Real estate technology company eXp World (NASDAQ: EXPI) announced better-than-expected revenue in Q3 CY2025, with sales up 6.9% year on year to $1.32 billion. Its GAAP profit of $0.02 per share was in line with analysts’ consensus estimates.
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eXp World (EXPI) Q3 CY2025 Highlights:
- Revenue: $1.32 billion vs analyst estimates of $1.24 billion (6.9% year-on-year growth, 5.9% beat)
- EPS (GAAP): $0.02 vs analyst estimates of $0.02 (in line)
- Adjusted EBITDA: $17.71 million vs analyst estimates of $16.25 million (1.3% margin, 9% beat)
- Operating Margin: 0.3%, in line with the same quarter last year
- Free Cash Flow Margin: 2%, down from 3.6% in the same quarter last year
- Market Capitalization: $1.58 billion
Company Overview
Founded in 2009, eXp World (NASDAQ: EXPI) is a real estate company known for its virtual, cloud-based approach to real estate brokerage.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Luckily, eXp World’s sales grew at an excellent 26.2% compounded annual growth rate over the last five years. Its growth beat the average consumer discretionary company and shows its offerings resonate with customers.
Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. eXp World’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 5.2% over the last two years was well below its five-year trend. 
This quarter, eXp World reported year-on-year revenue growth of 6.9%, and its $1.32 billion of revenue exceeded Wall Street’s estimates by 5.9%.
Looking ahead, sell-side analysts expect revenue to grow 2.9% over the next 12 months, a slight deceleration versus the last two years. This projection doesn't excite us and indicates its products and services will see some demand headwinds.
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Operating Margin
Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.
eXp World’s operating margin might fluctuated slightly over the last 12 months but has remained more or less the same. The company broke even over the last two years, inadequate for a consumer discretionary business. Its large expense base and inefficient cost structure were the main culprits behind this performance.
This quarter, eXp World’s breakeven margin was in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
Sadly for eXp World, its EPS declined by 22% annually over the last five years while its revenue grew by 26.2%. This tells us the company became less profitable on a per-share basis as it expanded.
In Q3, eXp World reported EPS of $0.02, up from negative $0.06 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street is optimistic. Analysts forecast eXp World’s full-year EPS of negative $0.12 will flip to positive $0.07.
Key Takeaways from eXp World’s Q3 Results
It was encouraging to see eXp World meet analysts’ EPS expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. Zooming out, we think this quarter featured some important positives. The stock traded up 4% to $10.09 immediately after reporting.
Sure, eXp World had a solid quarter, but if we look at the bigger picture, is this stock a buy? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
