253	780
Transactions with noncontrolling interests		(425)
Dividends declared and paid	(13,460)	(11,744)
NET CASH USED IN FINANCING ACTIVITIES	(90,935)	(91,209)
Effect of changes in exchange rates on cash, cash equivalents and restricted cash	620	(1,141)
Net change in cash, cash equivalents and restricted cash	53,891	64,871
Cash, cash equivalents and restricted cash, beginning balance	159,383	175,910
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ENDING BALANCE	213,274	240,781
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash paid for income taxes	1,833	2,444
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Termination of lease obligation - operating lease	837
Property, plant and equipment purchases in accounts payable		$ 246
Property, plant and equipment increase due to transfer of right-of-use lease asset.	$ 1,100

XML

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2023

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

eXp World Holdings, Inc. (“eXp,” or, collectively with its subsidiaries, the “Company,” “we,” “us,” or “our”) owns and operates a diversified portfolio of service-based businesses whose operations benefit substantially from utilizing our technology platform. We strategically prioritize our efforts to grow our real estate brokerage by strengthening our agent value proposition, developing immersive and cloud-based technology to enable our model and providing affiliate and media services supporting those efforts. Our real estate brokerage is now one of the largest and fastest-growing real estate brokerage companies in the United States and Canada and is rapidly expanding internationally.

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

These interim financial statements should be read in conjunction with the audited consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 28, 2023 (“2022 Annual Report”).

In our opinion, the accompanying interim unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation. Operating results for the six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

Effective in December 2022, the Company revised the presentation of segment information to reflect changes in the way the Company manages and evaluates the business.  As such, we now report operating results through four reportable segments: North American Realty, International Realty, Virbela and Other Affiliated Services, as further discussed in Note 11 – Segment Information.  Accordingly, certain amounts in the prior years’ consolidated financial statements have been revised to conform to the current year presentation. See additional information in Note 11 –Segment Information.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of eXp and its consolidated subsidiaries, including those entities in which we have a variable interest of which we are the primary beneficiary. If the Company has a variable interest in an entity but it is not the primary beneficiary of the entity or exercises control over the operations and has less than 50% ownership, it will use the equity method or the cost method of accounting for investments. Entities in which the Company has less than a 20% investment and where the Company does not exercise significant influence are accounted for under the cost method. Intercompany transactions and balances are eliminated upon consolidation.

Variable interest entities and noncontrolling interests

A company is deemed to be the primary beneficiary of a variable interest entity (“VIE”) and must consolidate the entity if the company has both: (i) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, and (ii) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

Joint ventures

A joint venture is a contractual arrangement whereby the Company and other parties undertake an economic activity through a jointly controlled entity. Joint control exists when strategic, financial, and operating policy decisions relating to the activities require the unanimous consent of the parties sharing control. Joint ventures are accounted for using the equity method and are recognized initially at cost.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to allowance for credit losses, legal contingencies, income taxes, revenue recognition, stock-based compensation, goodwill, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Reclassifications

When necessary, the Company will reclassify certain amounts in prior-period financial statements to conform to the current period’s presentation. No reclassifications occurred during the current period.

Restricted cash

Restricted cash consists of cash held in escrow by the Company on behalf of real estate buyers. The Company recognizes a corresponding customer deposit liability until the funds are released. Once the cash transfers from escrow, the Company reduces the respective customers’ deposit liability.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown on the condensed consolidated statements of cash flows.

	Cash and cash equivalents	Restricted cash	Total
Balance, December 31, 2021	$ 108,237	$ 67,673	$ 175,910
Balance, June 30, 2022	$ 134,898	$ 105,883	$ 240,781
Balance, December 31, 2022	$ 121,594	$ 37,789	$ 159,383
Balance, June 30, 2023	$ 124,714	$ 88,560	$ 213,274

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EXPECTED CREDIT LOSSES

6 Months Ended

Jun. 30, 2023

EXPECTED CREDIT LOSSES [Abstract]

EXPECTED CREDIT LOSSES

3. EXPECTED CREDIT LOSSES

The Company is exposed to credit losses primarily through trade and other financing receivables arising from revenue transactions. The Company uses the aging schedule method to estimate current expected credit losses (“CECL”) based on days of delinquency, including information about past events and current economic conditions. The Company’s accounts receivable is separated into three categories to evaluate allowance under the CECL impairment model. The receivables in each category share similar risk characteristics. The three categories include agent non-commission based fees, agent short-term advances, and commissions receivable for real estate property settlements.

The Company increases the allowance for expected credits losses when the Company determines all or a portion of a receivable is uncollectable. The Company recognizes recoveries as a decrease to the allowance for expected credit losses.

As of the second quarter of 2022, the Company provided an allowance for potential credit losses of real estate transactions.

Receivables from real estate property settlements totaled $129,139 and $79,135 of which the Company recognized expected credit losses of $66 and $3,127, respectively as of June 30, 2023 and December 31, 2022. As of June 30, 2023 and December 31, 2022 agent non-commission based fees receivable and short-term advances totaled $7,403 and $12,141, of which the Company recognized expected credit losses of $1,478 and $887, respectively.

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PLANT, PROPERTY AND EQUIPMENT, NET

6 Months Ended

Jun. 30, 2023

PLANT, PROPERTY AND EQUIPMENT, NET

PLANT, PROPERTY AND EQUIPMENT, NET

4. PLANT, PROPERTY AND EQUIPMENT, NET

Plant, property and equipment, net consisted of the following:

	June 30, 2023	December 31, 2022
Computer hardware and software	$ 36,467	$ 34,206
Furniture, fixture, and equipment	2,253	20
Total depreciable property and equipment	38,720	34,226
Less: accumulated depreciation	(23,552)	(19,282)
Depreciable property, net	15,168	14,944
Assets under development	56	3,207
Property, plant, and equipment, net	$ 15,224	$ 18,151

For the three months ended June 30, 2023 and 2022 depreciation expense was $2,096 and $1,954, respectively. For the six months ended June 30, 2023 and 2022, depreciation expense was $4,163 and $3,570, respectively.

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GOODWILL AND INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2023

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

5. GOODWILL AND INTANGIBLE ASSETS

Goodwill was $27,552 as of June 30, 2023 and $27,212 as of December 31, 2022. As of June 30, 2023, the Company recorded cumulative translation adjustment of $340 related to Canadian goodwill. The Company has a risk of future impairment to the extent that individual reporting unit performance does not meet projections. Additionally, if current assumptions and estimates, including projected revenues and income growth rates, terminal growth rates, competitive and consumer trends, market-based discount rates, and other market factors, are not met, or if valuation factors outside of the Company’s control change unfavorably, the estimated fair value of goodwill could be adversely affected, leading to a potential impairment in the future. For the three and six months ended June 30, 2023, no events occurred that indicated it was more likely than not that goodwill was impaired.

Definite-lived intangible assets were as follows:

	June 30, 2023			December 31, 2022
	Gross	Accumulated	Net Carrying	Gross	Accumulated	Net Carrying
	Amount	Amortization	Amount	Amount	Amortization	Amount
Trade name	$ 3,472	($ 984)	$ 2,488	$ 3,459	($ 841)	$ 2,618
Existing technology	8,188	(2,889)	5,299	3,995	(2,458)	1,537
Non-competition agreements	469	(125)	344	461	(125)	336
Customer relationships	1,895	(646)	1,249	1,895	(551)	1,344
Licensing agreement	210	(210)	-	210	(181)	29
Intellectual property	2,836	(488)	2,348	2,836	-	2,836
Total intangible assets	$ 17,070	($ 5,342)	$ 11,728	$ 12,856	($ 4,156)	$ 8,700

Definite-lived intangible assets are amortized using the straight-line method over an asset’s estimated useful life. Amortization expense for definite-lived intangible assets for the three months ended June 30, 2023 and 2022 was $683 and $475, respectively. Amortization expense for definite-lived intangible assets for the six months ended June 30, 2023 and 2022 was $1,195 and $817, respectively. The Company has no indefinite-lived assets.

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STOCKHOLDERS' EQUITY

6 Months Ended

Jun. 30, 2023

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

6.STOCKHOLDERS’ EQUITY

The following table represents a share reconciliation of the Company’s common stock issued for the periods presented:

​	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Common stock:
Balance, beginning of quarter	174,532,043	158,300,605	171,656,030	155,516,284
Shares issued for stock options exercised	79,599	639,861	192,807	1,363,055
Agent growth incentive stock compensation	730,003	403,652	1,386,439	914,324
Agent equity stock compensation	2,558,438	3,942,452	4,664,807	5,492,907
Balance, end of quarter	177,900,083	163,286,570	177,900,083	163,286,570

The Company’s equity programs described below are administered under the stockholder approved 2015 Equity Incentive Plan. The purpose of the equity plan is to retain the services of valued employees, directors, officers, agents, and consultants and to incentivize such persons to make contributions to the Company and motivate excellent performance.

Agent Equity Program

The Company provides agents and brokers the opportunity to elect to receive 5% of commissions earned from each completed real estate transaction in the form of common stock (the “Agent Equity Program” or “AEP”). If agents and brokers elect to receive portions of their commissions in common stock, they are entitled to receive the equivalent number of shares of common stock, based on the fixed monetary value of the commission payable. The Company recognizes a 10% discount on these issuances as an additional cost of sales charge during the periods presented.

During the three months ended June 30, 2023 and 2022, the Company issued 2,558,438 and 3,942,452 shares of common stock, respectively, to agents and brokers with a value of $38,876 and $48,335, respectively, inclusive of discount. During the six months ended June 30, 2023 and 2022, the Company issued 4,664,807 and 5,492,907 shares of common stock, respectively, to agents and brokers with a value of $65,652 and $86,835, respectively, inclusive of discount.

Agent Growth Incentive Program

The Company administers an equity incentive program whereby agents and brokers become eligible to receive awards of the Company’s common stock through agent attraction and performance benchmarks (the “Agent Growth Incentive Program” or “AGIP”). The incentive program encourages greater performance and awards agents with common stock based on achievement of performance milestones. Awards typically vest after performance benchmarks are reached and three years of subsequent service is provided to the Company. Share-based performance awards are based on a fixed-dollar amount of shares based on the achievement of performance metrics. As such, the awards are classified as liabilities until the number of share awards becomes fixed once the performance metric is achieved.

For the three months ended June 30, 2023 and 2022 the Company’s stock compensation expense attributable to the Agent Growth Incentive Program was $8,488 and $9,230, respectively, of which the total amount of stock compensation attributable to liability classified awards was $345 and $2,545, respectively. For the six months ended June 30, 2023 and 2022 the Company’s stock compensation expense attributable to the Agent Growth Incentive Program was $18,148 and $17,028, respectively, of which the total amount of stock compensation attributable to liability classified awards was $1,338 and $4,451, respectively.

The following table illustrates changes in the Company’s stock compensation liability for the periods presented:

	Amount
Balance, December 31, 2022	$ 3,885
Stock grant liability increase year to date	1,338
Stock grants reclassified from liability to equity year to date	(1,094)
Balance, June 30, 2023	$ 4,129

Stock Option Awards

Stock options are granted to directors, officers, certain employees and consultants with an exercise price equal to the fair market value of common stock on the grant date and the stock options expire 10 years from the date of grant. These options typically have time-based restrictions with equal and periodically graded vesting over a three-year period.

During the three months ended June 30, 2023 and 2022, the Company granted 1,440,010 and 288,007 stock options, respectively, to employees with an estimated grant date fair value of $8.35 and $11.64 per share, respectively. During the six months ended June 30, 2023 and 2022, the Company granted 1,528,563 and 772,385 stock options, respectively, to employees with an estimated grant date fair value of $8.34 and $13.24 per share, respectively. The fair value was calculated using a Black Scholes-Merton option pricing model.

Stock Repurchase Plan

In December 2018, the Company’s board of directors (the “Board”) approved a stock repurchase program authorizing the Company to purchase up to $25.0 million of its common stock, which was later amended in November 2019 increasing the authorized repurchase amount to $75.0 million. In December 2020, the Board approved another amendment to the repurchase plan, increasing the total amount authorized to be purchased from $75.0 million to $400.0 million. In May 2022, the Board approved an increase to the total amount of its buyback program from $400.0 million to $500.0 million. In June 2023, the Board approved an increase to the total amount of its buyback program from $500.0 million to $1.0 billion.  Purchases under the repurchase program may be made in the open market or through a 10b5-1 plan and are expected to comply with Rule 10b-18 under the Exchange Act, as amended. The timing and number of shares repurchased depends upon market conditions. The repurchase program does not require the Company to acquire a specific number of shares. The cost of the shares that are repurchased is funded from cash and cash equivalents on hand.

10b5-1 Repurchase Plan

The Company maintains an internal stock repurchase program with program changes subject to Board consent. From time to time, the Company adopts written trading plans pursuant to Rule 10b5-1 of the Exchange Act to conduct repurchases on the open market.  

On January 10, 2022, the Company and Stephens Inc. entered into a form of Issuer Repurchase Plan (“Issuer Repurchase Plan”) which authorized Stephens to repurchase up to $10.0 million of its common stock per month. On May 3, 2022, the Board approved and on May 6, 2022, the Company entered into a form of first amendment to the Issuer Repurchase Plan to increase monthly repurchases from $10.0 million of its common stock per month up to $20.0 million. On September 27, 2022, the Board approved, and the Company entered into, a form of second amendment to the Issuer Repurchase Plan, to decrease the monthly repurchases from $20.0 million of its common stock per month to $13.3 million, in anticipation of volume decreases in connection with the contraction in the real estate market. On December 27, 2022, the Board approved, and the Company entered into, a form of third amendment to the Issuer Repurchase Plan, to decrease the monthly repurchases from $13.3 million of its common stock per month to $10.0 million, in connection with ongoing contractions in the real estate market. On May 10, 2023, the Board approved and, on May 11, 2023, the Company entered into, a form of fourth amendment to the Issuer Repurchase Plan, to increase the monthly repurchase amounts during 2023 due to actual and projected changes in the Company’s cash and cash equivalents; specifically, to permit purchases of up to: (i) $17.0 million during May 2023, (ii) $22.0 million during June 2023, (iii) $18.67 million during any calendar month commencing July 1, 2023 through and including September 30, 2023, and (iv) $12.0 million during any calendar month commencing October 1, 2023 through and including December 31, 2023. On June 26, 2023, the Board approved, and the Company entered into, a form of fifth amendment to the Issuer Repurchase Plan to increase the maximum aggregate buyback from $500.0 million to $1.0 billion in accordance with the repurchase program limit.

For accounting purposes, common stock repurchased under the stock repurchase programs is recorded based upon the settlement date of the applicable trade. Such repurchased shares are held in treasury and are presented using the cost method. These shares are considered issued but not outstanding.

The following table shows the share changes in treasury stock for the periods presented:

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Treasury stock:
Balance, beginning of quarter	21,089,622	7,883,740	18,816,791	6,751,692
Repurchases of common stock	3,222,275	3,603,951	5,495,106	4,735,999
Balance, end of quarter	24,311,897	11,487,691	24,311,897	11,487,691

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EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2023

EARNINGS PER SHARE

EARNINGS PER SHARE

7.EARNINGS PER SHARE

Basic earnings per share is computed based on net income attributable to eXp stockholders divided by the basic weighted-average shares outstanding during the period. Dilutive earnings per share is computed consistently with the basic computation while giving effect to all dilutive potential common shares and common share equivalents that were outstanding during the period. The Company uses the treasury stock method to reflect the potential dilutive effect of unvested stock awards and unexercised options.

The following table sets forth the calculation of basic and diluted earnings per share attributable to common stock during the periods presented:

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Numerator:
Net income attributable to common stock	$ 9,422	$ 9,359	$ 10,875	$ 18,241
Denominator:
Weighted average shares - basic	153,249,120	150,783,418	152,899,883	150,049,170
Dilutive effect of common stock equivalents	3,444,839	5,032,620	3,219,744	6,530,420
Weighted average shares - diluted	156,693,959	155,816,038	156,119,627	156,579,590
Earnings per share:
Earnings per share attributable to common stock- basic	$ 0.06	$ 0.06	$ 0.07	$ 0.12
Earnings per share attributable to common stock- diluted	$ 0.06	$ 0.06	$ 0.07	$ 0.12

For three months ended June 30, 2023 and 2022 total outstanding shares of common stock excluded 656,776 and 1,485,139 shares, respectively, from the computation of diluted earnings per share because their effect would have been anti-dilutive.

For six months ended June 30, 2023 and 2022 total outstanding shares of common stock excluded 588,940 and 692,237 shares, respectively, from the computation of diluted earnings per share because their effect would have been anti-dilutive.

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INCOME TAXES

6 Months Ended

Jun. 30, 2023

INCOME TAXES

INCOME TAXES

8.INCOME TAXES

Our quarterly tax provision is computed by applying the estimated annual effective tax rate to the year-to-date pre-tax income or loss plus discrete tax items arising in the period. Our provision for income tax expense (benefit) amounted to $0.24 million and ($3.49) million for the six months ended June 30, 2023 and 2022, respectively, which represent effective tax rates of positive 2.20% and negative 23.81%, respectively. The provision for income tax expense was primarily attributable to increase in income from operations, lower deductible stock-based compensation windfalls and return to provision true-ups in various jurisdictions. The effective tax rate differs from our statutory rates in both periods primarily due to the impact of the stock-based compensation and R&D tax credit.

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FAIR VALUE MEASUREMENT

6 Months Ended

Jun. 30, 2023

FAIR VALUE MEASUREMENT

FAIR VALUE MEASUREMENT

9.FAIR VALUE MEASUREMENT

The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. The fair value hierarchy prioritizes the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories:

● Level 1 – Inputs are quoted market prices in active markets for identical assets or liabilities (these are observable market inputs).

● Level 2 – Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability (includes quoted market prices for similar assets or identical or similar assets in markets in which there are few transactions, prices that are not current or prices that vary substantially).

● Level 3 – Inputs are unobservable inputs that reflect the entity's own assumptions in pricing the asset or liability (used when little or no market data is available).

The Company holds funds in a money market account, which are considered Level 1 assets. The Company values its money market funds at fair value on a recurring basis.

As of June 30, 2023 and December 31, 2022, the fair value of the Company’s money market funds was $45,080 and $44,062, respectively.

There have been no transfers between Level 1, Level 2 and Level 3 in the period presented. The Company did not have any Level 2 or Level 3 financial assets or liabilities in the period presented.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2023

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

10.COMMITMENTS AND CONTINGENCIES

From time to time, the Company is subject to potential liability under laws and government regulations and various claims and legal actions that may be asserted against us that could have a material adverse effect on the business, reputation, results of operations or financial condition. Such litigation may include, but is not limited to, actions or claims relating to sensitive data, including proprietary business information and intellectual property and that of clients and personally identifiable information of employees and contractors, cyber-attacks, data breaches and non-compliance with contractual or other legal obligations.

There are no matters pending or, to the Company’s knowledge, threatened that are expected to have a material adverse impact on the business, reputation, results of operations, or financial condition.

There are no proceedings in which any of the Company’s directors, officers or affiliates, or any registered or beneficial stockholder is an adverse party or has a material interest adverse to the Company’s interest.

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SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2023

SEGMENT INFORMATION

SEGMENT INFORMATION

11.SEGMENT INFORMATION

The reportable segments presented below represent the Company’s segments for which separate financial information is available and which is utilized on a regular basis by its chief operating decision maker to assess performance and to allocate resources. In identifying its reportable segments, the Company also considers the nature of services provided by its segments.

Management evaluates the operating results of each of its reportable segments based upon revenue and Adjusted EBITDA. Adjusted Segment EBITDA is defined by us as operating profit plus depreciation and amortization and stock-based compensation expenses. The Company’s presentation of Adjusted Segment EBITDA may not be comparable to similar measures used by other companies. The Company’s four reportable segments are as follows:

● North American Realty: includes real estate brokerage operations in the United States and Canada, as well as lead-generation and other real estate support services provided in North America.

● International Realty: includes real estate brokerage operations in all other international locations.

● Virbela: includes Virbela enterprise metaverse technology and the support services offered by eXp World Technologies.

● Other Affiliated Services: includes our SUCCESS^® Magazine and other smaller ventures.

The Company also reports corporate expenses, as further detailed below, as “Corporate and other” which include expenses incurred in connection with business development support provided to the agents as well as resources, including administrative, brokerage operations and legal functions.

All segments follow the same basis of presentation and accounting policies as those described throughout the Notes to the Audited Consolidated Financial Statements included herein. The Company accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current market prices. The following table provides information about the Company’s reportable segments and a reconciliation of the total segment Revenues to consolidated Revenues and Adjusted Segment EBITDA to the consolidated operating profit and Goodwill (in thousands). Financial information for the comparable prior periods presented have been revised to conform with the current year presentation.

​	Revenues
	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
North American Realty	$ 1,219,345	$ 1,404,028	$ 2,056,459	$ 2,405,908
International Realty	11,991	8,908	22,748	16,002
Virbela	1,811	2,040	3,974	3,853
Other Affiliated Services	1,072	1,043	2,749	1,881
Revenues reconciliation:
Segment eliminations	(1,292)	(959)	(2,387)	(1,853)
Consolidated revenues	$ 1,232,927	$ 1,415,060	$ 2,083,543	$ 2,425,791

	Adjusted EBITDA
	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
North American Realty	$ 34,122	$ 39,899	$ 55,325	$ 68,670
International Realty	(3,782)	(3,014)	(7,458)	(4,970)
Virbela	(1,196)	(2,715)	(2,492)	(5,487)
Other Affiliated Services	(1,168)	(747)	(1,849)	(1,576)
Corporate expenses and other	(3,247)	(6,509)	(5,470)	(12,010)
Consolidated Adjusted EBITDA	$ 24,729	$ 26,914	$ 38,056	$ 44,627
Operating Profit Reconciliation:
Depreciation and amortization expense	2,779	2,429	5,358	4,387
Stock compensation expense	8,488	9,230	18,148	17,028
Stock option expense	2,365	3,606	5,126	7,121
Consolidated operating profit	$ 11,097	$ 11,649	$ 9,424	$ 16,091

	Goodwill
	June 30, 2023	December 31, 2022
North American Realty	$ 16,917	$ 16,577
International Realty	-	-
Virbela	8,248	8,248
Other Affiliated Services	2,387	2,387
Segment total	27,552	27,212
Corporate and other	-	-
Consolidated total	$ 27,552	$ 27,212

The Company does not use segment assets to allocate resources or to assess performance of the segments and therefore, total segment assets have not been disclosed.

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2023

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

12.SUBSEQUENT EVENTS

Quarterly Cash Dividend

On July 28, 2023, the Company’s Board of Directors declared a dividend of $0.05 per share which is expected to be payable on September 4, 2023, to stockholders of record as of the close of business on August 18, 2023. The ex-dividend date is expected to be on or around August 16, 2023. The dividend will be paid in cash.

Loss of “Controlled Company” Status

As reported on a Schedule 13D filed with the Securities and Exchange Commission on December 8, 2017, on or about June 6,  2017, Glenn D. Sanford and Penny Sanford entered into an oral agreement (the “Stockholder Agreement”), pursuant to which Mr. Sanford and Ms. Sanford agreed to vote as a group with respect to the election of our directors and any other matter on which shares of eXp World Holdings, Inc.’s (the “Company”) common stock are entitled to vote. A purpose of the Stockholder Agreement was to enable the Company to qualify as a “controlled company” within the meaning of the NASDAQ listing rules.

On May 14, 2018, the Company’s application to list its common stock on the NASDAQ Global Market was approved and, because Mr. Sanford and Ms. Sanford collectively held more than 50% of the voting power for the election of our directors, the Company qualified as a “controlled company” within the meaning of the NASDAQ rules.

On or about December 17, 2020, Mr. Sanford, Ms. Sanford, Jason Gesing and Eugene Frederick entered into an oral agreement to amend the Stockholder Agreement, pursuant to which Mr. Sanford, Ms. Sanford, Mr. Gesing and Mr. Frederick (collectively, the “Voting Group”) agreed to vote their shares as a group with respect to the election of our directors and any other matter on which the Company’s shares of common stock are entitled to vote. Based on the Voting Group’s most recently filed Schedule 13D/A, as of September 30, 2022, the Voting Group beneficially owned 78,997,394 shares of Common Stock, representing 51.73% of our outstanding shares of Common Stock.

On July 31, 2023, Ms. Sanford and Messrs. Sanford and Gesing filed a Schedule 13D/A disclosing that Mr. Frederick was no longer a member of the Voting Group. Because no person or group holds more than 50% of the voting power for the election of our directors, the Company no longer qualifies as a “controlled company” under NASDAQ rules. Accordingly, following permitted phase-in periods, the Company will be required to, among other things, have a majority of independent directors on its Board of Directors, a compensation committee consisting solely of independent directors and a director nominations process whereby directors are selected by a nominations committee consisting solely of independent directors or by a vote of the Board of Directors in which only independent directors participate.

Adoption of 2023 Equity Incentive Plan

Due to limited shares available for issuance and the upcoming expiration of the 2015 Equity Incentive Plan, the Compensation Committee of the Board approved, and recommended that the Board approve and adopt, a new equity incentive plan to serve as the successor to our 2015 Equity Incentive Plan. The Board adopted the 2023 Equity Incentive Plan on July 28, 2023, and, stockholders holding a majority of the voting power of the Company adopted the Plan on July 29, 2023, by written consent in lieu of a meeting. The 2023 Equity Incentive Plan and a summary of its principal terms and conditions will be set forth in an information statement to be filed with the Securities and Exchange Commission and provided to all of our stockholders.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of eXp and its consolidated subsidiaries, including those entities in which we have a variable interest of which we are the primary beneficiary. If the Company has a variable interest in an entity but it is not the primary beneficiary of the entity or exercises control over the operations and has less than 50% ownership, it will use the equity method or the cost method of accounting for investments. Entities in which the Company has less than a 20% investment and where the Company does not exercise significant influence are accounted for under the cost method. Intercompany transactions and balances are eliminated upon consolidation.

Variable interest entities and noncontrolling interests

Variable interest entities and noncontrolling interests

A company is deemed to be the primary beneficiary of a variable interest entity (“VIE”) and must consolidate the entity if the company has both: (i) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, and (ii) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

Joint ventures

Joint ventures

A joint venture is a contractual arrangement whereby the Company and other parties undertake an economic activity through a jointly controlled entity. Joint control exists when strategic, financial, and operating policy decisions relating to the activities require the unanimous consent of the parties sharing control. Joint ventures are accounted for using the equity method and are recognized initially at cost.

Use of estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to allowance for credit losses, legal contingencies, income taxes, revenue recognition, stock-based compensation, goodwill, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Reclassifications

Reclassifications

When necessary, the Company will reclassify certain amounts in prior-period financial statements to conform to the current period’s presentation. No reclassifications occurred during the current period.

Restricted cash

Restricted cash

Restricted cash consists of cash held in escrow by the Company on behalf of real estate buyers. The Company recognizes a corresponding customer deposit liability until the funds are released. Once the cash transfers from escrow, the Company reduces the respective customers’ deposit liability.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown on the condensed consolidated statements of cash flows.

	Cash and cash equivalents	Restricted cash	Total
Balance, December 31, 2021	$ 108,237	$ 67,673	$ 175,910
Balance, June 30, 2022	$ 134,898	$ 105,883	$ 240,781
Balance, December 31, 2022	$ 121,594	$ 37,789	$ 159,383
Balance, June 30, 2023	$ 124,714	$ 88,560	$ 213,274

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of Cash

	Cash and cash equivalents	Restricted cash	Total
Balance, December 31, 2021	$ 108,237	$ 67,673	$ 175,910
Balance, June 30, 2022	$ 134,898	$ 105,883	$ 240,781
Balance, December 31, 2022	$ 121,594	$ 37,789	$ 159,383
Balance, June 30, 2023	$ 124,714	$ 88,560	$ 213,274

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PLANT, PROPERTY AND EQUIPMENT, NET (Tables)

6 Months Ended

Jun. 30, 2023

PLANT, PROPERTY AND EQUIPMENT, NET

Schedule of plant, property and equipment

	June 30, 2023	December 31, 2022
Computer hardware and software	$ 36,467	$ 34,206
Furniture, fixture, and equipment	2,253	20
Total depreciable property and equipment	38,720	34,226
Less: accumulated depreciation	(23,552)	(19,282)
Depreciable property, net	15,168	14,944
Assets under development	56	3,207
Property, plant, and equipment, net	$ 15,224	$ 18,151

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GOODWILL AND INTANGIBLE ASSETS (Tables)

6 Months Ended

Jun. 30, 2023

GOODWILL AND INTANGIBLE ASSETS

Schedule of Definite-Lived Assets

	June 30, 2023			December 31, 2022
	Gross	Accumulated	Net Carrying	Gross	Accumulated	Net Carrying
	Amount	Amortization	Amount	Amount	Amortization	Amount
Trade name	$ 3,472	($ 984)	$ 2,488	$ 3,459	($ 841)	$ 2,618
Existing technology	8,188	(2,889)	5,299	3,995	(2,458)	1,537
Non-competition agreements	469	(125)	344	461	(125)	336
Customer relationships	1,895	(646)	1,249	1,895	(551)	1,344
Licensing agreement	210	(210)	-	210	(181)	29
Intellectual property	2,836	(488)	2,348	2,836	-	2,836
Total intangible assets	$ 17,070	($ 5,342)	$ 11,728	$ 12,856	($ 4,156)	$ 8,700

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STOCKHOLDERS' EQUITY (Tables)

6 Months Ended

Jun. 30, 2023

STOCKHOLDERS' EQUITY

Schedule of common stock issued roll forward

​	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Common stock:
Balance, beginning of quarter	174,532,043	158,300,605	171,656,030	155,516,284
Shares issued for stock options exercised	79,599	639,861	192,807	1,363,055
Agent growth incentive stock compensation	730,003	403,652	1,386,439	914,324
Agent equity stock compensation	2,558,438	3,942,452	4,664,807	5,492,907
Balance, end of quarter	177,900,083	163,286,570	177,900,083	163,286,570

Changes in the Company's stock compensation liability

	Amount
Balance, December 31, 2022	$ 3,885
Stock grant liability increase year to date	1,338
Stock grants reclassified from liability to equity year to date	(1,094)
Balance, June 30, 2023	$ 4,129

Schedule of shares repurchased

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Treasury stock:
Balance, beginning of quarter	21,089,622	7,883,740	18,816,791	6,751,692
Repurchases of common stock	3,222,275	3,603,951	5,495,106	4,735,999
Balance, end of quarter	24,311,897	11,487,691	24,311,897	11,487,691

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EARNINGS PER SHARE (Tables)

6 Months Ended

Jun. 30, 2023

EARNINGS PER SHARE

Schedule of calculation of basic and diluted earnings per share

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Numerator:
Net income attributable to common stock	$ 9,422	$ 9,359	$ 10,875	$ 18,241
Denominator:
Weighted average shares - basic	153,249,120	150,783,418	152,899,883	150,049,170
Dilutive effect of common stock equivalents	3,444,839	5,032,620	3,219,744	6,530,420
Weighted average shares - diluted	156,693,959	155,816,038	156,119,627	156,579,590
Earnings per share:
Earnings per share attributable to common stock- basic	$ 0.06	$ 0.06	$ 0.07	$ 0.12
Earnings per share attributable to common stock- diluted	$ 0.06	$ 0.06	$ 0.07	$ 0.12

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SEGMENT INFORMATION (Tables)

6 Months Ended

Jun. 30, 2023

SEGMENT INFORMATION

Schedule of segment's financial information

The following table provides information about the Company’s reportable segments and a reconciliation of the total segment Revenues to consolidated Revenues and Adjusted Segment EBITDA to the consolidated operating profit and Goodwill (in thousands). Financial information for the comparable prior periods presented have been revised to conform with the current year presentation

	Adjusted EBITDA
	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
North American Realty	$ 34,122	$ 39,899	$ 55,325	$ 68,670
International Realty	(3,782)	(3,014)	(7,458)	(4,970)
Virbela	(1,196)	(2,715)	(2,492)	(5,487)
Other Affiliated Services	(1,168)	(747)	(1,849)	(1,576)
Corporate expenses and other	(3,247)	(6,509)	(5,470)	(12,010)
Consolidated Adjusted EBITDA	$ 24,729	$ 26,914	$ 38,056	$ 44,627
Operating Profit Reconciliation:
Depreciation and amortization expense	2,779	2,429	5,358	4,387
Stock compensation expense	8,488	9,230	18,148	17,028
Stock option expense	2,365	3,606	5,126	7,121
Consolidated operating profit	$ 11,097	$ 11,649	$ 9,424	$ 16,091

	Goodwill
	June 30, 2023	December 31, 2022
North American Realty	$ 16,917	$ 16,577
International Realty	-	-
Virbela	8,248	8,248
Other Affiliated Services	2,387	2,387
Segment total	27,552	27,212
Corporate and other	-	-
Consolidated total	$ 27,552	$ 27,212

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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details)	6 Months Ended
	Jun. 30, 2023 segment
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Number of reportable segments	4

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Cash) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022	Dec. 31, 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents	$ 124,714	$ 121,594	$ 134,898	$ 108,237
Restricted cash	88,560	37,789	105,883	67,673
Total cash, cash equivalents, and restricted cash	$ 213,274	$ 159,383	$ 240,781	$ 175,910

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EXPECTED CREDIT LOSSES (Narrative) (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Accounts receivable, allowance for credit losses and bad debt	$ 1,544,000	$ 4,014,000
Agent Noncommission Based Fees
Accounts Receivable, before Allowance for Credit Loss	7,403,000	12,141,000
Accounts receivable, allowance for credit losses and bad debt	1,478,000	887,000
Commissions Receivable for Real Estate Property Settlements
Accounts Receivable, before Allowance for Credit Loss	129,139,000	79,135,000
Accounts receivable, allowance for credit losses and bad debt	$ 66,000	$ 3,127

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PLANT, PROPERTY AND EQUIPMENT, NET (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
PLANT, PROPERTY AND EQUIPMENT, NET
Depreciation expense	$ 2,096	$ 1,954	$ 4,163	$ 3,570

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PLANT, PROPERTY AND EQUIPMENT, NET (Schedule of Fixed assets) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Total depreciable property and equipment	$ 38,720	$ 34,226
Less: accumulated depreciation	(23,552)	(19,282)
Depreciable property, net	15,168	14,944
Assets under development	56	3,207
Property, plant, and equipment, net	15,224	18,151
Computer hardware and software
Total depreciable property and equipment	36,467	34,206
Furniture, fixtures and equipment
Total depreciable property and equipment	$ 2,253	$ 20

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GOODWILL AND INTANGIBLE ASSETS (Narrative) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Goodwill	$ 27,552,000		$ 27,552,000		$ 27,212,000
Goodwill, impairment loss	0		0
Amortization expense - intangible assets	683,000	$ 475,000	1,195,000	$ 817,000
Indefinite-lived intangible assets (excluding goodwill)	0		$ 0
Adjustment | CANADA
Cumulative translation adjustment	$ 340,000,000

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GOODWILL AND INTANGIBLE ASSETS (Schedule of Definite-Lived Assets) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Gross Amount	$ 17,070	$ 12,856
Accumulated Amortization	(5,342)	(4,156)
Net Carrying Amount	11,728	8,700
Trade name
Finite-Lived Intangible Assets [Line Items]
Gross Amount	3,472	3,459
Accumulated Amortization	(984)	(841)
Net Carrying Amount	2,488	2,618
Existing technology
Finite-Lived Intangible Assets [Line Items]
Gross Amount	8,188	3,995
Accumulated Amortization	(2,889)	(2,458)
Net Carrying Amount	5,299	1,537
Non-competition agreements
Finite-Lived Intangible Assets [Line Items]
Gross Amount	469	461
Accumulated Amortization	(125)	(125)
Net Carrying Amount	344	336
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Amount	1,895	1,895
Accumulated Amortization	(646)	(551)
Net Carrying Amount	1,249	1,344
Licensing agreement
Finite-Lived Intangible Assets [Line Items]
Gross Amount	210	210
Accumulated Amortization	(210)	(181)
Net Carrying Amount	0	29
Intellectual property
Finite-Lived Intangible Assets [Line Items]
Gross Amount	2,836	2,836
Accumulated Amortization	(488)	0
Net Carrying Amount	$ 2,348	$ 2,836

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STOCKHOLDERS' EQUITY (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Agent Equity Award Program
Stock issued for services, shares	2,558,438	3,942,452	4,664,807	5,492,907
Stock issued for services, value	$ 38,876	$ 48,335	$ 65,652	$ 86,835
Percentage of commission potentially redeemed in common stock			5.00%
Percentage of discount of market price, date of issuance			10.00%
Agent Growth Incentive Program
Stock issued for services, shares	730,003	403,652	1,386,439	914,324
Stock based compensation	$ 8,488	$ 9,230	$ 18,148	$ 17,028
Amount of stock compensation attributable to liability classified awards	$ 345	$ 2,545	$ 1,338	$ 4,451
Stock Options
Vesting period			3 years
Stock options granted, shares	1,440,010	288,007	1,528,563	772,385
Share-based award expiration period			10 years
Grant date fair value	$ 8.35	$ 11.64	$ 8.34	$ 13.24

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STOCKHOLDERS' EQUITY (Schedule of common stock issued) (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Common Stock, Shares, Issued, Beginning Balance	174,532,043	158,300,605	171,656,030	155,516,284
Shares issued for stock options exercised, shares	79,599	639,861	192,807	1,363,055
Common Stock, Shares, Issued, Ending Balance	177,900,083	163,286,570	177,900,083	163,286,570
Agent Equity Award Program
Agent equity stock compensation, shares	2,558,438	3,942,452	4,664,807	5,492,907
Agent Growth Incentive Program
Agent equity stock compensation, shares	730,003	403,652	1,386,439	914,324

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STOCKHOLDERS' EQUITY (Changes in the Company's stock compensation liability) (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($)
STOCKHOLDERS' EQUITY
Balance, at beginning of period	$ 3,885
Stock grant liability increase year to date	1,338
Stock grants reclassified from liability to equity year to date	(1,094)
Balance, at end of period	$ 4,129

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STOCKHOLDERS' EQUITY (Schedule of shares repurchased) (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Treasury stock:
Balance, beginning of quarter	21,089,622	7,883,740	18,816,791	6,751,692
Repurchase of common stock, shares	3,222,275	3,603,951	5,495,106	4,735,999
Balance, end of quarter	24,311,897	11,487,691	24,311,897	11,487,691

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STOCKHOLDERS' EQUITY (Stock Repurchase Plan) (Narrative) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023	Jun. 30, 2023	Jun. 26, 2023	May 31, 2023	Dec. 27, 2022	Sep. 27, 2022	May 31, 2022	May 06, 2022	Jan. 10, 2022	Dec. 31, 2020	Nov. 30, 2019	Dec. 31, 2018
STOCKHOLDERS' EQUITY
Stock repurchase program authorized amount			$ 1,000,000	$ 1,000,000	$ 500,000			$ 500,000			$ 400,000	$ 75,000	$ 25,000
Stock repurchase program authorized amount per month						$ 10,000	$ 13,300		$ 20,000	$ 10,000
Maximum | Forecast [Member]
STOCKHOLDERS' EQUITY
Stock repurchase program authorized amount per month	$ 12,000	$ 18,670
Maximum | Scenario, Plan [Member]
STOCKHOLDERS' EQUITY
Stock repurchase program authorized amount per month			$ 22,000		$ 17,000

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EARNINGS PER SHARE (Schedule of calculation of basic and diluted earnings (loss) per share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
EARNINGS PER SHARE
Net income attributable to common stock	$ 9,422	$ 9,359	$ 10,875	$ 18,241
Weighted average shares - basic	153,249,120	150,783,418	152,899,883	150,049,170
Dilutive effect of common stock equivalents	3,444,839	5,032,620	3,219,744	6,530,420
Weighted average shares - diluted	156,693,959	155,816,038	156,119,627	156,579,590
Earnings per share attributable to common stock- basic	$ 0.06	$ 0.06	$ 0.07	$ 0.12
Earnings per share attributable to common stock- diluted	$ 0.06	$ 0.06	$ 0.07	$ 0.12
Shares excluded, anti-dilutive	656,776	1,485,139	588,940	692,237

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INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
INCOME TAXES
Income tax (benefit) expense	$ 2,831	$ 1,661	$ 243	$ (3,488)
Effective income tax rate			2.20%	(23.81%)

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FAIR VALUE MEASUREMENTS (Narrative) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Money Market Funds
Money market funds	$ 45,080	$ 44,062

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SEGMENT INFORMATION (Narrative) (Details)	6 Months Ended
	Jun. 30, 2023 segment
SEGMENT INFORMATION
Number of reportable segments	4

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SEGMENT INFORMATION (Financial Information) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Segment Reporting Information [Line Items]
Revenues	$ 1,232,927	$ 1,415,060	$ 2,083,543	$ 2,425,791
Consolidated Adjusted EBITDA	24,729	26,914	38,056	44,627
Depreciation and amortization expense	2,779	2,429	5,358	4,387
Stock compensation expense	8,488	9,230	18,148	17,028
Stock option expense	2,365	3,606	5,126	7,121
Operating profit	11,097	11,649	9,424	16,091
Goodwill	27,552		27,552		$ 27,212
Operating segments
Segment Reporting Information [Line Items]
Goodwill	27,552		27,552		27,212
Operating segments | North American Realty
Segment Reporting Information [Line Items]
Revenues	1,219,345	1,404,028	2,056,459	2,405,908
Consolidated Adjusted EBITDA	34,122	39,899	55,325	68,670
Goodwill	16,917		16,917		16,577
Operating segments | International Realty
Segment Reporting Information [Line Items]
Revenues	11,991	8,908	22,748	16,002
Consolidated Adjusted EBITDA	(3,782)	(3,014)	(7,458)	(4,970)
Operating segments | Virbela
Segment Reporting Information [Line Items]
Revenues	1,811	2,040	3,974	3,853
Consolidated Adjusted EBITDA	(1,196)	(2,715)	(2,492)	(5,487)
Goodwill	8,248		8,248		8,248
Operating segments | Other Affiliated Services
Segment Reporting Information [Line Items]
Revenues	1,072	1,043	2,749	1,881
Consolidated Adjusted EBITDA	(1,168)	(747)	(1,849)	(1,576)
Goodwill	2,387		2,387		$ 2,387
Operating segments | Corporate expenses and other
Segment Reporting Information [Line Items]
Consolidated Adjusted EBITDA	(3,247)	(6,509)	(5,470)	(12,010)
Segment eliminations
Segment Reporting Information [Line Items]
Revenues	$ (1,292)	$ (959)	$ (2,387)	$ (1,853)

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SUBSEQUENT EVENTS (Narrative) (Details) - $ / shares			1 Months Ended
	Jul. 28, 2023	May 14, 2018	Sep. 30, 2022	Jun. 30, 2023	Dec. 31, 2022
Common stock outstanding				153,588,186	152,839,239
Related Party | Mr. Sanford and Ms. Sanford
Percentage of outstanding shares of common stock held by voting group		50.00%
Related Party | Voting Group
Minimum voting power to qualify as a controlled company held by group			51.73%
Common stock outstanding			78,997,394
Subsequent Event
Dividends Payable, Amount Per Share	$ 0.05
Dividends Payable, Date to be Paid	Sep. 04, 2023
Dividends Payable, Date Declared	Jul. 28, 2023
Dividends Payable, Date of Record	Aug. 18, 2023

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ 9,422	$ 9,359	$ 10,875	$ 18,241

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Insider Trading Arrangements

3 Months Ended

Jun. 30, 2023

shares

Trading Arrangements, by Individual

Material Terms of Trading Arrangement

Quarterly Directors and Officers 10b5-1 Disclosure

During the three months ended June 30, 2023, Jason Gesing, Director and Chief Industry Relations Officer, adopted a Rule 10b5–1 trading arrangement (as defined in Item 408(a)(1)(i) of Regulation S-K). This action took place on May 10, 2023. The duration of the trading arrangement is through July 15, 2024. The aggregate number of shares of the Company’s common stock that may be purchased pursuant to the trading arrangement is 304,960. The aggregate number of shares of the Company’s common stock that may be sold pursuant to the trading arrangement is 304,960.

Jason Gesing [Member]

Trading Arrangements, by Individual

Name

Jason Gesing

Title

Director and Chief Industry Relations Officer

Rule 10b5-1 Arrangement Adopted

true

Adoption Date

May 10, 2023

Aggregate Available

304,960

Expiration Date

July 15, 2024