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Glenn Sanford: Hi, thank you, Denise. And thank you everyone for attending here as well. First and foremost, as many of you know, eXp World Holdings is primarily a residential real estate brokerage which I founded a little over 13 years ago, close to 13.5 years ago. On behalf of our agents, who also are our shareholders, and in a little bit, I'll be sharing a bit on how we're driving -- continuing to drive this mentality through our organization through the use of NPS, a new term that we referred to as earned growth rate. I think it's important to understand that in the context of being a long-term shareholder, even though obviously today we're going to be talking a little bit about our past results, but our continued focus on the agent value proposition, I think, is what's most important when you think about future results.

Obviously, despite the challenging market in 2022, the eXp value prop continued to track agents. And a result, we grew revenues while maintaining a strong balance sheet with zero debt. We also paid dividends to our shareholders as part of our differentiated value proposition and our equity offering to agents, which is unique in the marketplace. This year, in as of this 10-K, we're actually increasing our financial transparency into the organization. We're doing that through what we're referring -- what's referred to as segmenting, and one of the reasons why I did that is because of the challenging market, we wanted to show to our agents, staff shareholders, and others that at scale eXp Realty is, as we've said for a long time, we believed it would be profitable in good times and bad times.

And what you'll be able to see is when you actually look through our segmented filings, you'll actually see that eXp Realty North America, even in a tough market, continues to be profitable, and you're also able to see how we're actually investing into other markets, international others, which you'll be able to certainly see as well. So, when we started eXp Realty, we introduced to the marketplace an agent-centric cloud-based model which had significantly lower costs as well as high agent engagement and support. What's interesting is the industry really has been fairly slow to respond to the new normal; even with the pandemic, the industry hasn't shifted that much. And, as I like to say, at least relative to many of the legacy franchise players, it really feels like at least from a competitive standpoint that there is a lot of brokerages that are basically dinosaurs teaching other dinosaurs how to be better dinosaurs.

Because of that backdrop, we've been able to scale to really tens of thousands of agents and hundreds of millions of dollars, actually billions of dollars in revenue, in North America within really a fairly short period of time without much in the way of competition. However, as we've continued to scale, we're actually now starting to see some new entrants in the marketplace, although the vast majority of the industry remains wedded to the legacy high-cost infrastructure models. To drive the next phase of eXp's growth, we're actually really and one of the reasons why I came back as CEO of eXp Realty was to really continue our focus on the agent-centric nature of the real estate brokerage, leveraging our scale with the ultimate goal being the number one worldwide real estate brokerage and brand, and we've done a great job so far.

So, in 2023 and beyond, we will continue to make investments into our -- as you can see, our segments -- our core segments. Primarily, eXp Realty North America International is a big growth area for us, a lot of investment going into that. However, we also have a strong balance sheet with over $100 million in cash and zero debt, which enables us to continue to be agile and innovative in the various different business segments that we compete in. We continue to make investments in the market downturn. In fact, we've made a shift, which Jeff will talk to in a little bit, in terms of how we're thinking about it in terms of the financial management side because we believe that now is the time to actually grow in a down market, now that we've actually broken out these segments, and you can see that we actually have a scalable profitable model at scale in North America.

Our goal is to actually make that a reality in many, many international markets around the world. One of the things that we've talked -- even at the beginning of the call, talked a little bit about Net Promoter Score or our agent Net Promoter Score and that's really our North Star and is really a great predictor of our long-term success. We have an all-time high globally of 73, and we continue to sort of double down on how we're using NPS as a tool to actually drive a founder's mentality into an organization in a way that creates key metrics for our team to iterate around. We're investing in products to drive greater agent productivity, which ultimately means that they are getting high-quality opportunities. is a newly stood up organization underneath Leo Pareja which aggregates national opportunities for agents.

We've stood up a luxury division at EXPCON which has been well received and we continue to expand our eXp Realty division, as well. We also have been growing our national search portals. Some of the things you may, remember me talked about in years past, is a concept called the alt portal, which in this case we've been scaling Zoocasa. We announced a few weeks ago, our partnership with Realty.com. And then we've also continued to build out eXp Realty's website and web presence and we've got some cool innovations that we're going to be talking about not today, but very shortly, which is going to give agents a significant advantage in relation to the company-owned website for leads and for agents. So we're excited about a lot of the things that are coming down the pipe.

We also continue to invest in personal and professional development services. We've got a number of things that we've done there including SUCCESS Health, SUCCESS Coaching, and then we've got an announcement that we're going to be talking about on March 6th, Monday next week, which we're really excited about in terms of expanding out the success ecosystem. And then, we continue to really focus on, and this really falls under Patrick O'Neill, who recently joined us, really improving the overall experience across the entire agent lifecycle. We've been improving the onboarding, training mentorship processes. We've enhanced payment processing. And, in fact, in some markets, we've literally got to the point where we can pay agents within 24 hours of us recognizing that the transaction is closed, even before, in some cases, we've actually collected the money because closings are a highly collectible transaction from a closing perspective.

So, we're really excited about some of the innovations we have around agent pay. We've also revamped our support and collaboration services for existing agents. We've launched an express care desk and next generation squads in local markets. So, we're actually driving more and more into the local markets. We've also focused on new global capabilities with teams focused on around-the-world 24/7 support, and so those are other things that we're focused on. VirBELA, one thing we continue to do is invest there because that's the single enabling technology that's allowed us to grow, and in fact you're here in one of the many VirBELA campuses that we maintain for various purposes for the shareholder meeting today. And we continue to invest in another Metaverse platform, Frame VR, which is a web-based Metaverse which is super accessible from desktop, mobile, Oculus headsets, et cetera.

Photo by Guillaume Bolduc on Unsplash

So, excited about that. I've talked a little bit about this earlier, but one of the things that we have been using since 2016 is we've focused on Net Promoter Score. It came about from a number of books that I personally had read that I've shared with the management team back then, and it really matched up with what I call the founder's mentality. And the founder's mentality is that, it's about creating a differentiated value prop for your customer and then delivering on that every single day. And that ultimately turns into something called the Net Promoter Score or Net Promoter System that was developed by Fred Reichheld at Bain & Company a number of years ago, which was written about in the Ultimate Question 2.0. In his most recent book, which I've also shared with the entire management team and the Board, Winning on Purpose, he introduced a concept called earned revenue growth or earned growth rate, and that's a really important concept because what it does is it breaks down for long-term shareholders why the most important metric that you want to be measuring is what is -- what do customers feel about the differentiated product or service offering that a company provides.

And by understanding that, then you can make some predictions on the health and growth of a company. And so, we've really focused on it, and what I believe that it really does, from my perspective, is it helps us teach the organization at scale to actually think like a small company founder who's focused really closely on the customer and getting close to, in our case, the agent, and understanding that they are the ones that ultimately we're building it for. But if we do it right long term, the shareholders win as well, and of course we've shared equity with our agents and brokers. So, this concept runs way deeper than just thinking about it from an external perspective. This actually becomes very much of a virtuous circle of how we operate the business and ultimately retain revenue at a much lower, if no marketing cost type of business.

So, the bottom line is highly satisfied agents stay with us longer, grow their businesses by attracting new agents for the company and that allows us to invest money that we would have normally spent on marketing, into actually building things that our agents actually want and need, and that's the virtuous circle that ultimately yields for long-term growth. And with that, I'm going to turn it over to Jeff Whiteside.

Jeff Whiteside: All right. Well, thank you very much Glenn. And thank you, Denise. Good afternoon all, and good evening, I know some people from Europe. So, thank you for showing up to the presentation. I'll start the financials by highlighting our full year 2022 results, beginning with eXp World Holdings. Consolidated revenues increased by 22% year-over-year to $4.6 billion, while gross margins, percentages, and dollars increased in versus 2021. We maintain adjusted EBITDA profitability throughout the year despite a challenging second half of '22 that we'll get into. And we ended the year with a stronger cash position of no debt on our balance sheet. As Glenn mentioned earlier, beginning this quarter, we will be reporting four operating segments, eXp North American Realty, eXp International Realty, VirBELA, and other affiliates services.

On this first page, I'd just like to highlight a couple of our segments being North America and International Realty. 2022, the North American business grew by 22% revenue and solidly EBITDA profitable throughout the entire year, even as we expanded our business and acquired to Zoocasa. eXp International Realty remains an investment mode as we scale the business. Our full year revenue grew at 102% as we increased our agent count, productivity in previously launched markets. During 2022, we entered six new markets Dominican Republic, Greece, New Zealand, Chile, Poland, and Dubai. 2023 international Realty will be focused on growing --driving growth and production in our existing markets. And as Glenn mentioned in his opening statements, our operating plan in 2023 and beyond is to continue to invest in segments that provide value to our agents in the long term.

In terms of capital allocation, we'll continue to fund investments in each segment that we believe will generate an attractive long-term financial return. So, I'm going to get into some of those numbers on the next slide, if we could move there. I'll provide some more information on our segments. So, if you look at Slide 13, you're going to see a full year 2022 segment revenue and adjusted EBITDA numbers for all four of our segments. In 2022, as comparable to previous years, our North American Realty segment is prime -- is our primary driver of revenue, at $4.544 billion and adjusted EBITDA of $103.3 million. So, we've talked about this. We have -- this is the first time we're actually breaking it out, but I've talked about it several times throughout the year is that we're very, very fortunate in our business, to have the North American business really driving growth and profitability that allows us to invest not only in North America but international and in our technologies.

That's what you're going to see in this presentation. International Realty, VirBELA, and other affiliate service segments contribute modest amounts of revenue today. But we believe the investments we're making in these segments have potential to help drive our growth into the next phase of growth. So, if we look at our international Realty segment, as I mentioned before, we've entered 22 international markets. Each market is different and it takes time to optimize the model in each country, based on local market dynamics. Continue to tune the models in each country and drive top line and margin expansion and that's kind of what our focus is going to be in 2023. In VirBELA, as Glenn mentioned, we're making investments to support our foundation, centric cloud business model.

I mean, I've talked about this since I got here. I'm just -- it blows me away how productive and how well this platform works to help us grow and service our agents and our employees. The other part of the VirBELA product is Frame, and so that's -- that is -- that's a web-based software solution that we're generating as we speak. And I think that's going to be on the commercial side. We also generated revenue in VirBELA from third-party enterprises. We license our technology and operate their businesses on our platforms. Lastly, our Other Affiliated Services segments, we house -- in that segment, our investment is in SUCCESS Health and Coaching that help brokers and agents develop personally and professionally, while growing the business. eXp agents represent one of our largest pool of brokers and agents in the industry.

We are focused on leveraging that scale to build high-margin ancillary revenue streams. With that, I'll move to the next slide, review some key metrics on a consolidated basis. So, this is at the consolidated level of EXPI for 2022, the entire year comparing the 2021. Our key operating metrics, and we talk about this every time, ANPS is huge for us. We ended at 71 for the entire year, which is the same number that we ended at last year. It's -- our goal is to shoot above 70, 70 and above, which is world class, and we've done that this year. Agent count, we ended at 86,203 agents, up 21% year-over-year. Our units were 511,089, up 15% year-over-year. And our volume, we ended 2022 volume at $187.3 billion, which is up 20% year-over-year. 2022 revenue grew at 22%, as I mentioned, which reflects growth in the first half, some in the third quarter, and a more challenging market environment in the second half of the year that I will get into in the fourth quarter.

Our full year gross profit increased by 24%, and our gross margin percentage increased slightly . On a full-year adjusted EBITDA of $61 million, we are down from $78 million in 2021 as we made investments to support the international market expansion and drive agent-centric innovation. Full-year 2022 operating cash flow was $242 million, up 17% year-over-year. This also shows, as Glenn was mentioning our ability to generate this level of cash flow in a challenging year speaks of the resilience of our business model. It also provides us with major competitive advantage in a down market. Due to our strong cash flow generation, we ended the year with $122 million of cash and equivalents, up 12% year-over-year, even as we distributed -- after we distributed $205 million to our shareholders in the form of share repurchases and dividends.

On the next slide, we'll take a look now at the fourth quarter. So, the fourth quarter of 2022, especially in the U.S. market, was a challenging environment. Home sales declined more than 30% from the fourth quarter of last year. Interest rates, as we're all very well aware, dramatically increased throughout 2022, reaching a high for the year in Q4 and inventory remained constrained. On this slide, you can see our Q4 segment revenue, adjusted EBITDA for each of our four business segments, and a breakout of our corporate allocations. At a consolidated level, eXp World Holdings ended Q4 with $933.4 million in revenue and $3.6 million in EBITDA. Our North American Realty segment is again the primary driver of revenue at $920.7 million and adjusted EBITDA of 12.1. So, to Glenn's point before, in one of the toughest quarters we've had as an industry, the North American Realty business generated $12.1 million in adjusted EBITDA.

And despite a very challenging environment in the fourth quarter, the North American revenue decline was 14% versus industry-wide sales decline in the 30 plus range, and we remain profitable. International Realty increased revenue by 49% in the quarter to $9.8 million. As you can see, we continue to invest in our international expansion strategy, and VirBELA and other Affiliated Service segments contributed modest amounts of revenue while reflecting our ongoing investment. Now, we will move to our consolidated key metrics for Q4. We ended Q4 with a global agent Net Promoter Score at 73, up from 69 in Q4 2020. Previously mentioned by Glenn, we believe a high NPS score is the best indicator of underlying health of the business and the most important driver of shareholder value over the long term.

At the consolidated level, Q4 and comparing to Q4 2021, our key operating metrics include agent count 86,203, up 21%; units sold 109,168, down 15%; and volume at $37.6 billion, down 16%. Agent growth in Q4 was offset by lower volume per agent as elevated mortgage rates resulted in fewer transactions and price declines year-over-year. On a consolidated basis, Q4 revenues were $933, down 13% year-over-year, reflecting the challenging conditions in our core North American Realty market where we continue to gain share. I'd like to take -- we get a lot of questions over the years about margin. So, this is actually from a margin percentage standpoint. Our margin has actually increased year-over-year, both for 2022 and for Q4. When a down market, revenue share cushion -- revenue share model cushions the impact of our lower revenue on a bottom line as fewer agents hit their caps.

And this was most evident in Q4 when gross margin percentages increased 120 basis points year-over-year to 8.9%. This resulted in roughly a flat gross profit dollar relative to Q4 2021 EBITDA $144 million lower in revenue. So that's kind of how -- we've talked about this before, and that is how the model works. So we -- so with the lower revenue, we actually maintain the same amount of gross profit dollars that we did this time last year. SG&A increased at 15% year-over-year in Q4, driven by higher personnel costs relating to supporting our 21% increase in agent count, which as -- it was partially offset by a reduction in SG&A that we went after in Q3 and Q4, about $4 million per quarter, quarter-over-quarter. Quarter four GAAP net loss was $7.2 million and adjusted EBITDA was a positive 3.6. Despite a down market, we remain adjusted EBITDA profitable in Q4 and generated $38 million of operating cash flow, bringing our full operating cash flow for the entire year to $240 million.

Before opening up the call to Q&A questions-and-answers from our analysts, I just want to take a step back and look at our growth over the longer-term frame, which is shown on the last slide. So, on this chart, what we're showing is our agent count and our total revenue on a quarterly basis over the past six years. Our growth over this period has been extraordinary, with our agent count and revenue increasing from 6,000 agents and $156 million in revenue in 2017 to over 86,000 agents and $4.6 billion in revenue at the end of 2022. Our focus on agent satisfaction has clearly paid off over the long term, and that is why we're doubling down on agent-centric innovation to drive our next phase of growth at eXp. With that, I will turn it back to Denise and begin the Q&A portion of the call.

Thank you, Denise.

A - Denise Garcia: Great. Thanks, Jeff. I'll kick off with a few questions to you and to Glenn before we open the call to our covering analysts. First, I'll start with you, Glenn. You've broken out international from North America Realty for the first time. Can you just talk a little bit about the international opportunity?

Glenn Sanford: Yes. So, international is -- really what we found, having now been growing internationally outside of North America, specifically the U.S. and Canada since 2018, 2019 when we opened up to U.K. and Australia, is that the value prop that we developed here translates very well when we go to international markets. We've added 22 different international markets to eXp and internally that we don't break it out yet, I think, a couple of those markets are actually profitable internally and we expect that more will be profitable over time. Each country is a little bit different. There are almost like -- and some countries are smaller than small states in the United States, so each country is going to have a little bit different mix.

But, as we continue to grow out the marketplace, we think that international is going to be again at scale. When we get to scale internationally, we'll be as big or bigger than North American Realty just because there technically is more agents on lower good financial terms with their brokerages internationally than there is domestically. So, there's a bigger opportunity to help agents create businesses inside of the business as we expand. We're seeing that on calls earlier today, the U.K., last week Australia, and we're always talking with agents in markets around the world and the business model translates.

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