eXp World Holdings, Inc. (EXPI) on Q4 2021 Results - Earnings Call Transcript
Courtney Chakarun: Tom, we're happy to have you back as our moderator. In this initial segment, we will be talking and moving into a presentation. That is a review of the 2021 financial highlights presented by Jeff White, CFO and Chief Collaboration Officer of -eXp World Holdings; followed by Jason Gesing, our CEO of eXp Realty, who will share our accelerated growth as well as operational excellence and agent-employee satisfaction. Finally, we returned to Tom White and our leadership team for a Q&A. Let's begin the earnings fireside chat with a review 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 our actual results to differ materially from these statements. Please see our filings with the SEC, including our most recent quarterly report on Form 10-K 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 a few logistics and we’ll get started. For those of you on the eXp World, did you wish to see all three screens, hit the stage zoom button to the right of your chat box to zoom to a specific a screen, you can hit the plus icon button above that screen. If you happen to see no slides or a gray slide hit the refresh icon at the top of the right hand corner of that screen to correct. While in eXp campus, should you need any help or have questions, please enter your comments in the chat box at the bottom on the left and a member of the team will contact you. As mentioned the last segment of our fireside chat is a Q&A. We want to talk quickly about Slideo, to ask a question during our presentation, you can enter questions by scanning the QR code presented on the screen with your phone, or go to slideo.com and type in the event code, EXPI. From there, you can submit a question or vote up an existing question by giving a thumbs up. If you also like that question ask the screen will remain up on the left hand side of the stage. At this time, I would like to turn the fireside chat over to Glenn Sanford and Tom White to start the earnings conversation.
Glenn Sanford: Hey, Tom, are you are you there?
Tom White: Yeah, I'm here, Glenn. Do you want me to get kick things off here?
Glenn Sanford: Yeah, why don't you go ahead and kick things off.
Tom White: Terrific, great. Good morning, everyone. Thanks for joining us. And thanks to the folks at EXPI for inviting me to host. I'm a research analyst at D.A. Davidson. I cover disruptive companies in the residential real estate space. And I've had the pleasure of covering eXp World Holdings since early 2018. I'm going to ask a question here of Glenn to get things going and then we'll go through a couple of presentations from Jeff and Jason. And then we'll circle back and, and do some more Q&A. But I guess first off, Glenn, congrats on a really strong end to the year. Maybe just comment on your high level thoughts about how you thought the business performed last year, how you've managed to sustain the growth that you've put up, and really manage your overall growth rate, would just be curious to hear your high level thoughts?
Glenn Sanford: Thanks Tom for being here. It's been -- you've been following us for quite some time. And it's been a fun journey so far. It's, one, I kind of describe, pay attention to just a couple little stats. I know Jason's going to cover a bit of this in his section. But -- we just went over 76,000 agents, so we were continuing to grow at a very rapid rate. In fact, another interesting stat is that as of now in the United States, 125 real tours, the United States is actually an eXp agent. So we've obviously grown very fast. But I think the key for our growth is really around being truly mission driven. That's been kind of our -- I don't want to call our secret sauce, but it really is the driver for growth. We're continuing to be the most agent centric real estate brokerage on the planet. And that's really how we approach everything. We're approaching it. How do we truly build the market share and turning this industry into -- an industry that's really agent lead and an agent driven in that, we want to provide the best opportunity for agents and brokers. And we also enhancing that already exciting value proposition for agents, something you'll hear a bit about later on this year. And even now is, how we're enhancing even our revenue share program, our revenue share program pays out 50% of our company dollar. And we're actually enhancing that with profits from our affiliated company services to actually pay out more than 50% of company dollar in 2022, to our agents and brokers who helped us grow. And even in 2021, we shared almost $170 million in revenue share, and actually shared approximately $50 million in equity to our productive agents outside of them electing to receive equity and in lieu of commission that's actually awards to our agents. So we actually paid out in approximately $220 million in additional benefits over and above the normal production of agents, which really dwarfs any other brokerage or brand that shares with their agents and brokers. So we've -- we shared out more than anyone else. And in 2022, we expect to share more than anyone else on our rev share side by itself in 2022, than any other brokers that shares that their agents. So we're really excited about continuing to extend those benefits. And that really has been a big driver for our agent attraction and growth. We want to also help our agents with productivity and the partnerships, and then also adding more competitive modes. I think last but not least, before turning over to Jeff for more of the financials, is really around just continuing to be agile, re-imagining how a brokerage works at 500,000 agents versus where we are now. And just figuring out what the philosophy is for supporting agents, while providing them a higher touch experience over time with our staff, that's probably our biggest thing being a cloud-based brokerage and we use NPS really as a big driver for decision making, I think one of the places where we'll spend a lot of time in 2022 is just figuring out how to be an even higher touch brokerage for the agents and brokers that join us all over the world. So, super excited about that. With that, why don't I go ahead and turn it over to Jeff and to talk a little bit about some of our financials.
Jeff White: Awesome. All right. Well, thank you very much, Glenn. Courtney, really appreciate it. Thank you, Tom for moderating today. Good morning all and thanks for joining us at our fourth quarter 2021 virtual fireside chat. The EXPI had another phenomenal quarter in the fourth quarter 2021 and full year 2021 of growth. And I'm proud on behalf of our team to share results today. And we'll be talking about the fourth quarter and the full year 2021. So on our first page, at a highlight level, starting with the revenue in Q4, our revenue was $1.1 billion of 77% year over year. Our gross profit in Q4 was $83.1 million, an increase of 65% year over year. And our net income in Q4 was $15.5 million, which was an increase of 101% year over year. As noted, it includes $14.2 million income tax provision benefits primarily driven by our stock based compensation deduction and the fact that we shown sustainable profitability. So from a diluted share standpoint, earnings per share was $0.10 and that was up 100% year over year. Now, if I look at the adjusted EBITDA and so there is a bit of a difference this quarter on adjusted EBITDA, so the adjusted EBITDA, as reported, it was $13.1 million, which was down 21%. But we did have a one time legal settlement cost that we booked in Q4 and that was $10 million. So after that adjustment, our adjusted EBITDA would be at $23.1 million, which was up to 39%. And lastly, on the fourth quarter, summary page our property cash flow was $48.5 million and increase 59% year over year, quarter over quarter. So now just go back into the same highlights for the full year of 2021, starting again with revenue. And our revenue for the full year was $3.8 billion, which was 110% over year. A gross profit in 2021 was $296 million. And that's an increase of 85% year over year. Net income was $81.2 million in 2021, an increase of 162. And as noted again, we do have a tax benefit in that number and in $81.2, there's a tax benefit of $47.5 million. Again, primarily a benefit from our stock based compensation deduction. In the full year are diluted earnings per share was $0.51, which is 143% year over year. Just hold on that last chart, please. The full year numbers. And then our adjusted EBITDA was $78 million, up 35%. And then if you would back that 10 million 1 time extraordinary charge or adjusted EBITDA for the year will be $88 million, up 52% year over year. And finally, our full year property cash flow was $247 million and that's an increase of 106% year over year. Now, I'll just go over some of the highlights when we look at our business. We have two different sections. These are our key metrics. And in the chart, charts broken up into two categories. One is the operating metrics and one is the financial metrics. So looking at our operating metrics for Q4 in full year 2021. As a reminder, Glenn mentioned this previously. We run our business based on agents and employee net motion scores. And we call that AMPS and EMPs. Our goal as a company is to hit a score about 70 or above, which is a world class score. And when we do that, we find that that predicts our agent, our retention and our employee satisfaction. So in our fourth quarter, our AMPS score was 69 versus 73,our full year score was 71. Our fourth quarter ENPS was 78 or 75, with a full year's score 79. So very proud of both those scores. In our Realty model, adding productive agents to our platform drives unit sales, volume, and revenue, and then gross margin that feeds our business. So our agent count in Q4 was 71,137 with a growth rate of 72% year-over-year. As Glenn mentioned we’re above 75,000 today. And you know, we've had many pricing -- the breakdown between international and domestic. And right as we sit here today, we got about a 11% of our agents are international versus 89% domestic. As we move on to unit sales in Q4, our unit sales were 125,029 up 52%, quarter-over-quarter and are our unit sales were at 86% on a full year 2021. Our price per unit was 359 up 90% order at 60% year-over-year full year. And our volume was $44.9 billion up 82% quarter-over-quarter and $156 billion in 2021, which is 160 -- 16%, year-over-year growth. Now look at some of our financial metrics. We have covered some of these or summarized before our revenue increased 77% in the quarter, 110%. Year-over-year, gross margin was up 65%, quarter and 85% year-over-year. And our SG&A, if we look at that,Q4 year-over-year with full basis as we continue to invest in our key focus areas of international growth, technology productivity. We've previously covered the next few lines, so I won't repeat that in the results. And so just couple more metrics. Our ending cash balance in 2021 was $108.2 million target as a company in internal metrics of about $100 million in cash. After we cover expenses, operating expenses, investments and stock buybacks. So we continue to have positive operating cash flow with zero debt on the balance sheet and another consecutive quarter of positive EBITDA earnings since Q3, 2018. And now some other highlights that I'll take you through. The first one would be, we ended 2021 as I mentioned before, it's a real big deal for us. I mean, if you understand ANPS 70 scores very much world class and we're very proud of that. And I think that's -- that has a lot to do with our success in 2021. And before that, we achieve positive accumulated earnings and shareholder equity. And so what that's enabled us to do is, pay more money back to our investors in the form of a cash dividend. So we paid cash dividend in Q4, we declared another cash dividend, which will be paid on March 31. And finally, to offset dilution for our shareholders and our agents, we repurchase $30 million in common stock in Q4 and $172 million year-to-date in 2021. On the right hand side, investing growth continues eXp Realty, domestic -- our domestic business is hitting what we can call a network effect, meaning that not so many years ago, there was -- a much smaller group of people that were influencing and growing the company now we literally have hundreds in the US fantastic leadership, Agent leaders across the US. So you can see that that's kind of driving the numbers. Global expansion 20 countries and growing, we recently announced New Zealand, Greece, Dominican Republic, commercial as we look at this, as we see what's happening in the marketplace, we're really changing the commercial real estate brokerage model via technology data and services. Our technology innovations and our investments continue, expanding the utilization of framevr, MLS coverage and plus 9% in real realty, exp realty.com. Last time I looked, it was about 1 million listings in there. And finally, affiliated services at SUCCESS. We hired Jairek Robbins to run the SUCCESS business as president with a focus on building a coaching business. So really excited about that. And then Success Lending is licensed in 23 states. So those -- that's the progress we've had in the last quarter and some great stuff that's happening, that will absolutely affect our -- positively affect our operating margin down the road. Our 10-K will be released pre-market tomorrow. And now I would like to introduce our CEO of Realty, Jason Gesing, who’ll expand on our agent growth, key drivers and our operational milestones. So welcome, Jason.
Jason Gesing: Thank you very much, Jeff, and good morning, everybody. I just want to start by saying thank you, and congratulations to all of our agents and brokers and staff, who really make this possible, make 2021 possible, and who are driven by the mission right alongside us. As Jeff noted, we've continued to grow at a really rapid and accelerated pace, 72% increase in agent growth year-over-year, and total revenues of $3.8 billion. Today, we have built a metaverse community of more than 76,000 agents, brokers and staff who work together daily, across geographies and in our eXp World. We can attribute our growth, as we have in recent quarters, to a couple of different things. The first is really strong growth and performance inside of the United States. Jeff talked about the network effect. And we continue to bring on top performers in all markets, and they come with other folks. And so, every time somebody comes over, people turn heads, and they inquire about the company, they learned about the company and ultimately they join. And that just continues and continues to grow. Additionally, we've been able to expand globally by utilizing our platform. We've been able to, in 2021, add nine countries to our footprint, and already this year, we've opened operations in the Dominican Republic, Greece and New Zealand are coming later in the quarter. And we've done this really without having to get on any planes or visit any of these markets. And as Jeff noted, we also continue to expand the commercial division and I think with great success. We have a lot of agents who will practice both on the residential and the commercial side. It's a great opportunity and offering for them on the realty side of the business. But we've really been focused on the pure commercial players. And we couldn't be more happy with the results. We continue to gain recognition, both some of the educational offerings that we provide in the commercial space and some tools that are new to market and best in class. The bulk of my focus is going to be on operational excellence. I think, going back to 2016, when we crossed 1,000 agents for the first time, we recognized that, as important as any other factor, what really is going to drive and sustain growth is making sure that we're delivering great experiences for our agents. I should point out, by the way, on the growth side that, our agent count number today in the United States puts us above brands like RE/MAX. I think we are now the third largest brand in the residential market in the United States, and also the single largest brokerage by agent in the United States as well. But all of that is the result of delivering better and industry leading experiences for our agents. And you'll hear about NPS a lot. I think another theme that you'll pick up in my remarks is really elevating our level of service to a concierge level of service in multiple areas of the business that are critical to an agent success. So we're tracking NPS at the agent level to ensure their satisfaction from the time that they initially onboard into the company, to the time where they're growing their business and developing new approaches to it and all the while as they’re achieving the levels of success throughout the course of their careers at the company. Our NPS for agents is 71 for the full year really reflects our commitment to our agents. And we do believe it continues to be one of our strongest differentiators in the marketplace. Contributing to the score are some significant operational improvements we have made during 2021, in which we continue to make today and we're excited about additional opportunities that we're working on presently, for increased efficiency and support in the coming year. Our focus always is on supporting our agents ways to make their lives easier, so they can focus on their business. I'll give you a couple of examples of these improvements. The first is that we've been able to enhance our agents support for what we call our expert care concierge service. So this team, our expert care team really provides fast and efficient support services for our agents with respect to any ESP or work related inquiries. So this -- isn't specific necessarily onboarding or payment or anything like that. This is somebody who maybe wants to verify their icon eligibility, they might be at risk of leaving because they've been misinformed about something that maybe they want to know where they can find out how to sign up for eXp agent healthcare. So they really address the needs of all of our agents. And I can tell you that in 2021, we introduced some new support channels. Our agents are able to reach us now in numerous ways, including phone, email, texting, our intranet, workplace, and now a newly constructed eXp world hub centre here in the metaverse. And through all of those channels and all of those efforts, our Concierge Team in 2021, managed to close to 300,000 inquiries from our agents. Notably, almost one-third of those were solved inside of eXp world. And as a result, that team helps retain millions of dollars of revenue through its efforts, and really represents an important retention and engagement tool. Additionally, for streamlining of our programs and processes, we've been able to speed up support which has resulted in a decrease in response time to agent issues of 64%, and a decrease in resolution of those same issues of 33%. Additionally, we've introduced the concierge level of service specific to our onboarding process, which really allows us to walk agents through all of the elements of getting set up at eXp, it has contributed to a dramatic increase in our onboarding NPS, which has more than doubled in 2021. And also at the state level, we've introduced the concierge level of service into our broker state rooms, providing a really a localized level of support that really saves our state managing brokers, our provincial managing brokers, as well as administrative support coordinators, considerable time as they help agents navigate questions, resources, tools, support, maybe they're looking for multiple listing service or association paperwork, and all of that stuff is handled by our state level concierges. Also important that we focus on payments and we achieve excellence on payments. We are paying our -- pay our agents timely and accurately. And we're really excited about the progress we've made in 2021. And that we continue to make -- we've added new resources and capabilities to simplify and speed up payments and transaction processing. Through overall staffing efficiencies, we've been able to decrease agent commission payment turnaround time by 45% year-over-year. And our agent NPS specific the transaction support in the United States now stands at 80 for 2021. In coming up this year in 2022, we anticipate offering transaction coordination services, at least across all of our states in the United States, last year, quietly piloted the service in 27 states. We’re pleased with where we are and where we're going. And, you know, in addition to a revenue opportunity for the company, we really see this as a chance to meet the needs of our agents by freeing them from tasks that would otherwise divert their attention for building their business and serving their customers. We also think that the TC service can help mitigate compliance risk, for the agent for the broker and for the company because we're able to ensure that the files requisite paperwork is complete, accurate and contained within the transaction folder. And we also believe that the service will really help us as we go to layer in and drive adoption of our affiliated services. Additionally, we introduced a concierge level of service and concierge teams in our transaction department. That team managed 12,000 transaction related inquiries and needs in 2021. And this is sort of a big one from my perspective. Last year, we introduced a new platform capability that allows our agents in the United States to deposit earnest money checks and other escrow checks directly and digitally without having to drive to a bank, drive to their office, or place in the mail. We discovered some delays, particularly in Canada with the Royal Mail. And so in Canada, in addition to allowing agents to deposit their earnest money checks, we also make the platform available to cooperating brokers, cooperating agents, and vendors. And so what that means for our Canadian agents is that, they can get paid faster. Once the payment is issued, and put into the platform, it immediately goes to the edge. So we've been able to speed up Canadian payment times. And that was – that was a significant achievement over the last 12 months. As we look ahead to this year, a couple of other things we're excited about. We're going to be launching a pre onboarding solution for agents, teams and brokerages. This will really speed-up the process by providing advanced information, access to tools, consultations. So new agents, brokers and teams can really hit the ground running on day one having already been familiarized with our tools and our technologies, I mean that the size and size of the volume of the business at the seams and brokerages are bringing over is enormous that we really need to make sure we're putting those folks in a position to have a good experience without any business interruption. We're also planning to recognize greater efficiencies by utilizing where possible, our existing teams and talent in these critical functional areas provide great support and service to our existing global markets, while avoiding staffing, redundancies, and at the same time preserving the local flavor of and respecting the customs within each individual country. Last, I want to touch upon employee NPS, which Jeff mentioned, we'd like to say around here that you have good agent NPS and unless you have good employee NPS and so we're particularly proud of our score of 79. And we think there's a direct correlation between the two scores. We've made some great advancements in our employee program, probably reflected in the NPS score, but also in some external recognition from companies like Glassdoor where last year we placed 15 as skinny four out of 100. Glassdoor is best places to work for us large companies with an overall company rating of 4.6. It was our fifth year in a row on Glassdoor is best places to work US list. Our current rating is improved to 4.8. We also placed 15 out of 25 on Glassdoor is best places to work in Canada list with an overall company rating of 4.1. We've really offered some significant growth in development opportunities to our employees as we continue to expand globally and into new lines of business. So to provide opportunities for leadership for staff, we launched our one ESP leadership development program, which brings cohorts together to tackle a company issue over the course a two week program. Secondly, we continue to build our culture here in the metaverse and our entire work is collaborative, they're connected. And this place really comes to life in exp world where employees have the unique opportunity to engage and interact on a daily basis. Each month more than 1,300 employees from around the globe. Join our all hands meetings to discuss organizational updates, wins and strategy. Finally, we're committed to providing world class benefits that help attract and retain top talent. In 2021, this included expanded paid parental leave in the United States, as well as enriched medical plan designs and expanded benefits options, which now also include new wellness resources and activities, ranging from meditation applications to participation in group yoga classes in exp world. In closing, we're proud to have the most agent-centric brokers on the planet backed by very happy intensive employees. Tom, thank you for allowing me a few minutes, I'll turn it back to you.
Q - Tom White: Great. That was terrific. Thank you, Jason. Okay, so now I guess, we'll jump back into the kind of the Q&A here, Glenn. And I just want to remind folks, if you are listening and want to pose a question, you can submit it via Slido. But Glenn, maybe first a couple of questions just on kind of the state of the housing market. You know, last year was obviously another strong year for volumes, despite pretty rapid home price appreciation and some pressure on inventory. But how do you think the market is kind of shaping up so far in 2022?
Glenn Sanford: Well, I think, the reality is, is we do we are on -- we've got interest rates are supposedly going to go up next month with the FED raising interest rates. We've already seen mortgage rating price in anticipation of some of the rate increases. I think you've got still a lot of people buying homes. The question is, at what levels will the FED raise interest rates which, ironically, I thought that there was going to be -- we were going to be in a lower interest rate environment. And now so that was my crystal ball broke a long-time ago. And that was definitely the case last year, when I sort of suggested we continue to have low interest rates this year. But I think the reality is, is that we're likely going to see fewer transactions, starting sometime maybe second half of 2022, than we we've seen previously. I think between, interest rates and some other factors. That would be my prediction. And so we'll see some softening toward the latter half of the year. And then, we'll just have to see, how it goes into 2023.
Tom White: Okay. How should we think about or how should investors think about, how the eXp model performs, in that type of environment sort of a slower industry growth or maybe even a year of, maybe contraction in the industry. I mean, on one of the platform, I feel like might be relatively more appealing to agents, just given kind of the economic value prop that agents have here. But just be curious, to hear your view on, how you think the business kind of performs generally, in the environment you just got?
Glenn Sanford: Yeah. So we're uniquely positioned where a lot of our bricks and mortar counterpart competitors have had to answer, we'll say, the eXp model, with either reducing the amount that they charge to agents or what have you, they haven't been able to impact they've probably seen the reverse happen in terms of their cost of their bricks and mortar footprint and some of the other answers that it takes to run a brokerage. And so we were actually designed from day one to be a model that could increase or decrease its expenses really, at whatever the market throws at us. And sort of our case, and there would be you know what happened in Q1, Q2 of 2020, we were able to not that we were excited to do it. But we were able to reduce our expenses substantially and actually put up one of our best quarters, if not our best quarter ever, at that point in time, because we're able to really contract a lot of the expenses it takes to run a brokerage whilst providing a high-quality of service for agents. And so our value prop for our agents doesn't change at all. In fact, I think it continues to get by almost 5,000 agents so far year-to-date, which are only quite two months in. So, we're coming up on the two-month mark. And so the idea that we can grow by some number, we think about something above 50% year-over-year is pretty predictable, just based on our value prop. Now, what could be a headwind is if the housing market takes a hit, for some reason, second half the year that might change it, but I think our market share continues to grow rapidly. The other piece is, we always wanted to focus on this idea we're really about the agent. And as a company, we think everybody wins by making the agent the big focus. Now, we also are of high growth companies that are out there. At any note, we're also the only one that's been profitable consistently for now more years in a row and I think that's part of just how do we think about the balance between the agent-centric and running a model that will be sustainable for the lawn for agents and brokers. I think that's one of the things that if we do start to hit a slowdown in market starts to have issues, we don't need to go and raise money to continue to grow and sustain the brokerage, which is a pretty unique position for a high growth company to be in. And then also we continue to think about as our agents become larger and larger holders, we think about things like how does that play -- how does the dividend play into that? And how does that enhance their agent value proposition as well. So, we think it's an iterative process that is really pay attention and stay close to our agents, whether it be physically or through our regular surveys around NPS and just making sure that we're paying -- that this thing continues to grow as long as we're focused on the growth side.
Tom White: Got it. Maybe just a follow-up. I mean how do you think about the performance of the stock in terms of like the agent's overall value prop, all that kind of -- like all sort of front end monetization, right? You got paid splits, low fees, you've got the revenue share. And you continue to sort of make those benefits sweeter or enhance them for agents. One of the 10 questions we get a lot from investors is, would you guys ever like raise the cap or do stuff like that, which might not benefit agents immediately, but it might be benefit the stock which would then agents or also shareholders in the company, so curious how you think about like the performance of the stock, I guess relative to the broader portfolio of benefit price increase margins comes from.
Tom White: Great. Maybe I'll ask one more and then a pose a couple of questions to Jeff. But can you just give us an update on success lending and how that launch is going? And your latest thoughts on how you kind of drive adoption of the product with your agents?
Glenn Sanford: Yes, so success lending, we're now licensed in probably about a dozen or so states. We've had our loans that are being closed basically as we speak through the success lending platform and the relationship that we built there. So, it's coming together. We -- one unique piece is that we're actually hiring local on-the-ground loan officers. So, we've hired a group in Illinois, we're hiring folks in Colorado. We're hiring folks in Texas. We're hiring local on the ground successful Hello teams that can benefit from purchase business for the last number of years. It's all been about refinance. And now, to the extent that they they're looking for where can they get new purchase business, we that right now is actually a great time for us specifically, to be going into the retail lending. Business was successful lending, because there's a lot of great talent out there that is looking for the type of access that that eXp would provide with a partnership. So, that's coming together quite well. We're working on our integrations now with our real estate portal, our kvCORE platform. There's a platform that will be rolled out a little bit later this year, for agents that will create a seamless experience that will allow consumers to get pre-approved during the home search process. Last year, -- actually we just had some data around our kvCORE platform. We have 38 million consumers that are in our instance of kvCORE, which is our real estate portal from to consumer perspective. 10 million of those have active list searches and listing alerts going on. And in that we think that introducing successful lending is going to be a great way to create awareness, and then also deal flow. So pretty excited about how that all comes together as the year goes on.
Tom White: Terrific. Maybe we'll switch over to some financial questions, Jeff. It’s available. I guess first on gross margins, they were up sequentially, but down a little bit year-over-year. Could you talk maybe just about kind of the main drivers there? And how should we how should we think about the trajectory of gross margins in calendar 2022.
Glenn Sanford: Yeah. The pressure on the gross margins is coming from volume or massive volume in the business. And then any increased price, down results in capping -- lot more capping going on the business. I mean, our focus really is on the gross margin dollars. So in fourth quarter, we're at 83.1 Up 65% year-to-date, 296 million, up 85% it and what I'm seeing. I think what we're seeing is a business. It seems to be where they're landing at the end of the year, seems to kind of stabilize that's kind of what it looks like as we look into 2022 we're kind of seeing at around the same number. But as Glenn said, and as you know, our model is designed to give back most of the revenue generated by the broker or the agents whether it's in the form of commissions, rev share or equity. And what we'll be working on is the affiliate services where we believe there's significant percentages in there from an operating margin standpoint to build higher margins across the business. But to me it looks like what we're seeing is it kind of stabilized, we think around this point in time. And I think if we do get back to more seasonal relationship from a volume standpoint, it should go back to higher in Q1 and Q4, lower in Q2 and Q3 but who knows what's going to happen, but we're feeling pretty good .
Tom White: Yes, that's helpful. Is 2022, the year where some of the affiliated services like mortgage and maybe title might have a more appreciable impact on gross margins? Or are really the main drivers of growth? And maybe I'd add to that list International where I think your gross margin percentages are structurally kind of better than the domestic brokerage? Is this year where those three things, you know, have an appreciable impact? Or is 2022 gross margin really going to be driven by kind of the volume and capping dynamic that you've just touched on?
Glenn Sanford: Yeah, I think in 2022, I mean, we're going to make substantial progress and building these businesses, whether it be the mortgage, international and coaching and other affiliate services businesses, I don't think the impacts we're going to see a material impact from a percentage of gross margin, I think that's going to show up in 2023. But I think we're going to make some new features like I hired Jairek Robbins to lead our business on the coaching side. So we feel very, very bullish that that's going to happen this year mortgages. It we're actually in 23 states right now. So and then International as you can see, we're in the 20 plus countries. So we think that the real business is happening as it for the marginally catch up. I think that's going to be more towards the end of this year going into next year.
