And as you can see, we continue to invest in International Realty. It is our big growth area of the Company. Virbela’s revenue is down 8% year-to-date compared to the same period of 2022, but has improved its EBITDA loss by about 56% year-over-year. And revenue in the other segments is up 13% to date to $3.7 million. And our adjusted EBITDA was down 29% to — a loss of $2.8 million adjusted EBITDA as we invest in these programs to drive our growth. Now, on the next and the final slide before we get to questions, we’ll look at our agent revenue growth over a rolling five-year period. And as you can see, we’ve had extraordinary growth for the first four years. It’s been a very tough market for everybody, but as you can see from the chart, we’re starting to come back up.
And historically, we’ve grown at a much higher rate, but even in our recent market conditions impacting revenue, we’ve continued to increase eXp’s agent count, which grew 5% as I mentioned before. So overall, a strong quarter for us in a very tough environment. And with that, I’ll turn it back to Denise for Q&A.
A – Denise Garcia: Thanks, Jeff. I’ll kick off with a question for Glenn before we open the call to our covering analysts. First, Glenn, can you share your initial reaction to the ruling on the sides of Burnett lawsuit that was announced on Tuesday?
Glenn Sanford: Yes. Well, it’s been certainly a big part of everything that’s going on in terms of just conversations in the real estate industry. It’s one that we’re still kind of processing, just understanding the initial ruling. Of course, we built as a unique business model starting in 2014 — or 2009. We’re now about 14 years old. Kind of grew up in a unique industry. I actually started out as a buyer’s agent for my first five years in the business, which is kind of interesting, because I see buyer agency as being a very valuable tool for buyers. And I’m concerned, quite frankly about what this might mean to buyers who may not be able to afford representation, if things change up too much. So, it’s definitely something that’s top of mind because I believed in buyer agency for all of my career in the industry.
However, obviously a very competitive industry, there is always things going on. There is always disruptions and things are always changing. So at the end of the day, we are about really two things, we are about real estate agents being able to build rewarding careers in this industry of real estate, we want to make sure that we continue to provide the relevant tools, systems, training, coaching, what have you, and we couldn’t do this without representing consumers on both the list side and the buy side at the best of our abilities and to figure out how to do that. So now that’s really where our focus is. And obviously, it’s too soon to sort of comment on how we are going to navigate. I feel like we’ve been operating in a very, highly — with high integrity in this industry, and we will continue to do so.
And so now it is just a matter of seeing what next steps are in this business of real estate.
Denise Garcia: Great. Okay. Thank you. And so, I’ll go to the analysts. I think, Matt Filek, you had a question from William Blair.
Matt Filek: Hey Glenn, Jeff, and Leo, you have Matt Filek on for Stephen Sheldon. Thank you for taking my questions. I wanted to start with one on gross profit. Gross profit and gross margins came in a little lighter than we had expected. And I was wondering if you could expand on the driving factors behind that along with how we should be thinking about gross margins looking ahead.
Jeff Whiteside: So, it was a little lower than we forecasted. But one of the things that happened in the quarter was we accelerated some of our icon awards. And basically, that’s going to be more of a onetime event that brought that percentage down, down to the 6.9%. So we were anticipating a little higher margin. I mean, we had about 7.5% last year at this point in time. And we think it is a one-time event to bring that percentage down, and we see it going back up in the fourth quarter into the 7.5% plus. That’s what we are forecasting as we sit here today.
Matt Filek: Okay. Got it. That’s very helpful. And then one more quick one on modeling. I think in the past, you had talked about an $85 million run rate for SG&A, came in a little lighter than that. Should we expect that to be consistent going forward or how should we be thinking about that line item looking ahead?
Jeff Whiteside: Yes. I think the number is a little light, in a good way for us, in the quarter. I think what we see in Q4, we always book our EXPCON expenses, which is our biggest event of the year. That number is going to go a little higher in the fourth quarter. But on a run rate basis, that $85 million is a relatively safe number to be seeing on a run rate basis.
Matt Filek: Perfect. Thank you, Jeff. And one more, if I may. I wanted to quickly ask about the recently announced partnership with HomeHunter. Can you talk about what that partnership entails, how HomeHunter is different than other search portals? And then, as a second part, do you plan on bringing the capabilities of HomeHunter to the United States at some point?
Glenn Sanford: Yes. So great question. Your HomeHunter, so to kind of describe the challenge in most all markets outside the U.S. and Canada, there isn’t an MLS type relationship. Obviously, this is front of mind for everybody this week especially because of some of the stuff that’s come down from a legal perspective, but which makes it really fragmented in these other countries. You’re looking at countries where agents have to pay very significant advertising fees to advertise on multiple real estate websites to make sure that their properties get seen by the largest number of consumers. And it’s a whole bunch of pay to play just to get your properties out there. For the consumer, it’s really challenging. Because if you don’t see all of the websites that have all of the properties, then you’re not — you may miss out on the property that really was the one that was most ideal for you and your situation.
And so, what HomeHunter is it provides — it’s a browser extension tool for consumers to actually organize across multiple portals in multiple markets and actually save and organize their searches, share their searches, share their searches with other agents. And so it’s really around making these searches a lot easier for local consumers. Now we’ve done some initial focus groups primarily with our agents in different markets. And what we’re hearing is that this is a tool that’s sorely needed for consumers and even agents to understand inventory that exists across multiple marketplaces. It wouldn’t really — because the U.S. and Canada, who knows what happens in the future, but currently most all properties are available from virtually every website in the country.
So, there’s really not a need for a tool like this in the U.S. and Canada. But you definitely need to have a tool like this internationally. And when I saw this demonstrated a number of years ago at Inman, I recognized that it wasn’t great for the U.S. and Canada at this time, but as we started to look at the pain points internationally, it made total sense. And they’ve invested a lot into it for the domestic market, but we think it’s going to really be a great tool for consumers in the international markets.
Denise Garcia: Our next question comes from Soham Bhonsle from BTIG. Go ahead.
Soham Bhonsle: Good afternoon, everyone. Can you hear me?
Denise Garcia: Yes, we can hear you.
Soham Bhonsle: Thanks for taking the questions. Maybe just a housekeeping one to start. Can we maybe get your mix of buy side versus sell side transactions historically, if you have that, just even a ballpark range?
Glenn Sanford: So, we’re a little bit skewed to the sell side. Jeff can probably give you a little — he might have better data, but you can think about as 65 or — yes, 55% to 60% being list side and then the balance being buy side.
Jeff Whiteside: Yes. That’s about right.
