Earnings Fireside Chat via live stream in eXp Campus, our metaverse. My name is Courtney Chakarun, and I am the CMO of eXp World Holdings. Today, we will begin our Earnings Fireside Chat with opening comments and a conversation between Glenn Sanford, Founder, Chairman, and CEO of eXp World Holdings, and John Campbell, Managing Director at Stephens. We are happy to welcome John back as our moderator. Following this initial segment, we'll move into a presentation which includes a review of the Q1 2022 financial highlights, areas of investment presented by Jeff Whiteside, CFO and Chief Collaboration Officer of eXp World Holdings, followed by Jason Gesing, our CEO of eXp Realty, who will dive deeper into our differentiated model, agent growth, and value proposition. We will then return to John Campbell and our leadership team for a continuation of the Q&A.
Finally, I'll share details on our June 2022 eXp Shareholder Summit to bring our session to a conclusion. Let's review with the beginning of the forward-looking statements. There will be a number of forward-looking statements made today that should be considered in conjunction with the cautionary statements contained in the company's SEC filings. Forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from these statements. Please see our filings with the SEC, including our most recent quarterly report on Form 10-Q, for a discussion of specific risks that may affect our business, performance, and financial condition. We assume no obligation to update or revise any forward-looking statements or information. As a reminder, today's call is being recorded and a replay will also be made available on expworldholdings.com. Now, for those of you joining in eXp Campus today.
Should you have any questions here around the screens, you'll see three at the top. Hit the Stage Zoom button to the right of your chat box. To zoom to a specific screen, you can hit the plus icon above the screen. If you happen to see no slides or a gray slide, hit the refresh icon button at the top right-hand corner of that screen to correct. While in eXp Campus, should you need any help or have any questions, please put that in the chat box which you see below on the left, and a member of the team will contact you privately. As mentioned, the last segment of our Fireside Chat is a continuation of the Q&A, and here is a way that we're able to communicate and collaborate on some of these questions.
If you want to ask a question during the presentation, you can enter your question by scanning the QR code presented on the screen. You can go to the phone and go to Slido.com and type in the event code EXPI. From there, you can submit your question, and you can even vote up an existing question by giving it a thumbs up if you'd also like that question asked. This screen will remain up on the left-hand side of the stage. At this time, I would like to turn over the Fireside Chat to Glenn, our founder, to start the earnings conversation with opening remarks.
Hey, thank you, Courtney, and thanks everyone for attending. You know, this quarter was another strong quarter. Obviously it finished just over a month ago, but you know, 2022 is starting solid for us. You know, it's really driven to a large extent by our growth and our rapid expansion now into multiple countries. We've got really three different companies inside of eXp. We've got eXp Realty, which is the primary driver as most of you know of the growth engine of the company. But it is enabled by our Virbela Enterprise Metaverse platform.
We've been using this platform since 2016, bought the company in 2018, not knowing that the metaverse was gonna become a big play, starting in 2020, 2021 with the pandemic. Inside of Virbela, we've got another platform called FrameVR, which excited about that and certainly check it out at FrameVR.io. The other company is SUCCESS Enterprises, which is SUCCESS Magazine, SUCCESS Coaching, which is something we've now added to the SUCCESS Enterprises platform, SUCCESS Space, our co-working venture, which is continuing to gain speed, our speakers bureau and some other aspects. We're also starting to leverage the name into the real estate business with our SUCCESS Lending platform.
With that, you know, we're gonna talk a little bit mainly about eXp Realty since that's the big driver of the company. You know, the reality is that, you know, the eXp Realty business model was really built for any market, you know, up, down, sideways, what have you. Right now, we certainly are seeing a little bit of impact with higher interest rates. Inventory is actually lasting a little bit longer on the market than it was, say, the end of last year. We're really in a position to, you know, weather anything that might come at us, whether it be a continued fast-growing market or a potential contraction maybe later on this year or early next year.
We'll see obviously what happens, but we literally have built this with our, you know, enabling technology, Virbela. We've literally been able to grow to, you know, 21, you know, plus countries. Just announced a couple additional countries yesterday. I think that New Zealand's opening this week. It's pretty cool in terms of just the growth rate. Even though I think even NAR numbers have shown a little bit of a drop since the beginning of the year, we continue to grow our agent count, you know, month-over-month. We've never had a month in the history of the company where we've actually had the same amount or fewer agents than we had the month before. We've continued to see, you know, continued growth in our agent count.
Obviously, very growth driven. We continue to iterate on the agent value proposition. We use our Net Promoter Score as a guiding beacon for all the decisions that we make inside the company, and that really allows us to sort of not operate as much top-down, but more as a team, understanding that NPS is a big driver to our agent growth, which then ultimately translates to their end customers having a great experience at listing and selling homes. You know, the global network, 21 countries, you know, and counting. We'll certainly announce some additional countries, you know, next quarter. That network has been growing dramatically well in excess of 100% year-over-year growth in our global agent count.
We see a lot of opportunities as we continue to grow into multiple markets around the world. This was an exciting quarter as well. You may have seen in the press release that we called out, you know, the first billion-dollar revenue first quarter. First quarter tends to be a slow quarter in real estate relative to the rest of the year.
You know, with the company basically having been consistently profitable and cash flow positive almost from inception, but profitable on an EBITDA basis for the last three years and continued to increase that profitability over time, we really have this core that has this variable cost model associated with it that allows us to, you know, continue to be positive both on a cash flow and earnings basis, we feel for the foreseeable future. Obviously, don't know exactly what markets will bring to us, but we feel very confident in our ability to pivot and be agile as the markets go up or down. Fastest-growing, you know, one of the things we're...
Today, actually, we just accepted an award at the T3 Summit in San Antonio for being the fastest-growing brokerage according to their stats, and we've certainly had a number of those. Another stat that we recently learned about, in fact, at the same event, was in Houston, we're now the number one brokerage by agent count and number of listings in the Houston Association of Realtors, which is a pretty good indication of that we're actually breaking into large markets and becoming the number one player in a lot of markets around the country. There's a lot of smaller markets that we were already number one in, but it was interesting to just have that call-out by Bob Hale in the last 24 hours, just learning that particular stat.
I think this just continues to translate to the idea that we will be a major player across the U.S., Canada, and all the other countries. We're the fastest-growing brokerage in countries like the U.K. and Mexico and India and a number of other countries as well. It's really this agent value proposition. But the one that I'm really continue to be most proud of isn't as much the agent growth. I think the agent growth is a result of being just taking care of both our agents and our staff. Our Glassdoor scores were off the chain this last year. You may have noticed that we were actually in the top five large employers according to Glassdoor.
That, I think, is another leading indicator to our continued growth and excitement for the company. Could go over a lot more, but I'm gonna maybe turn it over to John Campbell just for any remarks and any and some initial Q&A before we turn it over to the rest of the team.
Yeah. Thanks, Glenn. It's great to be back in the virtual world again and hearing firsthand about the degree of success you guys just continue to see in the marketplace. I know I say this every time, but it just feels like it's such early innings for you guys. I think you're, you know, at a fraction of the penetration of total U.S. agents or of NAR agents. Seems like there's a lot of growth opportunity ahead for you guys. Obviously, you're performing well. The stock market is not treating you guys well. It's nothing EXPI specific. I think anything kind of housing related has been hit pretty hard. I mean, stocks obviously go up and down.
Investors rotate in and out of sectors, so it's not fun when you're on the flip side of it. You guys, you know, obviously keep doing your thing, and it's not gonna last forever. You know, obviously, on the investor side of the world, we tend to look at multiples when we make stock calls. You know, for those who are not in the weeds on the investor side, I mean, a multiple is nothing more than a gauge of sentiment. You guys are... we're basically finding the spread between the market value of the kind of enterprise as what's implied by the market price today. We divide that by the earnings expectation. Just sizing up basically what investors are willing to pay for your earnings.
You know, as it sits today, based on our projections for you guys, I think the stock's at about 9x forward EBITDA. That multiple reached about 60x early last year. You know, even since 2018, you've averaged 24x. You know, you put that historical average multiple of 24x on the stock today, it's a $40 EXPI price. That's well over double in value. Bigger picture, I think you'd be hard-pressed to find many companies out in the entire market today trading at this type of multiple, you know, with the disruptive characteristics that you guys have, kind of coupled with the top line in earnings growth. So all that to say, I think we see a lot of upside still in the EXPI price from here.
Just kind of need the investors to move away from the Chicken Little kind of sky is falling mindset. Enough on all that. Glenn, I just want to maybe start off with one question. Clearly, it's another good quarter for you guys, so let's just start off kind of with your high-level thoughts on how things shook out, how that kind of fared relative to your expectations, and what you'd point to as kind of the key fundamental drivers in the quarter.
Yeah. Well, one thing and we call this out in our press releases consistently, and we really do focus on our Net Promoter Score as being the future or the leading indicator to how we're doing. That KPI is still our rallying cry internally. It's when you know our NPS you know goes down in different areas, you know I think this last quarter or two, a lot of it was around Canada. We focused a lot of work on improving our NPS around a lot of Canadian activities. This you know in terms of
When we think about it, we think about it more as a what is our model going to produce if we continue to create a great experience for agents? We have to factor in a little bit of what the macroeconomics of the market are. I think macro-wise, we're seeing a little bit of slowdown. From our perspective, that meant we grew a little bit slower than maybe we expected, 'cause I don't think anybody expected interest rates to jump as dramatic as they did in a short period of time. We're starting to see that actually play out in our numbers a bit, and we're starting to see, you know, a little bit of that sort of internal slowdown.
Obviously our growth rate in terms of agent count continues to sort of propel us higher. That's kind of our mix around Q1. The other piece is that in the U.S. our growth rate is probably a little slower than we were expecting, and I think part of it is that NAR numbers actually dropped off in the first quarter or so in terms of number of agents who are active Realtors. We grew even though the number of agents who are Realtors actually reduced.
From our perspective, we feel really good about the numbers, but again, there's some macroeconomic factors that we're starting to see it actually play and we can sort of measurably see it against maybe some of our internal projections.
Yeah. That's a good rundown. Kind of sticking on the bigger picture. I mean, obviously there's a big fear factor around U.S. housing. Like I was mentioning earlier, multiples are essentially a gauge of sentiment. The multiples are implying a lot of these stocks that were going back to 1990 existing home sales levels. I don't think it's very surprising to hear a bit of a slowdown, obviously with rates moving as they have. Glenn, you know, I ask you this every time, but like, kind of just throw your crystal ball at us and give us your sense for where the market heads over the next several quarters.
Yeah. I've talked about this a little bit in you know a couple weeks ago at Inman. I was asked the same question by Brad Inman. You know with the Fed you know projecting additional increases in interest rates and the desire to cool down the housing market at the Fed level I think that does play into if they're serious we're definitely gonna see a slowdown in the market you know Q3 Q4. That's my sort of prediction. That going into next year. I think it's actually healthy for the market to slow down a bit. There's certainly from a home buyer perspective a lot of inventory.
There's still, you know, we're still hearing reports of many consumers that are in multi-offer situations and can't buy the home that they're looking for 'cause there might be 30 offers on that home. That number reduced a little bit, so now it might be 10 or 12 offers on a home. But it's not enough yet. We're in a balanced market. My guess is that the Fed's going to continue to raise interest rates a bit. We could, you know, go 6% plus in interest rates. We're not that far away from that now.
With that, certainly we've got, you know, the other macro factors, even things going on in Ukraine does create a lot of fear and uncertainty around what's going to happen and maybe that does sort of slow down the market as well when people maybe wanna preserve their cash or maybe not make a move at this point in time. That kind of plays on both sides of the equation.
Yeah. Makes sense. Just assuming, I mean, just as a hypothetical, the market kind of rolls over pretty hard later this year. You know, you guys have seen plenty of market swings. Obviously there hasn't been a dramatic down market, but you've seen the market swing around in 2014, you know, late 2018. You've performed well, you know, regardless of all that. I just wanna get your sense for how you think the eXp i model can kind of flex. Then also from a agent value proposition standpoint, you know, what kind of stands out from the eXp i standpoint if the market were to slow a bit?
Yeah. One of the things that I point to is the second quarter of 2020. You know, it wasn't a pleasant quarter. You know, it was a time when COVID had really fundamentally changed everything for a short period of time. You know, transaction volume was down across real estate industry, and yet we turned out our most profitable quarter to date in that Q2. The reason why was because we made the tough call. It wasn't a popular call. It was something that we you know we didn't know you know relative to residential real estate, if it was gonna be essential service, what was happening, all of that. We reduced the cost to operate such that we turned out our best quarter ever.
We were able to do it, you know, again, wasn't pleasant, not something I would look forward to doing again, but we are actually able to adjust our cost to operate very, very quickly in a down market. That was one where there was a real shock to the system, and yet we were able to turn out a very profitable quarter, which was really, in our mind at the time, a self-preservation decision, because, again, we didn't know what was gonna happen in Q3, Q4, and we thought, you know, this the market could be going off a little bit of a cliff for a period of time. That gives us that flexibility of, in a good market, we should do well.
In a bad market, we should capture market share and still do well, is the way that I look at it.
Yeah, makes sense. That's all the kinda high level questions I've got for right now. I think Jeff is gonna do the financial rundown, and I'll come back later with some more kinda in quarter and financial questions later.
Awesome. Hey, welcome, my good business partner, Jeff Whiteside. We've been working together since late 2018, I think. Anyway, it's been a while.
Yeah. Anyway, it's gonna be about four years, so.
Thank you very much, partner. Appreciate it.
All right. Well, thanks Glenn, thanks Courtney, and thank you John for moderating today. Good morning all, and thank you for joining our first quarter of 2022 virtual fireside chat. On behalf of the team, again, I'm really proud to share our results and highlights for Q1 2022. If we look at our first page, eXp World Holdings delivered another strong performance in the first quarter of 2022. You know, at a higher level, you know, growth in agent count, transaction volume, revenue, net income, and cash flow continues to be compelling. We continue to invest in our future, North America, international technology, commercial, affiliate service, and global agent success. We had zero debt on the balance sheet and the agility to adjust where needed.
You know, as Glenn just talked about, you know, we're built for good times, and we're built for tough times. We're feeling great about going into whatever comes at us. You know, we're leading change in the industry, and we've got the best leadership team. We're delivering exceptional shareholder value. If we go to the second page, which is at a highlight level, if you look at our financials and starting with revenue in Q1, our revenue was $1.01 billion, up 73% versus Q1 2021. Our gross profit in Q1 was $83.5 million, an increase of 56% year-over-year. Our Q1 net income was $8.9 million, an increase of 83% year-over-year.
As noted, our net income includes a $5.1 million income tax provision benefit, primarily driven by our stock-based compensation deduction. Q1, our diluted earnings per share was $0.06, and that's up 100% year-over-year. Our adjusted EBITDA in Q1 was $17.7 million. That's up 20% year-over-year. Lastly, our Q1 summary on our summary page, our operating cash flow was $62.2 million, an increase of 53% year-over-year. Now if we just look at our key metrics, those of you that have been with us for a while, the chart's broken into two categories, operating metrics and financial metrics.
Looking at our operating metrics for Q1, as a reminder, we run our business, as Glenn just mentioned, on agent and employee net promoter score. Our goal as a company is to keep that number above 70, which is really world-class, and we find it predicts our agent growth or retention and satisfied employees. You know, we're down slightly in the quarter, but we're above 70. We're at 71, 78. We're in the range that we wanna be. In our realty model, adding productive agents to our platform drives unit sales, volume revenue, and gross margin dollars. If you look at our agent count, we ended the quarter at 78,196. That's versus 50,333. We're at 55%.
Agent count was up 55%, a major growth in Florida, Texas, California, as well as an expansion globally. We recently announced 80,000 agents, and to give you a split, we're approximately 88% in the U.S. and 12% globally. Going down to the units, our units was 114,305. We're at 73,878. That's up 55%. Our price per unit was $362, up 9% year-over-year. Our volume in Q1 was $41.4 billion versus $24.5 billion, and that was up 69% year-over-year. Going to revenue, the revenue, as I mentioned before, was up 73%, primarily driven by increased agents and transactions in North America. We look at our gross margin dollars.
Our gross margin dollars is $83.5 versus $53.5, up 56%. Our gross margin grew $30 million based on, you know, increase in our transaction volume. Our gross margin percentage declined due primarily to higher-priced units and accelerated capping. If we look at our SG&A, our SG&A was $79.05 versus $48.6. It was up 63%. SG&A costs increased due to higher investments in FTE and growth support, international portfolio, technology, and affiliated services. As we look towards the next few lines here, we've kinda gone through the operating income and the net income. I'll just take you down to the bottom, which is our operating cash flow.
You can see the operating cash flow increased 53% from $62.2 million - $40.6 million. Our cash and cash equivalents, so the money we have in the bank after all our expenses and investments was at $130 million versus $108.2 million. That's, you know, great results from a key metric standpoint in the quarter. Now, if we look at some other Q1 investor highlights and milestones on the last page. In 2022, we achieved. This was the 10th quarter in a row that we achieved positive GAAP net income. Positive accumulated earnings and shareholder equity. We mentioned in the press release that we are paying our third...
We paid our third cash dividend in Q1 of 2022, and we announced another dividend for this quarter, which is expected to be paid on May 31st, 2022. Share buybacks, we repurchased about $30 million in common stock in Q1. The board approved an amendment to increase our stock repurchase program from $400 million - $500 million, and increase our monthly repurchase from $10 million of its common stock a month up to $20 million. We have incredible confidence in the company going forward. eXp Realty platform has now expanded to 21 global markets, as Glenn mentioned.
You know, Dominican Republic, Greece in the first quarter of 2022, and announced its plan to open three additional locations, including New Zealand, Chile, and Dubai, in the near-term future. Fantastic, strong quarter from our standpoint. We've delivered quarter after quarter and continuing. You know, we are really in a situation where we are in a position to take on whatever happens in the upcoming the headwinds. Now I'd like to go over to our CEO of eXp Realty, Jason Gesing, and he'll cover our innovative model, agent growth, and value proposition. Good morning, Jason.
Hey, good morning, Jeff. Good morning, everybody. Good morning, Glenn. Thank you, Courtney. Thank you, John. I always feel privileged to be up here. I'll just say, first, if I say nothing else, congratulations once again to our agents, brokers, and staff who really have made the results that we're recording today possible and have been doing it all along. You know, as Glenn mentioned in his remarks, eXp was built to thrive in all market conditions. In fact, Glenn founded the company, really during and in response to the Great Recession and designed the operating model to be flexible, to be adaptable, and to thrive in downturns and strong markets.
Where the growth opportunity exists in part is that we believe for some time that when the next down market arrives, we're in a very unique and strong position to grow as a company, but also to help brokerage owners who aren't in such a strong position remain in the business. They can eliminate fixed costs, grow into markets that would otherwise be unattainable to them without great risk and expense. They can really leverage their network and credibility to grow their own organizations while also providing new opportunities for the agents in the brokerage and others in the industry. What's really exciting to me at least about this long-held belief is that now today, we've got countless examples of brokerage owners who have joined us. They've migrated their agent base over completely. They've freed themselves from arduous supervisory obligations.
They've grown into new countries, new states. All the while, they're achieving greater levels of profitability and satisfaction. That's in a good market. We really believe that we are a logical and very appealing destination for brokerage owners going forward, when the market does turn. As you've also heard today, eXp continues to have a strong financial core with consistent positive cash flow and no long-term debt, which positions us well in these uncertain markets and which stands in contrast to many of our competitors who have mountains of debt and/or which have yet to reach profitability despite the strength of the market in 2020 and 2021. We believe this potentially limits their opportunity to invest in growth.
In contrast, ours is a flexible cost model, centered, as Glenn said, around the metaverse community, which now has more than 80,000 agents spread across the globe. It eliminates operating burden based on brick-and-mortar occupancy. Additionally, our positive cash flow means that we can continue to make smart investments that accelerate our growth. Specifically, a couple of examples, not limited to these. As hybrid and remote work continues to expand, we've launched eXp Relocation to provide expertise in U.S. and international employee relocation. Since inception last year, the program has thus far generated more than $425 million in pending and closed volume and has brought in more than 2,200 referrals.
What's notable about that is more than 900 of those 2,200 were made just this year, which we believe indicates the program's appeal as well as its momentum. Our iBuyer program, which we've covered in previous sessions, ExpressOffers, has a strong base with thousands of agents certified. We believe that as mortgage rates increase, there will be sellers in distress or under pressure and looking for options. We believe that ExpressOffers provides a cash option for this clientele with vetted third-party investors while keeping the agent at the center of the transaction without us acquiring a single piece of property or taking any balance sheet risk.
Additionally, we've launched a single global financial system that will improve our operational efficiency, increase internal controls, and support our quickly scaling global footprint, which is helpful and important, which, as you'll see on this slide coming up, we are one brokerage that's expanding globally. Our continued growth in part can be attributed to the compensation model in these countries, made possible by our utilization of the metaverse. It really allows us to build a strong, collaborative, environmentally friendly, and interpersonal community. Despite headwinds affecting the broader housing market, we're well positioned to capture increased market share. In a slower market, our model is highly attractive to agents due to the competitive commission structure and additional earning opportunities provided through equity, revenue share, and partner programs.
We saw this play out through COVID and post-COVID, including during the early stages of the pandemic when activity came to a halt. Domestically, we are the 2021 growth leader for agent count, sales volume, and transaction sides, and we continue to capture that momentum. Specifically, Glenn mentioned the T3 Sixty award this morning. Their real estate almanac has recently identified eXp Realty as the number one growth leader year-over-year in volume, transaction sides and agent count. In addition, RealTrends 500 recently identified us as the number one independent brokerage in the country. It's number one top mover in transactions, and it's number one top five-year mover in sales volume percentage. Globally, we continue to expand.
As folks have mentioned, we've got regional hubs in the EMEIA region, the Caribbean and Latin American region, and Asian Pacific, with coverage and operations now in all time zones. Also, with respect to our global efforts, we are today 42% above forecast for revenue and have increased agent growth 314% year-over-year as momentum continues to build in our new markets. As Jeff mentioned, international agent count now makes up about 12% of our total agents, up from 7%, a year ago. Our eXp Commercial business continues to focus on attracting top productive agents both in the U.S. and abroad. Their focus on productivity is resulting in strong increases in revenue, four-digit percentage increases year-over-year, triple-digit increases in transaction volume.
Looking ahead, we're really excited the commercial team is working to diversify their service offerings by strengthening their expertise to deliver great client service in a variety of commercial disciplines. Then, lastly, you know, I know you've heard it in prior calls, you heard it twice this morning, and you're gonna hear it again because it's that important to us, but we really do focus on value for the agent and utilize net promoter scores as the critical measure of our efforts to build and continuously iterate on the most agent-centric platform on the planet. Our NPS score of 71 ranks us among some of the best brands in the world, and as far as we can tell, well exceeds the industry average, which we believe is somewhere in the neighborhood of 30.
As the first cloud or metaverse-based brokerage in the world, we provide location and time freedom. We enable our agents to do their best work when and where they need to, while still providing great opportunities for collaboration, education, community, and connection in our vibrant campus, which we call eXp World. We offer robust compensation opportunities, not just in terms of caps and splits and low fees, equity and revenue share, but also with other offerings that are important to our agents, such as healthcare, true healthcare for agents. Today we've got over 4,100 agents enrolled in our healthcare offering. Total enrollment, which includes partners, spouses, and children, is up around 12,000.
Healthcare for agents has been a chronic challenge for the industry, and we're pleased to have arrived at a solution because as an agent, if you're worried about your health, then you can't focus on your business. Finally, we foster a culture of community through various initiatives, including our ever-growing ONE eXp Diversity and Inclusion Initiative and our ICON Agent Program. On the staff side, our employee NPS scores continue to be very strong. It's our fifth straight consecutive year being listed on the Glassdoor Best Places to Work rankings for large companies. Today we're at number four and ahead of many well-known household brands and names. John, let's back over to you, but thank you once again for letting me participate. Thank you.
Yeah. Thanks, Jason. Getting back into the Q&A here, let's start back off with one of the positive developments that kind of jumped out from the press release. Glenn, you guys upped your buyback authorization. You know, as you just mentioned, you doubled the pace or you're doubling the pace of monthly buybacks. Talk to us about what drove this decision from the board level.
Yeah. There are a couple of things. One, our stock buyback was limited to $10 million a month, which is actually why we accumulated more cash on the balance sheet, you know, so we bought back $30 million. What we have with the board is an agreement to maintain $100 million in cash on the books because we feel that for us is an adequate amount of cash in order to run the brokerage. For us, it really was around, you know, creating an opportunity to buy back more.
Obviously, it's not gonna be a one-month situation and given our growth rate and continuing cash flow, you know, we may need to increase that at some point in the future again in order to get us back to that $100 million cash balance. That's kind of where we're what we're kind of focused on is what's the appropriate speed.
We just wanted to also show that, you know, our commitment has been to one, offset any dilution in the stock relative to our equity programs, and in some respects, be able to actually reduce that and bring it back to, you know, prior period levels in terms of just the number of shares issued, outstanding and, you know, on a fully diluted basis, et cetera.
Yeah, makes sense. I mean, I think you saw a 20% increase in the cash balance sequentially. So you are sitting with a really good balance sheet. Obviously, it's not fun to have your multiple under pressure in the public markets, but you know, on the flip side of that, on the M&A side of things, I mean, you can typically get some stuff at, I think, pretty attractive multiples. I don't know how much this has trickled into the private markets. They're probably holding up better than what the public markets are. Give us your thoughts about M&A. That hasn't been a huge focus of your story, but just give us your latest thoughts on that.
So Kyle Kittleson, you know, heads up our M&A opportunities inside the company, and he vets multiple opportunities certainly on a monthly basis, and sometimes we'll see different opportunities even on a weekly basis. We really look at a couple things. One, synergy and culture. You know, 80% of the time that M&A is done, it doesn't work because there's a cultural component that maybe doesn't fit. We really are looking at both of those from an M&A perspective. We've got, you know, various different things we're looking at. We expect that we'll have some announcements around M&A in the next few months.
Not any huge M&A that's currently in the works, but certainly some small, you know, projects that we'll pull in. We really are, you know, as I will say, housing stocks in general are under pressure, we think there's gonna be some opportunities to pick up some things at some reasonable valuations. They were a little crazy in the last couple of years and so we'll look opportunistically to see what we can fold in if it makes sense both financially and culturally.
Yeah, makes sense. Maybe one for Jeff here. On gross margins, obviously that's been a pretty big focus for investors over the last, you know, two or three years. Still a little bit of pressure year-over-year. I think almost all that's just capped, but you've grown it sequentially, you know, for the second straight quarter. Before we kinda get in the moving parts there, just thinking about the full year gross margins, just help us out on this, if you can. If we were to assume that the average commission per agent kinda stayed the same, would that. With greater revenue growth, would you be able to see some gross margin expansion? Would it kind of be flattish year-over-year? Just lay it out there.
Yeah, John. You know, one of the biggest things that we found, and it's kind of obvious, but it's the price of the units. As the housing prices have increased, we've seen our gross margins. You know, I mean, if you look historically, we're around, on average, somewhere around the 8.5%-ish, 8.4%-ish across, you know, since 2018. I mean, if we see the business, as Glenn kind of pointed out, coming down and the volume coming down towards the end of the year, we say, you know, that will actually support the percentage. But as you know, as I mentioned before, I mean, what we really focus on is we focus on the gross margin dollars that are coming into the business.
That's, you know, where we make our investments from. I'd say, you know, historically, you know, they're in the low 8% and, you know, we were at 8.3% in the quarter. You know, depending on what happens to the housing market, the prices, if the prices do stabilize or come down and the volume comes down, the gross margin percentage will go up. You know, we still have a pretty healthy, a very healthy actually gross margin dollar return on the business.
Yeah, makes sense. I think on the investor side, we tend to focus too much on percentages and
Yeah, I think so. I mean, yeah. You can see, I mean, you know, the percentages, you know, obviously we're getting market share, right? That's a big deal for us, and investing in the future is a huge deal for us. You know, we're really looking at that dollar figure, and that dollar figure, it, you know, it's grown substantially every quarter.
Yeah. Percentages do not pay the bills, that's for sure. Okay. Longer term, do you see a pathway back to, you know, kind of low double-digit margins or gross margins? You know, you guys have done that in the past, but I don't know how much of an impact from ancillary services. That's actually one of the questions from Slido here, but just talk about kind of the impact of ancillary services and what that can do for gross margins.
You know, I mean, as I said before, I mean, our gross margin percentage has historically been in kind of the lower eight s. You know, I do believe that we all believe that there's a big opportunity for us in affiliated services, in things like, you know, other related business like transaction coordination, high-quality lead generation, healthcare, mortgage, title, escrow. From what I've seen, there's a point or two over the long term that we can add to this business. You know, once we get, you know, you can see the numbers, you know. We finished last year with a very high revenue number, and that continues to grow.
We think the opportunity there is 1%-2% in the long term to add to the operating margin.
Yeah. Makes sense. Shifting gears to the OpEx, you know, operating expense side of the business. I guess just first, can you give us an update on what the variable kind of versus fixed mix looks like today?
Yeah. I think most of our expenses are in supporting the brokerage. All right? That's those are kind of variable expenses or we have a lot of variable expenses. A huge piece of our expense is the growth of the business, and that comes in the form of revenue share. As the business goes down, obviously that goes down too. That's an automatic buffer on cost. We do have the ability, as Glenn mentioned before, when we had to react in 2020, not something we need to do, but from a percentage of...
You know, I'd say the majority of our costs are variable costs in our business that we can take action on if we have to. At the same time, we're working extremely hard across the business to increase our revenue in, you know, areas like international, areas like commercial, areas like affiliated services. That's our main focus right now is investing for growth. You know, when we get to the other side of this, we think we're gonna be in great shape, both in the real estate business and also along the affiliated services lines.
Yeah, it's a good rundown. You know, one of the things we do just to try to get a sense, because as you mentioned, I think the fixed cost side of the model is a low% of the kinda cost base, but there is a little bit of a leverage potential there, right? You guys, you know, we've looked at it typically on a fixed cost basis per agent. How much fixed cost is it required to support, you know, on a per agent basis. That. You were getting leverage on that for several years, and then over the last probably year and a half, it's kinda going the other way a little bit.
It seems like that a lot of this investment, you kinda called some of this out, but maybe walk through some of those investment areas and why, you know, why the spin there has been a little bit faster than the revenue growth.
Yeah. I mean, one thing I would say is that the, you know, the technology investment that we're taking on now and we've been taking on for the last couple years is all about getting more productivity across our business, so that SG&A, that direct SG&A cost to support the brokerage will go down. Glenn, maybe a couple comments from your side in terms of the productivity and technology that we're working on across the business.
We're definitely, you know, doing a fair bit of what we refer to as R&D to improve the transaction workflow process. We've been making some investments around how to make the transaction workflow easier for the agent and also for internal staff. That's been some investments. We're also, you know, investing heavily in the portal with, you know, Showcase IDX building out exprealty.com CA. International, you know, we wanna get to as many countries as we can as quickly as we can, recognizing that it takes a little bit of time before they get to a positive cash flow.
We've already got to positive cash flow in a number of countries that we've expanded to because of our low cost to operate. We still wanna continue to keep our foot on the gas to get to those countries, you know, learn what we're going to learn, entering those new countries as quickly as we can so we can make the pivots and adjustments so we can become, you know, major players. We think that, you know, those are the investments and that will pay dividends in future years especially. Like, we're really not focused so much on our, we'll call our short-run results.
We're really focused on how do we actually achieve the aspirational goals of you know reaching you know 500,000 agents in five years. That just takes you know continual investment because we think you know long term you know five years 10 years how do we truly become the largest most agent-centric real estate brokerage on the planet? That's really our big driver. Short term we'll maybe get the stock to do something you know in the quarter. The long-term stuff is the stuff that really creates you know the generational growth engine that will propel eXp well into the future. That's really where we continue to focus.
I know that you, in your role, may look a little bit at the short term as a predictor. We really focus on sort of that long run view and what are the things that we need to put in place, and how do we make those investments so that, you know, 5 years, 10 years from now, we're a super dominant player.
Yeah. Makes sense. I mean, I feel like that's the delicate dance with Wall Street, obviously. Investing for the long term while showing near-term results, it's just a balancing act for sure. You know, I wanna hit you with one question. Don't mean for this to at all to be a zinger, but this is a question we get, you know, quite often from investors. I've seen it in the chat box here, someone's asking about it. Glenn, I believe you've got a standard kinda 10b5-1 plan, you know, just dribbling out some of the shares. You know, how do you respond to the question, why sell here?
Yeah. I'd prefer actually not to really be selling, but I have options that were set in 2012 that expire this year. Ironically, I made the mistake because I was very optimistic around the stock last year, so I took down about half of those options at a higher price. It was a big taxable event for me. You know, big portion of that sale, those sales were literally to pay the taxes, which were something akin to $16 something million that came from just an exercise. You know, trying to rebuild a little bit of just my own personal cash reserves for me personally. That's been.
I did it as a, I think, 9,000 shares a day, because it was a really small amount as opposed to just doing one big whack of options, exercise and sale. That was really kind of the idea. Not sure I would do it exactly the same way in the future, but that 10b5-1 plan is in place through, I think, September and it, you know, technically, the current one has a floor price of $15 a share. If it's below 15, I'm not selling, so, you know, that may create a different scenario if for some reason, you know, the stock continues to be under pressure, you know, later on the year. But that was really the whole idea.
You know, I still obviously control and own, you know, a big whack of stock beyond that. That's really my core holdings. This is all around just stock options that expire later this year.
Yeah, makes sense. There was a question in Slido. I'm also myself curious about this. Talk to us about SUCCESS Lending, the number of loan officers, kinda how far off the ground you've gotten that thus far, and when you really expect it to start contributing.
Yeah. You know, it's actually got some green shoots. You know, it's our third move into mortgage. We've got 31+ loan officers in a few different states. Started in Illinois. I think we've got some in Denver, got some in Arizona. We're really building out the network of loan officers. There were approximately 30 transactions done, you know, each of the last couple months, kind of working out the kinks in the system. You know, the Kind Lending, which a lot of the Stearns Lending team is now part of Kind Lending and also part of the JV. They've been really working diligently to create a really good process for our consumers and our agents.
It's getting some momentum. You know, it's not huge yet, but one of the neat parts of our model versus other lenders is that ours is almost exclusively purchase-based business. We're not relying on any refinance, which there is virtually no refinance going on in mortgage right now. You know, we're in a really good position to start to build that and then also, you know, eventually have our own, you know, more retail-oriented SUCCESS Lending branches. We're really approaching it as a kind of a unique joint venture in that it's not exclusively eXp Realty-generated business. These loan officers are bringing in their own book of business.
Glenn Stearns has made the statement that he'd like to see 50% of the loan volume actually come from non-eXp related sources. He's been really following that path and building up the pipeline of business from those loan officers and, you know, that he's done this before and this, I think, is the one that the Kind Lending team, and Glenn Stearns especially, has his heart really into. I feel like it's going in the right direction. I would say, you know, later on this year, third quarter, fourth quarter, I think we'll actually start to have measurable results start to show up on our financials.
Okay. Great to hear. I've got one last kinda two-part question here. Big picture, and this is my last question on my side. First, you know, you crossed $1 billion of quarterly revenue last year. That was a pretty big event for you guys. You've now strung together three straight quarters of over $1 billion, including one Q that is seasonally weaker. You guys are on a really good path, but medium term, nearer term, whatever you think, when is the next milestone, the $2 billion of revenue? When do you think you can cross that? And then the second part of that is, you know, you guys have talked to the 500,000 agents in five years, let's just get your latest view on that, kinda the vision on that front.
Yeah. I'm my best guess at the moment is that, you know, 2023 we'll have our first $2 billion quarter. I mean, it's possible that it could happen this year, but certainly we've got some macro headwinds and other things. 2023 is kinda my first, you know, where I see a reasonable shot at that $2 billion in revenue in a quarter. You know, the 500,000 agents in five years. Again, I call it aspirational. I do believe there's a little bit of aspiration to it in terms of the timeframe, but I think the number is an achievable number over time. I think that we will eventually be, you know, 500,000 agents.
You know, international is gonna, again, be great part of our market. We love to have internal rallying cries, and we love to have these internal sort of, like, where could we be if we continue to really focus on the agent value proposition and being sort of the most agent-centric real estate brokerage on the planet. We just think that if we do a great job, it's almost the Field of Dreams. If we build it, they will come.
We just continue to work on building the best real estate brokerage on the planet, being, you know, super focused on, you know, Net Promoter Score and as a result that, you know, that translates into all the other benefits of a well-run organization, which eventually I think translates into some really solid agent count over time.
Yeah, absolutely. I lied. I've got one more I'm gonna squeeze in here. It's actually come in the chat box, and it's a question I was meaning to ask you earlier. This is actually for, probably for Jeff here, but, on the tax benefits, you know, you've released valuation allowances a couple times. Just touch on those. Just touch on, you know, the sustainability of that. It's coming directly from the share issuance and that should be expected over time.
Yeah. I mean, it's hard, as you probably know, John, to predict. We saw it in our numbers last year, and really what it is, it's the fact that we've sustainably generated net income over a long period of time. We're now able to take a benefit on the compensation tax deduction. So it's a function of that cost, and it's a function of the stock price. You know, I've had this question come up. I mean, it should repeat over the foreseeable future, but we really can't even calculate that until we get to the end of the quarter and find out where the stock price goes, what that cost is.
You know, it's been consistently hitting our books for probably like the last three, four quarters. You know, we see it continuing. At what level, we're not sure based on those two variables I just mentioned. You know, it's just a positive thing for our company that we've been positive net income for so long, we can now take benefits like this compensation tax deduction. That's all I can say right now. It's not something we can calculate or predict, but it is something that should continue to some extent going forward in the near term.
Absolutely. Well, that was a great rundown, and I appreciate you guys giving me the opportunity to join you again in the virtual world, especially on the heels of such a great quarter. Thanks for the time.
Awesome.
Thank you, Tom. Appreciate it.
Courtney Chakarun, our Chief Marketing Officer is going to wrap up this earnings call.
Thank you, Glenn. A reminder, we have our annual eXp Shareholder Summit next month. This event is hosted in Orlando, Florida. It's June 19 through the 21st. You can actually look if you are in eXp Campus on either side, see the agenda. You can also see in this presentation a QR code as well as going to our expshareholdersummit.com. This year's event is gonna showcase company highlights, official business for our shareholders, our leadership, industry-leading agents, which I see here today, sharing successes and special guest features. With that, we also have a virtual opportunity to view the general session in eXp Campus. That's where we are today, and a live stream link that will be made available on our homepage, expworldholdings.com. Thank you for joining us today. This concludes the eXp World Holdings 2022 Q1 Earnings Fireside Chat.