Douglas Elliman Q1 2025 Earnings Report

Douglas Elliman EPS Results

• Actual EPS: -$0.03
• Consensus EPS: $0.02
• Beat/Miss: Missed by -$0.05
• One Year Ago EPS: N/A

Douglas Elliman Revenue Results

• Actual Revenue: $253.40 million
• Expected Revenue: $223.19 million
• Beat/Miss: Beat by +$30.21 million
• YoY Revenue Growth: N/A

Douglas Elliman Announcement Details

• Quarter: Q1 2025
• Date: 5/1/2025
• Time: Before Market Opens
• Conference Call Date: Friday, May 2, 2025
• Conference Call Time: 8:00AM ET

Douglas Elliman (NYSE:DOUG) (NYSE: DOUG) is a residential real estate services company that operates primarily through the Douglas Elliman Realty brand. Its core business is representing buyers and sellers in residential property transactions, including homes, condominiums, cooperatives and luxury properties.

The company also provides related real estate services, including new-development marketing, commercial real estate brokerage, relocation services, property management and other support for real estate owners, developers and consumers. Its development marketing business helps promote and sell newly constructed residential projects.

Douglas Elliman serves clients through offices and affiliated operations in major U.S. real estate markets, including New York, South Florida, California and Colorado, as well as other select markets. The company traces its roots to a New York real estate brokerage founded in 1911 and became an independent publicly traded company following its separation from Vector Group in 2021.

Douglas Elliman Q1 2025 Earnings Call Transcript

Key Takeaways

• Revenues increased by 27% year-over-year to $253.4 million, marking the strongest Q1 performance since 2022.
• Adjusted EBITDA turned positive at $1.1 million versus a loss of $17.6 million in Q1 2024, and adjusted net loss narrowed to $2.4 million from $23.1 million.
• Development marketing division revenues jumped 222% year-over-year to $21.1 million, supported by a $28.3 billion project pipeline (including $18.7 billion in Florida).
• Average price per home sale rose to $2.0 million from $1.6 million year-over-year, with 104 transactions over $10 million (up 76%) illustrating luxury market strength.
• Management highlighted ongoing challenges such as elevated U.S. mortgage rates, low housing inventory, soft transaction volume, tariffs and geopolitical uncertainty that may pressure future results.

Presentation

[Operator]

Please stand by. Your program is about to begin. If you need audio assistance during today's program, please press star zero. Welcome to the Douglas Elliman First Quarter 2025 Earnings Conference Call. This call is being recorded and simultaneously webcast. An archived version of the webcast will be available on the investor relations section of the company's website located at investors.elliman.com for one year. During this call, the terms adjusted EBITDA and adjusted net income or adjusted net loss, as well as last 12 months' metrics, will be used. These terms are non-GAAP financial measures and should be considered in addition to, but not as a substitute for, other measures of financial performance prepared in accordance with GAAP. Reconciliations to adjusted EBITDA and adjusted net income or adjusted net loss are contained in the company's earnings release, which has been posted to the investor relations section of the company's website.

[Operator]

Before the call begins, I would like to read a Safe Harbor statement. The statements made during this conference call that are not historical facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth or implied by forward-looking statements. These risks are described in more detail in the company's Securities and Exchange Commission filings. Now I'd like to turn the call over to the Chief Executive Officer of Douglas Elliman, Michael S. Liebowitz.

[Michael S. Liebowitz, CEO at Douglas Elliman]

Good morning and thank you for joining us. I am pleased to share that Douglas Elliman continues to make meaningful progress as we execute our strategy to drive growth, improve profitability, and position the company for long-term success. With me on the call is Bryant Kirkland, our Chief Financial Officer. On today's call, we will discuss the current operating environment and Douglas Elliman's financial results for the three months ended March 31st, 2025. All numbers presented this morning will be as of March 31, 2025, unless otherwise stated. We will then provide closing comments and open the call for questions. Before we turn to our first quarter 2025 results, I would like to start by summarizing some of our accomplishments over the last 90 days. We are building on the momentum we established last year.

[Michael S. Liebowitz, CEO at Douglas Elliman]

In the first quarter of 2025, our revenues increased by 27% year-over-year to $253.4 million, marking our strongest first quarter performance since 2022. This growth reflects the strength of our historic brand, the dedication of our agents, and the success of our strategic initiatives. We also made strong progress for restoring our non-GAAP profitability with significant reductions in operating losses when compared to the first quarter of 2024. Our agents and employees remain at the center of everything we do. Their hard work and commitment to excellence continue to drive our success. We are proud to support them with the tools and technology they need to excel in today's market. Now let's discuss the future. Looking ahead to the second quarter, we are encouraged by the trends we are observing. While challenges persist, such as continuation of elevated U.S.

[Michael S. Liebowitz, CEO at Douglas Elliman]

Mortgage rates, low housing inventory, soft transaction volume, broader economic trends, tariffs, and other geopolitical uncertainty, our average daily cash receipts in April of 2025 were up approximately 4% compared to the same period in 2024. These results illustrate the resilience and strength of the luxury markets we serve. We remain focused on executing our strategic growth initiatives, including our development marketing division, which continues to be a cornerstone of our long-term growth strategy. As demand for luxury residences continues to build in our markets, this division is very well positioned to capitalize on the growing demand for luxury residences in our markets. We continue to prioritize expense discipline while optimizing operations and are making meaningful progress. By balancing strategic investments with thoughtful cost management, we are well positioned to capitalize on future opportunities to expand our revenue base, particularly in recruiting and in our international expansion.

[Michael S. Liebowitz, CEO at Douglas Elliman]

Our strategic M&A and business development unit continues to evaluate complementary acquisitions in ancillary businesses such as title, escrow, insurance brokerage, and property management that would align with our ROI targets and long-term strategy. We believe our ongoing efforts are transforming Douglas Elliman into a more diversified, resilient, and forward-looking real estate services company, one that is well equipped to thrive in an evolving market and deliver long-term value. With that, I will turn it over to Bryant, who will provide more details on our financial performance and the trends shaping the residential real estate market. Bryant?

[Bryant Kirkland, CFO at Douglas Elliman]

Thank you, Michael. We are confident that the improvement in financial results that began in 2024 and which has continued into the first quarter of 2025 is positioning Douglas Elliman for long-term success. The first quarter results indicate our core operations are continuing to benefit from the expense reductions management has implemented, as well as the significant investments made in our development marketing division. In particular, the first quarter results were enhanced by a favorable sales mix, resulting from the strength of our highest gross margin markets, the development marketing division, and existing home sales in New York City. Specifically, New York City's revenues from existing home sales increased by $17 million, or 34%, from the 2024 first quarter, and development marketing's first quarter revenues increased by $14.6 million, or 222%, from the 2024 first quarter. Before reviewing the financial performance, we will provide some updates on our trends.

[Bryant Kirkland, CFO at Douglas Elliman]

First, Douglas Elliman owns luxury. Pricing for luxury home sales remains strong. Our industry-best average price per transaction rose to $2 million per home sale compared to $1.6 million per home sale in the comparable 2024 period. For the last 12 months, our average price per home sale transaction has been $1.76 million compared to $1.6 million per home sale in the 2024 last 12-month period. In the first quarter of 2025, our world-class agents sold 343 homes for approximately $5 million or more. That was a 73% increase from the same quarter last year and impressively represented 7% of our total transactions during the first quarter. Equally impressive are 104 home sales of $10 million or more, an increase of 76% from the same quarter last year. Again, Douglas Elliman owns the luxury markets it serves.

[Bryant Kirkland, CFO at Douglas Elliman]

Continuing with that theme, and as Michael discussed, our development marketing division remains the preeminent industry player with a pipeline of actively marketed projects of approximately $28.3 billion of gross transaction value. Approximately $18.7 billion of gross transaction value is in Florida alone. In addition to this active pipeline, we have another $4.2 billion of gross transaction value coming to market through June 2026. We believe this foundation of business bodes well for the future, as we will recognize commission income from these projects when they close, which is generally between 2025 and 2030. Beginning with a strong performance in the fourth quarter of 2024 from development marketing, we are continuing to see the early momentum of this pipeline as development marketing's revenue increased to $21.1 million in the first quarter of 2025, up from $6.6 million in the 2024 first quarter.

[Bryant Kirkland, CFO at Douglas Elliman]

Transitioning to updates on our expense structure, we continue to manage investments across our markets with a strict focus on return on investment metrics. In the first quarter of 2025, we reduced our operating expenses by $3 million from the first quarter of 2024 after excluding commissions, depreciation and amortization, unusual litigation expense settlement and related expense, restructuring expenses, and non-cash stock compensation expenses. Now, turning to Douglas Elliman's financial results for the three months ended March 31st, 2025. Douglas Elliman maintains active and ample liquidity, with cash and cash investments at March 31st, 2025, of approximately $137 million. The strength of our balance sheet provides a competitive advantage for Douglas Elliman as we implement expansion plans to scale our operations and strengthen our services platform.

[Bryant Kirkland, CFO at Douglas Elliman]

Historically, a significant cash flow drain occurs in the first quarter because of the seasonality of our business and the timing of annual cash bonuses, which are generally paid in March. That said, the decline in cash investments was $8.7 million in the first quarter of 2025 compared to $28.4 million in the first quarter of 2024, an improvement of approximately $20 million. Moving to the operating performance of the business in the first quarter, Douglas Elliman reported $253.4 million in revenues compared to $200.2 million in the 2024 first quarter. Net loss for the first quarter was $6 million or $0.07 per diluted share compared to $41.5 million or $0.50 per diluted share in the 2024 first quarter. Adjusted EBITDA for the first quarter was a positive $1.1 million compared to a loss of $17.6 million in the 2024 first quarter.

[Bryant Kirkland, CFO at Douglas Elliman]

Adjusted net loss for the first quarter was $2.4 million or $0.03 per share compared to adjusted net loss of $23.1 million or $0.28 per share in the 2024 first quarter. Thank you for your attention, and back to you, Michael.

[Michael S. Liebowitz, CEO at Douglas Elliman]

Thanks, Bryant, and thank you and your team for your hard work this quarter. You guys did a great job. I continue to believe in the strength and brand power of the Douglas Elliman brand and its scalability, and we are very excited about our future. The results of the last two quarters show we are continuing our turnaround and performing extremely well. Our best days are ahead. With that, we will be happy to answer any questions. Operator?

[Operator]

Thank you. At this time, if you would like to ask a question, please press the star one on your telephone keypad. You may remove yourself from the queue at any time by pressing star two. Once again, that is star one for a question. We'll pause for a moment. Again, ladies and gentlemen, that is star one for a question. At this time, we have no questions. We thank you for joining us on the Douglas Elliman quarterly earnings conference call. We hope you have a good day, and this will conclude our call.

[Bryant Kirkland, CFO at Douglas Elliman]

Thank you.

Participants

Executives

• Michael S. Liebowitz, CEO
• Bryant Kirkland, CFO