eXp World Holdings Inc

eXp World Holdings, Inc.**

Notes to Consolidated Financial Statements

**(Amounts in thousands, except share and per share amounts, unless otherwise noted)

eXp World Holdings, Inc. (collectively with its subsidiaries, the “Company” or “eXp”) was incorporated in the State of Delaware on July 30, 2008. eXp owns and operates a diversified portfolio of service-based businesses whose operations benefit substantially from utilizing our enabling technology platform. Specifically, we operate a cloud-based real estate brokerage in North America and other international locations, and related affiliated services that support the development and success of agents, entrepreneurs and businesses by leveraging innovative technologies and integrated services. Our North American and international real estate brokerage is now one of the largest real estate brokerage companies, operating throughout the United States, all of the Canadian provinces, the U.K., Australia, South Africa, India, Mexico, Portugal, France, Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Panama, Germany, the Dominican Republic, Greece, New Zealand, Chile, Poland and Dubai.

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is December 31.

In the first quarter of 2024, the Company determined that there was a significant change to the Virbela business model. As our customers evolve post-COVID, including a return-to-work-offices, and in light of ongoing internal and external demand for web-accessible platforms and AI solutions, we experienced a decline in demand for our application-based platform, Virbela, the technology is being replaced with Virbela FrameVR.io technology that will be primarily utilized internally within the Company. As a result of this change, the Company determined that Virbela qualified for reporting as discontinued operations. In accordance withASC 205 – Presentation of Financial Statements, any remaining assets and liabilities of Virbela will be presented within discontinued operations in the Company’s consolidated balance sheet and Virbela’s results of operations have been included in discontinued operations in the Company’s consolidated statements of comprehensive (loss) income. During the fourth quarter of 2024, the Company completed the disposition of Virbela, the balance sheet was transferred to the purchaser of Virbela, and a loss of$266 was recognized.

Prior to 2024, Virbela represented an operating and reporting segment under ASC 280. Beginning in the first quarter of 2024, the remaining operations of Virbela will not meet the operating or reporting segment criteria, therefore, any operating results related to FrameVR.io technologies will be included in the Other Affiliated Services segment. Prior year financial statements and segment information have been reclassified to reflect Virbela as discontinued operations.

The Company evaluated the impact of discontinued operations on the consolidated statements of cash flows and determined that the changes were not material. Accordingly, the prior-period cash flow statements have not been restated. The cash flows of discontinued operations are included within the respective categories of operating, investing, and financing activities in the consolidated statements of cash flows. The cash balances as of December 31, 2023 and December 31, 2022 include the cash held by the discontinued operations.

We report operating results through three reportable segments: North American Realty, International Realty and Other Affiliated Services, as further discussed inNote 11 – Segment Informationto the consolidated financial statements included elsewhere in this Annual Report.

Principles of consolidation

The accompanying consolidated financial statements include the accounts of eXp World Holdings, Inc., its wholly-owned subsidiaries and 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 does not exercise control over the operations and has less than 50% ownership, it will use the equity or 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 (“VIEs”)

A company is deemed to be the primary beneficiary of a VIE and must consolidate the entity if the company has both: (i)the power to direct a VIE’s activities 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. Joint ventures are typically included in the Other Affiliated Services unless the joint venture specifically supports one of the reportable segments.

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. The Company has reclassified Virbela operations as discontinued operations, and prior year financial statements and segment information have been reclassified to conform with current year presentation. To more clearly present technology and development expenses, the Company elected to present all technology and development expenses as a separate line item on the consolidated statements of comprehensive (loss) income. In 2023 and 2022, the Company presented technology and development expenses within general and administrative expenses and sales and marketing expenses. These amounts have been reclassified, in conformity with the current year’s presentation of technology and development expenses on the consolidated statements of comprehensive (loss) income. These reclassifications had no effect on the reported results of operations.

Cash and cash equivalents

Cash and cash equivalents include cash on hand, money market instruments and all other highly liquid investments purchased with an original or remaining maturity of three months or less at the date of acquisition.

Restricted cash

Restricted cash consists of cash held in escrow by the Company’s brokers and agents on behalf of real estate buyers. The Company recognizes a corresponding customer deposit liability until the funds are released. Once the cash is transferred 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 consolidated balance sheet that sum to the total of the same amounts shown on the statement of cash flows.

Fair value measurements

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:

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The Company holds funds in a money market account. The Company values its money market funds at fair value on a recurring basis.

Accounts receivable and allowance for 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 an allowance under the CECL impairment model. 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 December 31, 2024 and 2023, receivables from real estate property settlements totaled$82,300 and$81,004, respectively, of which the Company recognized expected credit losses of$34 as of December 31, 2024 andno credit losses as of December 31, 2023. As of December 31, 2024 and 2023 agent non-commission based fees receivable and short-term advances totaled$6,980 and$7,268, respectively of which the Company recognized expected credit losses of$1,555 and$2,204, respectively.

Foreign currency translation

The Company’s functional and reporting currency is the United States dollar, and the functional currency of the Company’s foreign subsidiaries is the local currency of their country of domicile. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the consolidated statements of comprehensive (loss) income, in other (income) expense, net. The Company does not employ a hedging strategy to manage the impact of foreign currency fluctuations.

Fixed assets

Fixed assets are stated at historical cost and are depreciated on the straight-line method over the estimated useful lives. Useful lives are:

Computer hardware and software: 3 to 5 years

Furniture, fixtures and equipment:5 to 7 years

Maintenance and repairs are expensed as incurred. Expenditures that substantially increase an asset’s useful life or improve an asset’s functionality are capitalized.

The Company capitalizes the costs associated with developing its internal-use cloud-based residential real-estate transaction system. Capitalized costs are primarily related to costs incurred in relation to internally created software during the application development stage including costs for upgrades and enhancements that result in additional functionality.

Leases

Leases are agreements, or terms within agreements, that convey the right to control the use of and receive substantially all of the economic benefit from an identified asset for a period of time in exchange for consideration. The Company currently only possesses leases for short-term office space and other low-value assets*.*

Short-term leases and leases of low-value assets

The Company applies the short-term lease recognition exemption to leases that have a lease term of 12 months or less from the commencement date and which do not contain a purchase option. Lease payments on short-term leases and low-value leases are recognized as expenses on a straight-line basis over the lease term.

Software development costs

The Company capitalizes software development costs related to products to be sold, leased, or marketed to external users and internal-use software.

Business combinations

The Company accounts for business combinations using the acquisition method of accounting, under which the consideration for the acquisition is allocated to the assets acquired and liabilities assumed. The Company recognizes identifiable assets acquired and liabilities assumed at the acquisition date fair values as determined by management as of the acquisition date. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates and market factors. These assumptions and estimates include projected revenues and income growth rates, terminal growth rates, competitive and consumer trends, market-based discount rates and other market factors. If current expectations of future growth rates are not met or market factors outside of the Company’s control change significantly, then goodwill or intangible assets may become impaired.

Acquisition-related costs, such as due diligence, legal and accounting fees, are expensed as incurred and not considered in determining the fair value of the acquired assets.

Impairment of long-lived assets

The Company periodically evaluates the carrying value of long-lived assets to be held and used when events and circumstances warrant such a review. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is less than its carrying value. When assets are considered impaired, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved.

Stock-based compensation

Our stock-based compensation is comprised of employee equity incentives, agent growth incentive programs, agent equity program, stock option awards and restricted stock units. Stock-based compensation is more fully disclosed inNote 10 – Stockholders’ Equity. The Company accounts for stock-based compensation granted to employees and non-employees using a fair value method. Stock-based compensation awards are measured at the grant date fair value and are recognized over the requisite service period of the awards, usually the vesting period, on a straight-line basis, net of forfeitures. The Company reduces stock-based compensation for forfeitures when they occur.

Recognition of compensation cost for an award with a performance condition is based on the probable outcome of that performance condition being met.

Revenue recognition

The Company generates substantially all of its revenue from North American Realty and International Realty segments and generates a de minimis portion of its revenues from software subscription and professional services. The Company does not have contracts with customers that provide variable consideration.

The Company serves as a licensed broker in the areas in which it operates for the purpose of processing residential real estate transactions. The Company is contractually obligated to provide services for the fulfillment of transfers of residential real estate between buyers and sellers. The Company provides these services itself and controls the services necessary to legally transfer residential real estate. Correspondingly, the Company is defined as the principal. The Company, as principal, satisfies its obligation upon the closing of a residential real estate transaction. As principal and upon satisfaction of the performance obligation, the Company recognizes revenue in the gross amount of consideration to which the Company expects to be entitled. The Company estimates and accrues revenue to which it is entitled to for closed transactions but has yet to receive all the necessary closing documents.

Revenue is derived from assisting homebuyers and sellers in listing, marketing, selling and finding residential real estate. Commissions earned on real estate transactions are recognized at the completion of a residential real estate transaction once the Company has satisfied the performance obligation. Agent-related fees charged by the Company are recorded as a reduction to commissions and other agent-related costs.

Software Subscription and Professional Services

Subscription revenue is derived from fees from customers to access the Company’s virtual reality software platform. The terms of subscriptions do not provide customers the right to take possession of the software. Subscription revenue is generally recognized ratably over the contract term.

Professional services revenue is derived from implementation and consulting services. Professional services revenue is typically recognized over time as the services are rendered, using an efforts-expended (labor hours) input method.

Disaggregated revenue

The Company primarily operates as a real estate brokerage firm and discloses disaggregated revenue from services to customers across itsthree reportable segments to provide additional insight into the future recognition of revenue and cash flows. The vast majority of the Company’s revenue is derived from providing real estate brokerage services, to purchasers and sellers of homes in the U.S., Canada and internationally. SeeNote 11 – Segment Information for details regarding segment and geographic information.

Management provides disaggregation of revenue from its services to customers to provide additional insight into the future recognition of revenue and cash flows.

Sustainable Revenue Share Plan expenses

The Company has a revenue sharing plan where its agents and brokers can receive additional commission income from real estate transactions consummated by agents and brokers they have attracted to the Company. Agents and brokers are eligible for revenue share based on the number of FLQA agents they have attracted to the Company. An FLQA agent is an agent or broker that an agent has personally attracted to the Company who has met specific real estate transaction volume requirements. These additional commissions are earned on a multitiered basis by FLQA agents and brokers for real estate transactions within their downstream brokerage network. The supplementary income distributed to the sponsor under the Revenue Share Plan is exclusively derived from the Company's portion of the transaction commission. The Company’s costs incurred under the Revenue Share Plan are included as commissions and other agent-related costs in the consolidated statements of comprehensive (loss) income.

Advertising and marketing costs

Advertising and marketing costs are generally expensed in the period incurred. Advertising and marketing expenses are included in the sales and marketing expense line item on the accompanying consolidated statements of comprehensive (loss) income. For the years ended December 31, 2024, 2023 and 2022, the Company incurred advertising and marketing expenses of$11,908,$12,056 and$15,172, respectively.

Income taxes

The Company records income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are recorded based on the estimated future tax effects of differences between the financial statement and income tax basis of existing assets and liabilities. These differences are measured using the enacted statutory tax rates that are expected to apply to taxable income for the years in which differences are expected to reverse. The Company recognizes the effect on deferred income taxes of a change in tax rates in income in the period that includes the enactment date.

The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

The Company records uncertain tax positions on the basis of a two-step process whereby: (i) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, it recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.

Comprehensive (loss) income

The Company’s only components of comprehensive (loss) income are net (loss) income and foreign currency translation adjustments.

Earnings per share

Basic earnings (loss) per share is computed by dividing the net (loss) income for the period by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is computed by dividing net (loss) income for the period by the weighted average number of shares of common stock outstanding plus, if potentially dilutive common shares outstanding during the period. The Company has paid dividends in 2024, 2023 and 2022. The Company does not have participating shares outstanding.

Accounting pronouncements

The Company* *has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting standards that have been issued that might have a material impact on its financial position and results of operations.

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03 – Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosure (Subtopic 220-40). ASU 2024-03 requires disclosure in the notes to the financial statements, specified information about certain costs and expenses. The amendment requires that at each interim and annual reporting period an entity: 1) Disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization and (e) depreciation, depletion, and amortization recognized as part of oil-and-gas producing activities. 2) Include certain amounts that are already required to be disclosed under current generally accepted accounting principles (GAAP) in the same disclosure as the other disaggregation requirements. 3) Disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. 4) Disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. This amendment is effective for all public business entities for annual periods beginning after December 31, 2026, and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the effect ASU 2024-03 will have on its disclosures.

The Company did not complete any material acquisitions during the years ended December 31, 2024 and 2023.

On July 1, 2022, the Company acquired Zoocasa Realty Inc. in a stock purchase transaction. The total consideration paid was$17,155 including net cash of$9,910 (net of cash acquired of$2,772), stock issued from treasury of$4,554 and a working capital adjustment. The Zoocasa acquisition has been accounted for using the acquisition method of accounting.

In accordance with ASC 205-20, the results of the Virbela business are presented as discontinued operations in the consolidated statements of comprehensive income and, as such, have been excluded from continuing operations. Further, the Company reclassified the assets and liabilities of the Virbela segment as assets and liabilities of discontinued operations in the consolidated balance sheets. In the fourth quarter of 2024, the Company completed the disposition of Virbela. The following tables present the information for Virbela’s operations for the year ended December 31, 2024 and 2023, and the balance sheet information as of December 31, 2024 and December 31, 2023 (in thousands).

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 December 31, 2024 and 2023, the fair value of the Company’s money market funds was$38,344 and$46,268, respectively.

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

Prepaids and other assets consisted of the following:

Property, plant and equipment, net consisted of the following:

For the years ended December 31, 2024, 2023 and 2022, depreciation expense was$7,835,$8,352 and$7,934, respectively.

Changes in the carrying amount of goodwill were:

During the fourth quarter of 2024, as part of the Company’s annual goodwill impairment assessment, the Company determined that the goodwill associated with SUCCESS was impaired, as a result of the changing market conditions surrounding print media. During the fourth quarter of 2023, as part of the Company’s annual goodwill impairment assessment, the Company determined that the goodwill associated with Virbela (included in discontinued operations), was impaired. The Company recognized goodwill impairment charges of$2,386 and$8,248 for the years ended December 31, 2024 and 2023, respectively.

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.

Definite-lived intangible assets were as follows:

For the years ended December 31, 2024, 2023 and 2022, amortization expense for definite-lived intangible assets was$2,454,$2,540, and$1,904, respectively.

As part of the Company’s annual assessment, the Company also reviews the useful lives of its amortizable intangible assets and determines if there should be any change to the amortization period. In 2024, for amortizable intangible assets related to SUCCESS, the Company determined that customer relationships and content (included in Intellectual Property) should have been fully amortized as of December 31, 2024. This assessment was based on the decline in the estimated fair value for each of those assets. As a result, the Company recognized animpairment loss related to the net book value of the customer lists of$549 and content of$1,995. In 2023, for the amortizable assets related to the Virbela segment, the Company determined that the trade name and the customer relationships that were recognized as part of the acquisition, should be fully amortized as of December 31, 2023. As a result, the Company recognized an impairment loss (included in discontinued operations) related the net book value of the trade name of$585 and customer relationships$370.

Accrued expenses consisted of the following:

Common Stock – As of December 31, 2024, our restated certificate of incorporation authorized us to issue 900,000,000 shares of common stock with a par value of$0.00001 per share.

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

The Company’s stockholder approved equity programs described below are administered under the 2024 Equity Incentive Plan, beginning in September 2024. Prior to that time, the equity programs were administered under the 2015 Equity Incentive Plan which has since terminated. 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.

The Company declared and paid dividends of$0.05 quarterly in 2024,$0.045 in each of the first and second quarters of 2023,$0.05 in each of the third and fourth quarters of 2023,$0.040 in each of the first and second quarters of 2022 and$0.045 in each of the third and fourth quarters of 2022. Dividends are declared at the discretion of the Board of Directors and are based on various factors, including the Company’s financial condition, results of operations, capital requirements, and market conditions. The total cash dividends paid during each of these years were funded from available cash and were recorded as reductions to retained earnings.

Agent Equity Program (“AEP”)

The Company provides agents and brokers the opportunity to elect to receive 5% of commissions earned from each completed residential real estate transaction in the form of common stock of the Company at a discount recognized by the Company. 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.

For the years ended December 31, 2024, 2023 and 2022, the Company issued 9,253,300,8,897,804 and 11,462,940 shares of common stock, respectively, to agents and brokers for$111,278,$135,226 and$164,104, respectively, net of discount, attributable to the AEP.

Agent Growth Incentive Program (“AGIP”)

The Company administers AGIP whereby agents and brokers become eligible to receive awards of the Company’s common stock through agent attraction and performance benchmarks. 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 performance metrics are achieved. As such, the awards are classified as liabilities until the number of share awards becomes fixed once the performance metric is achieved.

For the years ended December 31, 2024, 2023 and 2022, the Company’s stock compensation attributable to the AGIP was$37,265,$43,178 and$30,861, respectively. The total amount of stock compensation attributable to liability classified awards was$2,251,$3,832 and$2,056 for the years ended December 31, 2024, 2023 and 2022, respectively.

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

As of December 31, 2024, the Company had 7,959,572 unvested common stock awards and unrecognized compensation costs totaling$59,519 attributable to stock awards where the performance metric has been achieved and the number of shares awarded are fixed. The cost is expected to be recognized over a weighted average period of 2.01 years.

The following table illustrates the Company’s stock activity for the Agent Growth Incentive Program for stock awards where the performance metric has been achieved for the following periods:

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 generally have time-based restrictions with equal and periodically graded vesting over athree-year period.

The fair value of the options issued is calculated using a Black-Scholes-Merton option-pricing model with the following assumptions:

The following table illustrates the Company’s stock option activity for the following periods:

The grant date fair value of options to purchase common stock is recorded as stock-based compensation over the vesting period. As of December 31, 2024, unrecognized compensation cost associated with the Company’s outstanding stock options was$14,259, which is expected to be recognized over a weighted-average period of approximately 1.18 years.

Other Awards

In addition to the core programs described above, the Company may grant other equity-based or ad hoc awards as needed to attract and retain employees, agents, or team leaders. These awards are generally granted with time-based or performance-based vesting conditions, and the terms are determined based on the specific objectives of the grant.

To date, participation and grants of this variety have been limited.

Restricted Stock Units

Beginning in 2024, the Company granted restricted stock units (“RSUs”) to officers and certain employees and may grant them to directors and consultants in the future. Each RSU represents the right to receiveone share of the Company’s common stock upon vesting, subject to time-based and/or performance-based restrictions. RSUs typically vest over athree-year period with equal and periodically graded vesting or cliff vesting, as applicable. RSUs do not have an exercise price, andno payment is required by the grantee to receive the shares upon vesting.

The fair value of the RSUs granted is determined based on the closing market price of the Company's common stock on the grant date. The total fair value of RSUs is recognized as stock-based compensation expense over the vesting period, with adjustments for estimated forfeitures.

For the year ended December 31, 2024, the Company granted 115,574 RSU’s with a weighted average grant date fair value of$13.00. As of December 31, 2024, the total unrecognized stock-based compensation expense associated with RSUs was$1,222 which is expected to be recognized over a weighted-average period of approximately 2.27 years.

Stock Repurchase Program

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 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, which amendment was signed May 6, 2022. 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. On November 17, 2023, the Board approved, and the Company entered into, a form of sixth amendment to the Issuer Repurchase Plan to reduce the monthly repurchase from (i)$12.0 million to$8.0 million during November 2023, (ii) from$12.0 million to$6.0 million during any calendar month commencing December 1, 2023 through and including June 30, 2024.

On March 5, 2024, the Board approved, and, on March 6, 2024, the Company entered into, a form of seventh amendment to the Issuer Repurchase Plan to increase the monthly repurchase from (i)$6.0 million to$20.0 million during any calendar month commencing March 1, 2024 through and including April 30, 2024, and (ii) from$6.0 million to$15.0 million during any calendar month commencing May 1, 2024 through and including December 31, 2024. On June 19, 2024, the Board approved, and the Company entered into, a form of eighth amendment to the Issuer Repurchase Plan to decrease the monthly repurchase from (i)$15.0 million to$11.7 million during any calendar month commencing July 1, 2024 through and including September 30, 2024, and (ii) from$15.0 million to$8.3 million during any calendar month commencing October 1, 2024 through and including December 31, 2024. On December 5, 2024, the Board approved, and the Company entered into, a form of ninth amendment to the Issuer Repurchase Plan to establish the monthly repurchase maximum as (i)$1.5 million during the calendar months commencing January 1, 2025 and ending February 28, 2025, (ii)$2.0 million during the calendar month commencing March 1, 2025 and ending March 31, 2025, (iii)$10.0 million during the calendar months commencing April 1, 2025 and ending June 30, 2025, (iv)$15.0 million during the calendar months commencing July 1, 2025 and ending October 31, 2025, and (v)$10.0 million during the calendar months commencing November 1, 2025 and ending December 31, 2025.

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 changes in treasury stock shares for the periods presented:

11. SEGMENT INFORMATION

Segment information aligns with how the Chief Operating Decision Maker (“CODM”), Glenn Sanford, Chief Executive Officer of eXp World Holdings, Inc., manages the business and allocates resources asthree operating segments. The Company determines an operating segment if a component (i) engages in business activities from which it earns revenues and incurs expenses, (ii) has discrete financial information and is (iii) regularly reviewed by the CODM. Once operating segments are identified, the Company performs a quantitative analysis of the current and historic revenues and profitability for each operating segment, together with a qualitative assessment to determine if operating segments have similar operating characteristics. We have three operating segments andthree reportable segments.

The CODM uses revenues and Adjusted Segment EBITDA as key metrics to evaluate the operating and financial performance of a segment, identify trends affecting the segments, develop projections and make strategic business decisions. The CODM also regularly reviews commissions and other agent-related costs to assess segment performance. Commissions and other agent-related costs include sales commissions, revenue share and stock-based compensation paid to our agents. Adjusted Segment EBITDA for the reportable segments is defined as net income before depreciation and amortization, interest expense, income taxes, and other items that are not core to the operating activities of the Company. The Company’sthree reportable segments as follows:

Historically, the Company has reported results forfour reportable segments. In the first quarter of 2024, the Company determined that the Virbela segment qualified for reporting as discontinued operations. In prior years, Virbela represented an operating and reporting segment under ASC 280. Prior years segment information has been reclassified to remove Virbela from the segment disclosure, in accordance with discontinued operations treatment.

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 inFootnote 2 – Summary of Significant Accounting Policies. 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 (in thousands). Financial information for the comparable prior periods presented have been revised to conform with the current year presentation.

Geographical information

For the years ended December 31, 2024, 2023 and 2022 approximately 11%,9% and 9%, respectively, of the Company’s total revenue was generated outside of the U.S. Long-lived assets held outside of the U.S. were 17% and 14% as of December 31, 2024 and 2023, respectively.

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

12. EARNINGS PER SHARE

Basic earnings per share is computed based on the Company’s net income 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:

For the years ended December 31, 2024, 2023 and 2022, total outstanding shares of common stock excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive were 3,698,061,820,376 and 1,000,421, respectively.

13. INCOME TAXES

The following table provides the components of income (loss) before provision for income taxes from continuing operations by domestic and foreign subsidiaries:

The components of the income tax (benefit) expense from continuing operations are as follows:

The reconciliation of the provision for income tax (benefit) expense from continuing operations at the United States federal statutory rate compared to the Company's income tax (benefit) expense as reported is as follows:

The company has restated prior year amounts to remove amounts from discontinued operations.

Deferred tax assets and liabilities from continuing operations consist of the following for the periods presented:

The Company accounts for deferred taxes underASC Topic 740 – Income Taxes (“ASC 740”), which requires a reduction of the carrying amount of deferred tax assets by a valuation allowance if, based on available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed periodically based on the ASC 740 more-likely-than-not realization threshold criterion. This assessment considers matters such as future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. The evaluation of the recoverability of the deferred tax assets requires that the Company weigh all positive and negative evidence to reach a conclusion that it is more likely than not that all or some portion of the deferred tax assets will not be

realized. The weight given to the evidence is commensurate with the extent to which it can be objectively verified. As of December 31, 2024, based on its assessment of the realizability of its net deferred tax assets, we reached the conclusion that our US federal, and foreign net deferred tax assets more-likely-than-not will be fully realized, however certain US State deferred tax assets will likely not be fully realized. A valuation allowance of$0.2 million was recorded in the current year to reflect the portion of net deferred tax assets that are likely to not be fully realized.

As of December 31, 2024, the Company had federal, state and foreign net operating losses of approximately$92.2 million,$66.3 million and$12.7 million, respectively. The full amount of$92.2 million of federal net operating loss can be carried forward indefinitely and can offset 80% of future taxable income. Certain state net operating losses will carry forward for a limited number of years and, if not utilized, may begin to expire in 2024. Certain foreign net operating losses will carry forward for a limited number of years and, if not utilized, will begin to expire in 2028. The Company conducted an IRC Section 382 analysis with respect to its net operating loss carryforward and determined there was an immaterial limitation.

Undistributed earnings of the Company’s foreign subsidiaries are considered to be indefinitely reinvested and accordingly, no provision for applicable income taxes has been provided thereon. Upon distribution of those earnings, the Company would be subject to withholding taxes payable to various foreign countries. As of December 31, 2024 the undistributed earnings of the Company's foreign subsidiaries could result in withholding taxes of approximately$1.2 million, if repatriated.

As of December 31, 2024, the Company had federal and California Research and Development credit carryforwards of approximately$7.0 million and$0.6 million, respectively. The federal credit can be carried forward 20 years and will begin to expire in 2039. The California credit can be carried forward indefinitely.

The Company maintains liabilities for uncertain tax positions. These liabilities involve considerable judgment and estimation and are continuously monitored by management based on the best information available, including changes in tax regulations, the outcome of relevant court cases, and other information. A reconciliation of the beginning and ending amount of gross unrecognized benefits is as follows:

The unrecognized tax benefits relate to federal and California research and development credits generated from 2019 through 2024. The total amount of unrecognized tax benefits that would affect the Company’s effective tax rate, if recognized, is$2,573 and$1,904 at December 31, 2024 and 2023, respectively. The Company's policy is to recognize interest and penalties related to income tax matters in income tax expense. As of December 31, 2024 and 2023, the Company did not accrue interest or penalties related to uncertain tax positions. The Company does not expect any of the uncertain tax positions to reverse during the next 12 months.

There are no federal or state tax examinations in progress. Because the Company has net operating loss carryforwards, there are open statutes of limitations in which federal taxing authorities may examine the Company's tax returns for all years from December 31, 2012 through the current period. US State taxing authorities may examine the Company's tax returns for all years from December 31, 2014 through the current period and foreign tax authorities may examine the Company’s tax returns for all years from December 31, 2019 through the current period.

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 I and II by countries, and all other tax regulatory changes, to evaluate the potential impact on future periods. The adoption of Pillar Two rules did not have a significant impact on the Company's consolidated financial statements in 2024.

14. COMMITMENTS AND CONTINGENCIES

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.

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. The Company believes that its defenses and assertions in pending legal proceedings have merit and the Company believes that it has adequately and appropriately accrued for legal matters that are estimable. However, substantial unanticipated judgments, penalties, sanctions, and fines do occur. As a result, the Company could from time to time incur judgments, enter into settlements, or revise its expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on its results of operations in the period in which the amounts are accrued and/or its cash flows in the period in which the amounts are paid.

Antitrust Litigation

The Company and its affiliated brokerage entities were among several defendants in eight U.S. and one Canadian putative class action lawsuits alleging that the Company participated in a system that resulted in sellers of residential property paying inflated buyer broker commissions in violation of U.S. federal and state antitrust laws and federal Canadian antitrust laws, as applicable, and one U.S. putative class action lawsuit alleging that the Company participated in a system that resulted in buyers of residential property paying inflated home prices as a result of sellers paying inflated buyer broker commissions in violation of federal and Illinois antitrust laws (collectively, the “antitrust litigation”). On December 9, 2024, the Company and certain of its subsidiaries entered into a Settlement Agreement (the “Settlement”) with plaintiffs in the U.S. antitrust lawsuit1925 Hooper LLC, et al. v. The National Association of Realtors et. al., Case No. 1:23-cv-05392- SEG (United States District Court for the Northern District of Georgia, Atlanta Division), which was filed on November 22, 2023 against the Company and other US brokerage defendants (the “Hooper Action”). The Settlement resolve all claims set forth in the Hooper Action, and similar claims on a nationwide basis against the Company (collectively, the “Claims”) and releases the Company, its subsidiaries and affiliates, and their independent contractor real estate agents in the United States from the Claims. By the terms of the Settlement, the Company agreed to make certain changes to its business practices and to pay a total settlement amount of$34,000 (the “Settlement Amount”) into a qualified settlement escrow fund (the “Settlement Fund”). The Settlement Amount is expected to be deposited into the Settlement Fund in installments, of which 50% of the settlement (or$17,000) will be deposited into the Settlement Fund within thirty business days after preliminary court approval of the Settlement and the final 50% (for$17,000) being deposited on or before the one-year anniversary of initial settlement payment. The Company intends to use available cash to pay the Settlement Amount. Management has determined that a$34.0 million loss is probable and have included a$34.0 million litigation contingency accrual recorded for the year ended December 31, 2024. While management has determined that loss in excess of the accrual is reasonably possible, it is currently unable to reasonably estimate the possible additional loss or range of possible additional loss because, among other reasons, (i) the settlement is subject to court approval and appeals processes, (ii) further developments in the legal proceedings, including but not limited to motions, or rulings, could impact the Company's exposure, or (iii) potential changes in law or precedent could affect the final determination of liability.

The Settlement remains subject to preliminary and final court approval and will become effective following any appeals process, if applicable. The Settlement and any actions taken to carry out the Settlement are not an admission or concession of liability, or of the validity of any claim, defense, or point of fact or law on the part of any party. The Company continues to deny the material allegations of the complaints in the antitrust litigation. The Company entered into the Settlement after considering the risks and costs of continuing the litigation.

The Company continues to vigorously defend against the claims in Canadian antitrust lawsuit Kevin McFall v. Canadian Real Estate Association, et al., Case No. T-119-24-ID 1 (Federal Court of Canada), filed on January 18, 2024. Management is currently unable to reasonably estimate the possible loss or range of possible loss for the Canadian antitrust litigation because, among other reasons, (i) the proceeding is in preliminary stages, (ii) specific damage amounts have not been sought, (iii) damages sought are, in our opinion, unsupported and/or exaggerated, (iv) there are significant factual issues to be resolved; or (v) there are novel legal issues or unsettled legal theories presented. For the Canadian antitrust litigation, we have not recorded any accruals as of December 31, 2024. While the Company does not expect such litigation to have a material adverse effect on our business, results of operations, cash flows or financial condition, due to the complexities inherent in such litigation, including the uncertainty of legal processes and potential developments in the cases, the ultimate liability may differ.

Derivative Litigation

Certain current and former directors and officers of the Company were named as defendants, and the Company was named as a nominal defendant, in a derivative lawsuit in the Court of Chancery of the State of Delaware, first filed on September 25, 2024, entitledLos Angeles City Employees’ Retirement System, on behalf of eXp World Holdings, Inc. v. Glenn Sanford, et. al.(C.A. No. 2024-0998-KSJM). The lawsuit alleges that certain current and former directors and officers breached fiduciary duties related to the Company’s response to reports of alleged sexual misconduct involving independent contractor real estate agents affiliated

with the Company’s subsidiaries and that certain defendants had improper compensation arrangements allowing them to profit from the Company’s revenue share program in connection therewith. The complaint seeks a court declaration of fiduciary duty breaches, disgorgement of profits, damages with interest, injunctive relief for improved oversight of sexual misconduct allegations, and reimbursement of plaintiffs' costs, including expert and attorney fees. Although the Company does not anticipate that the outcome of such litigation will have a material adverse effect on its business, results of operations, cash flows, or financial condition, the inherent complexities and uncertainties of legal proceedings may result in a liability that differs from current expectations. Management is currently unable to reasonably estimate the possible loss or range of possible loss for this matter because, among other reasons, (i) the proceeding is in preliminary stages, (ii) specific damage amounts have not been sought, (iii) there are significant factual issues to be resolved; or (iv) there are novel legal issues or unsettled legal theories presented.

Capital Maintenance Agreements

An indirect subsidiary and unconsolidated joint venture of the Company, SUCCESS Lending, is a party to Mortgage Warehouse Agreements and related ancillary agreements (the “Credit Agreements”) with JPMorgan Chase Bank and Texas Capital Bank, which each provide SUCCESS Lending with a revolving warehouse credit line of up to$25 million. It is customary for mortgage businesses like SUCCESS Lending to obtain warehouse credit lines in order to enable them to close and fund residential mortgage loans for subsequent sale to investors. SUCCESS Lending will use the borrowing capacity under the Credit Agreements exclusively for such purposes and borrowings will generally be repaid with the proceeds received from the sale of mortgage loans.

In connection with the Credit Agreements, the Company has entered into Capital Maintenance Agreements with each of JPMorgan Chase Bank and Texas Capital Bank whereby the Company agrees to provide certain funds necessary to ensure that SUCCESS Lending is at all times in compliance with its financial covenants under the Credit Agreements. The Company’s capital commitment liability under the Capital Maintenance Agreement with JPMorgan Chase Bank is limited to$2.0 million. The Company’s capital commitment liability under the Capital Maintenance Agreement with Texas Capital Bank is limited to$1.25 million. The Credit Agreements represent off-balance sheet arrangements for the Company.

15. DEFINED CONTRIBUTION SAVINGS PLAN

The Company offers a defined contribution savings plan to provide eligible employees with a retirement benefit that permits eligible employees the opportunity to actively participate in the process of building a personal retirement fund. The Company sponsors the defined contribution savings plan. The Company matches a portion of contributions made by participating employees. For the years ended December 31, 2024, 2023 and 2022, the Company's costs for contributions to this plan were$4,569,$4,763, and$4,720, respectively.

16. SUBSEQUENT EVENTS

Quarterly Cash Dividend

On February 14, 2025, our Board of Directors approved a cash dividend of$0.05 per common share expected to be paid on March 19, 2025 to stockholders of record on March 4, 2025.The ex-dividend date is expected to be on or around March 3, 2025. The dividend will be paid in cash.

Segment change

Subsequent to December 31, 2024, the Company’s CODM began managing the FrameVR.io business as part of the North American Realty segment. As a result, in the first quarter of 2025, the Company reclassified FrameVR.io from the Other Affiliated Services segment to the North American Realty segment to align with this change in management approach.