Real estate technology company eXp World (NASDAQ: EXPI) announced better-than-expected revenue in Q2 CY2025, with sales up 1.1% year on year to $1.31 billion. Its GAAP loss of $0.01 per share was significantly below analysts’ consensus estimates.

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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

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Thankfully, eXp World’s 31.2% annualized revenue growth over the last five years was incredible. 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 3.9% over the last two years was well below its five-year trend.

This quarter, eXp World reported modest year-on-year revenue growth of 1.1% but beat Wall Street’s estimates by 0.6%.

Looking ahead, sell-side analysts expect revenue to grow 2.4% over the next 12 months, a slight deceleration versus the last two years. This projection doesn't excite us and suggests its products and services will see some demand headwinds.

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Operating Margin

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 generated a negative 0.2% operating margin.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Sadly for eXp World, its EPS declined by 40.8% annually over the last five years while its revenue grew by 31.2%. This tells us the company became less profitable on a per-share basis as it expanded.

In Q2, eXp World reported EPS at negative $0.01, down from $0.08 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street is optimistic. Analysts forecast eXp World’s full-year EPS of negative $0.20 will reach break even.

Key Takeaways from eXp World’s Q2 Results

We struggled to find many positives in these results as its EBITDA and EPS fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 4% to $10.30 immediately following the results.

eXp World didn’t show it’s best hand this quarter, but does that create an opportunity to buy the stock right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.