DOUG Douglas Elliman Inc

Third Quarter 2023 Highlights:

• Consolidated revenues of $251.5 million, compared to $272.6 million in the prior year quarter
  • Douglas Elliman’s real estate brokerage segment’s gross transaction value was approximately $9.3 billion, compared to approximately $10.2 billion in the prior year quarter
  • Douglas Elliman’s real estate brokerage segment reported an average price per transaction of $1.57 million
• Consolidated operating loss of $8.8 million and real estate brokerage segment operating loss of $2.0 million, compared to operating loss of $5.2 million and operating income of $1.5 million, respectively, in the prior year quarter
• Net loss attributed to Douglas Elliman of $4.9 million, or $0.06 per diluted common share, compared to net loss of $4.0 million, or $0.05 per diluted common share, in the prior year quarter
• Adjusted EBITDA attributed to Douglas Elliman loss of $3.0 million, compared to income of $124,000 in the prior year quarter.
• Adjusted EBITDA attributed to Douglas Elliman’s real estate brokerage segment of $1.5 million, compared to $5.1 million in the prior year quarter

Year-to-Date 2023 Highlights:

• Consolidated revenues of $741.4 million, compared to $945.8 million in the prior year period
  • Douglas Elliman’s real estate brokerage segment’s gross transaction value was approximately $26.5 billion, compared to approximately $35.4 billion in the prior year period
  • Douglas Elliman’s real estate brokerage segment reported an average price per transaction of $1.60 million
• Consolidated operating loss of $40.9 million and real estate brokerage segment operating loss of $20.3 million, compared to operating income of $17.3 million and $37.6 million, respectively, in the prior year period
• Net loss attributed to Douglas Elliman of $27.7 million, or $0.34 per diluted common share, compared to net income of $12.8 million, or $0.15 per diluted common share, in the prior year period
• Adjusted EBITDA attributed to Douglas Elliman loss of $23.2 million compared to income of $32.1 million in the prior year period
• Adjusted EBITDA attributed to Douglas Elliman’s real estate brokerage segment loss of $9.0 million compared to income of $47.2 million in the prior year period

Douglas Elliman Inc. (NYSE:DOUG) today announced financial results for the three and nine months ended September 30, 2023.

“Douglas Elliman delivered another strong quarterly performance despite a challenging macroeconomic environment, thanks in large part to stable pricing in our luxury markets, the competitive advantage of our development marketing business and our dedicated team of world-class agents,” said Howard M. Lorber, Chairman and Chief Executive Officer of Douglas Elliman. “Douglas Elliman’s differentiated platform and the underlying strength of our business make us well-positioned to weather the current challenging market conditions as we remain focused on capitalizing on our competitive advantages to drive long-term growth and value for stockholders.”

GAAP Financial Results

Three months ended September 30, 2023. Third quarter 2023 revenues were $251.5 million, compared to revenues of $272.6 million in the third quarter of 2022. The Company recorded an operating loss of $8.8 million in the third quarter of 2023, compared to an operating loss of $5.2 million in the third quarter of 2022. Net loss attributed to Douglas Elliman for the third quarter of 2023 was $4.9 million, or $0.06 per diluted common share, compared to net loss of $4.0 million, or $0.05 per diluted common share, in the third quarter of 2022.

Nine months ended September 30, 2023. For the nine months ended September 30, 2023, revenues were $741.4 million, compared to revenues of $945.8 million for the nine months ended September 30, 2022. The Company recorded an operating loss of $40.9 million for the nine months ended September 30, 2023, compared to operating income of $17.3 million for the nine months ended September 30, 2022. Net loss attributed to Douglas Elliman for the nine months ended September 30, 2023 was $27.7 million, or $0.34 per diluted common share, compared to net income of $12.8 million, or $0.15 per diluted common share, for the nine months ended September 30, 2022.

Non-GAAP Financial Measures

Non-GAAP financial measures include adjustments for stock-based compensation, equity in losses (earnings) from equity method investments, restructuring, and other, net (for purposes of Adjusted EBITDA). Reconciliations of non-GAAP financial measures to the comparable GAAP financial results for the three and nine months ended September 30, 2023 and 2022 and the last twelve months ended September 30, 2023 are included in Tables 2, 3 and 4.

Three months ended September 30, 2023 compared to the three months ended September 30, 2022

Adjusted EBITDA attributed to Douglas Elliman (as described in Table 2 attached hereto) were a loss of $3.0 million for the third quarter of 2023, compared to income of $124,000 for the third quarter of 2022.

Adjusted EBITDA attributed to Douglas Elliman’s real estate brokerage segment (as described in Table 2 attached hereto) were $1.5 million for the third quarter of 2023, compared to $5.1 million for the third quarter of 2022.

Adjusted Net Loss attributed to Douglas Elliman (as described in Table 3 attached hereto) was $4.7 million, or $0.06 per diluted share, for the third quarter of 2023, compared to Adjusted Net Loss attributed to Douglas Elliman of $4.0 million, or $0.05 per diluted share, for the third quarter of 2022.

Nine months ended September 30, 2023 compared to the nine months ended September 30, 2022

Adjusted EBITDA attributed to Douglas Elliman (as described in Table 2 attached hereto) were a loss of $23.2 million for the nine months ended September 30, 2023, compared to income of $32.1 million for the nine months ended September 30, 2022.

Adjusted EBITDA attributed to Douglas Elliman’s real estate brokerage segment (as described in Table 2 attached hereto) were a loss of $9.0 million for the nine months ended September 30, 2023, compared to income of $47.2 million for the nine months ended September 30, 2022.

Adjusted Net Loss attributed to Douglas Elliman (as described in Table 3 attached hereto) was $26.4 million, or $0.32 per diluted share, for the nine months ended September 30, 2023, compared to Adjusted Net Income attributed to Douglas Elliman of $12.2 million, or $0.14 per diluted share, for the nine months ended September 30, 2022.

Gross Transaction Value

For the three months ended September 30, 2023, Douglas Elliman’s subsidiary, Douglas Elliman Realty, LLC, achieved gross transaction value of approximately $9.3 billion, compared to approximately $10.2 billion for the three months ended September 30, 2022. For the three months ended September 30, 2023, Douglas Elliman’s real estate brokerage segment reported an average price per transaction of $1.57 million.

For the nine months ended September 30, 2023, Douglas Elliman Realty, LLC achieved gross transaction value of approximately $26.5 billion compared to approximately $35.4 billion for the nine months ended September 30, 2022. For the nine months ended September 30, 2023, Douglas Elliman’s real estate brokerage segment reported an average price per transaction of $1.60 million.

Consolidated Balance Sheet

Douglas Elliman maintained a strong balance sheet with cash and cash equivalents of $126.3 million at September 30, 2023. This significant liquidity places the Company in a position of strength in the market.

Conference Call to Discuss Third Quarter 2023 Results

As previously announced, the Company will host a conference call and webcast to discuss its third quarter 2023 results on Wednesday, November 8, 2023 at 8:30 a.m. (ET).

Investors may access the call via live webcast at https://join.eventcastplus.com/eventcastplus/Douglas-Elliman-Inc-Third-Quarter-2023-Results-Conference-Call. Please join the webcast at least 10 minutes prior to the start time.

A replay of the call will be available shortly after the call ends on November 8, 2023 through November 22, 2023 at https://join.eventcastplus.com/eventcastplus/Douglas-Elliman-Inc-Third-Quarter-2023-Results-Conference-Call.

Non-GAAP Financial Measures

Adjusted EBITDA attributed to Douglas Elliman, Adjusted Net (Loss) Income attributed to Douglas Elliman, and financial measures for the last twelve months (“LTM”) ended September 30, 2023 (referred to as the “Non-GAAP Financial Measures”) are financial measures not prepared in accordance with generally accepted accounting principles (“GAAP”). The Company believes that the Non-GAAP Financial Measures are important measures that supplement discussion and analysis of its results of operations and enhance an understanding of its operating performance.

The Company believes the Non-GAAP Financial Measures provide investors and analysts with a useful measure of operating results unaffected by differences in capital structures and ages of related assets among otherwise comparable companies.

Management uses the Non-GAAP Financial Measures as measures to review and assess operating performance of the Company’s business, and management does and investors should review both the overall performance (GAAP net income) and the operating performance (the Non-GAAP Financial Measures) of the Company’s business. While management considers the Non-GAAP Financial Measures to be important, they should be considered in addition to, but not as substitutes for or superior to, other measures of financial performance prepared in accordance with GAAP, such as operating income, net income and cash flows from operations. In addition, the Non-GAAP Financial Measures are susceptible to varying calculations and the Company’s measurement of the Non-GAAP Financial Measures may not be comparable to those of other companies. Attached hereto as Tables 2, 3 and 4 is information relating to the Company’s Non-GAAP Financial Measures for the three and nine months ended September 30, 2023 and 2022 and the last twelve months ended September 30, 2023.

About Douglas Elliman Inc.

Douglas Elliman Inc. (NYSE: DOUG, “Douglas Elliman”) owns Douglas Elliman Realty, LLC, which is one of the largest residential brokerage companies in the United States with operations in New York, Florida, California, Texas, Colorado, Nevada, Massachusetts, Connecticut, Maryland, Virginia, and Washington, D.C. In addition, Douglas Elliman sources, uses and invests in early-stage, disruptive property technology (“PropTech”) solutions and companies and provides other real estate services, including development marketing, property management and settlement and escrow services in select markets. Additional information concerning Douglas Elliman is available on its website, investors.elliman.com.

Investors and others should note that we may post information about Douglas Elliman on our website at investors.elliman.com or, if applicable, on our accounts on Facebook, Instagram, LinkedIn, TikTok, Twitter, YouTube or other social media platforms. It is possible that the postings or releases could include information deemed to be material information. Therefore, we encourage investors, the media and others interested in Douglas Elliman to review the information we post on our website at investors.elliman.com and on our social media accounts.

Forward-Looking and Cautionary Statements

This press release includes forward-looking statements within the meaning of the federal securities law. All statements other than statements of historical or current facts made in this document are forward-looking. We identify forward-looking statements in this document by using words or phrases such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may be,” “continue” “could,” “potential,” “objective,” “plan,” “seek,” “predict,” “project” and “will be” and similar words or phrases or their negatives. Forward-looking statements reflect our current expectations and are inherently uncertain. Actual results could differ materially for a variety of reasons.

Risks and uncertainties that could cause our actual results to differ significantly from our current expectations are described in our Annual Report on Form 10-K for the year ended December 31, 2022 and, when filed, our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023. We undertake no responsibility to publicly update or revise any forward-looking statement, except as required by applicable law.

[Financial Tables Follow]

 

TABLE 1 DOUGLAS ELLIMAN INC. AND SUBSIDIARIES CONDENSED COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in Thousands, Except Per Share Amounts)

   

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenues:

 

 

 

 

 

 

 

Commissions and other brokerage income

$

239,255

 

 

$

259,977

 

 

$

703,780

 

 

$

903,917

 

Property management

 

8,697

 

 

 

8,541

 

 

 

26,849

 

 

 

27,786

 

Other ancillary services

 

3,596

 

 

 

4,070

 

 

 

10,813

 

 

 

14,144

 

Total revenues

 

251,548

 

 

 

272,588

 

 

 

741,442

 

 

 

945,847

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

Real estate agent commissions

 

185,845

 

 

 

195,836

 

 

 

546,749

 

 

 

686,440

 

Sales and marketing

 

20,770

 

 

 

22,703

 

 

 

64,170

 

 

 

64,145

 

Operations and support

 

17,121

 

 

 

18,218

 

 

 

53,338

 

 

 

55,872

 

General and administrative

 

28,817

 

 

 

33,522

 

 

 

92,371

 

 

 

99,227

 

Technology

 

5,602

 

 

 

5,527

 

 

 

17,777

 

 

 

16,809

 

Depreciation and amortization

 

1,999

 

 

 

1,968

 

 

 

6,031

 

 

 

6,033

 

Restructuring

 

215

 

 

 

—

 

 

 

1,932

 

 

 

—

 

Operating (loss) income

 

(8,821

)

 

 

(5,186

)

 

 

(40,926

)

 

 

17,321

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

Interest income, net

 

1,785

 

 

 

493

 

 

 

4,260

 

 

 

564

 

Equity in earnings (losses) from equity-method investments

 

10

 

 

 

(895

)

 

 

(143

)

 

 

(477

)

Investment and other income

 

27

 

 

 

1,055

 

 

 

109

 

 

 

3,026

 

(Loss) income before provision for income taxes

 

(6,999

)

 

 

(4,533

)

 

 

(36,700

)

 

 

20,434

 

Income tax (benefit) expense

 

(1,869

)

 

 

(290

)

 

 

(8,552

)

 

 

8,173

 

 

 

 

 

 

 

 

 

Net (loss) income

 

(5,130

)

 

 

(4,243

)

 

 

(28,148

)

 

 

12,261

 

 

 

 

 

 

 

 

 

Net loss attributed to non-controlling interest

 

264

 

 

 

280

 

 

 

439

 

 

 

532

 

 

 

 

 

 

 

 

 

Net (loss) income attributed to Douglas Elliman Inc.

$

(4,866

)

 

$

(3,963

)

 

$

(27,709

)

 

$

12,793

 

 

 

 

 

 

 

 

 

Per basic common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income applicable to common shares attributed to Douglas Elliman Inc.

$

(0.06

)

 

$

(0.05

)

 

$

(0.34

)

 

$

0.15

 

 

 

 

 

 

 

 

 

Per diluted common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income applicable to common shares attributed to Douglas Elliman Inc.

$

(0.06

)

 

$

(0.05

)

 

$

(0.34

)

 

$

0.15

 

 

TABLE 2 DOUGLAS ELLIMAN INC. AND SUBSIDIARIES RECONCILIATION OF ADJUSTED EBITDA (Unaudited) (Dollars in Thousands)

   

 

LTM

 

Year Ended

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

December 31,

 

September 30,

 

September 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

 

 

 

 

 

 

Net (loss) income attributed to Douglas Elliman Inc.

$

(46,124

)

 

$

(5,622

)

 

$

(4,866

)

 

$

(3,963

)

 

$

(27,709

)

 

$

12,793

 

Interest income, net

 

(5,475

)

 

 

(1,779

)

 

 

(1,785

)

 

 

(493

)

 

 

(4,260

)

 

 

(564

)

Income tax (benefit) expense

 

(10,222

)

 

 

6,503

 

 

 

(1,869

)

 

 

(290

)

 

 

(8,552

)

 

 

8,173

 

Net (loss) income attributed to non-controlling interest

 

(684

)

 

 

(777

)

 

 

(264

)

 

 

(280

)

 

 

(439

)

 

 

(532

)

Depreciation and amortization

 

8,010

 

 

 

8,012

 

 

 

1,999

 

 

 

1,968

 

 

 

6,031

 

 

 

6,033

 

EBITDA

$

(54,495

)

 

$

6,337

 

 

$

(6,785

)

 

$

(3,058

)

 

$

(34,929

)

 

$

25,903

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity in losses (earnings) from equity-method investments (a)

 

229

 

 

 

563

 

 

 

(10

)

 

 

895

 

 

 

143

 

 

 

477

 

Stock-based compensation expense (b)

 

12,328

 

 

 

11,138

 

 

 

3,442

 

 

 

3,165

 

 

 

9,666

 

 

 

8,476

 

Restructuring

 

1,932

 

 

 

—

 

 

 

215

 

 

 

—

 

 

 

1,932

 

 

 

—

 

Other, net

 

(512

)

 

 

(3,429

)

 

 

(27

)

 

 

(1,055

)

 

 

(109

)

 

 

(3,026

)

Adjusted EBITDA

 

(40,518

)

 

 

14,609

 

 

 

(3,165

)

 

 

(53

)

 

 

(23,297

)

 

 

31,830

 

Adjusted EBITDA attributed to non-controlling interest

 

183

 

 

 

342

 

 

 

138

 

 

 

177

 

 

 

63

 

 

 

222

 

Adjusted EBITDA attributed to Douglas Elliman Inc.

$

(40,335

)

 

$

14,951

 

 

$

(3,027

)

 

$

124

 

 

$

(23,234

)

 

$

32,052

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (loss) income by Segment:

 

 

 

 

 

 

 

 

 

 

 

Real estate brokerage

$

(35,975

)

 

$

21,993

 

 

$

(1,992

)

 

$

1,503

 

 

$

(20,349

)

 

$

37,619

 

Corporate and other

 

(26,813

)

 

 

(26,534

)

 

 

(6,829

)

 

 

(6,689

)

 

 

(20,577

)

 

 

(20,298

)

Total

$

(62,788

)

 

$

(4,541

)

 

$

(8,821

)

 

$

(5,186

)

 

$

(40,926

)

 

$

17,321

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate brokerage segment

 

 

 

 

 

 

 

 

 

 

 

Operating (loss) income

$

(35,975

)

 

$

21,993

 

 

$

(1,992

)

 

$

1,503

 

 

$

(20,349

)

 

$

37,619

 

Depreciation and amortization

 

8,010

 

 

 

8,012

 

 

 

1,999

 

 

 

1,968

 

 

 

6,031

 

 

 

6,033

 

Stock-based compensation

 

4,272

 

 

 

4,195

 

 

 

1,175

 

 

 

1,419

 

 

 

3,355

 

 

 

3,278

 

Restructuring

 

1,932

 

 

 

—

 

 

 

215

 

 

 

—

 

 

 

1,932

 

 

 

—

 

Adjusted EBITDA

 

(21,761

)

 

 

34,200

 

 

 

1,397

 

 

 

4,890

 

 

 

(9,031

)

 

 

46,930

 

Adjusted EBITDA attributed to non-controlling interest

 

183

 

 

 

342

 

 

 

138

 

 

 

177

 

 

 

63

 

 

 

222

 

Adjusted EBITDA attributed to Douglas Elliman Inc.

$

(21,578

)

 

$

34,542

 

 

$

1,535

 

 

$

5,067

 

 

$

(8,968

)

 

$

47,152

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and other segment

 

 

 

 

 

 

 

 

 

 

 

Operating loss

$

(26,813

)

 

$

(26,534

)

 

$

(6,829

)

 

$

(6,689

)

 

$

(20,577

)

 

$

(20,298

)

Stock-based compensation

 

8,056

 

 

 

6,943

 

 

 

2,267

 

 

 

1,746

 

 

 

6,311

 

 

 

5,198

 

Adjusted EBITDA attributed to Douglas Elliman Inc.

$

(18,757

)

 

$

(19,591

)

 

$

(4,562

)

 

$

(4,943

)

 

$

(14,266

)

 

$

(15,100

)

____________ a.

Represents equity in earnings recognized from the Company’s investment in certain real estate businesses that are accounted for under the equity method and are not consolidated in the Company’s financial results.

b.

Represents amortization of stock-based compensation. $4,272, $1,175, $1,419, $3,355, $3,278, and $4,195 are attributable to the Real estate brokerage segment for the last twelve months ended September 30, 2023, the three and nine months ended September 30, 2023, and 2022, and the year ended December 31, 2022, respectively. $8,056, $2,267, $1,746, $6,311, $5,198, and $6,943 are attributable to the Corporate and other segment for the last twelve months ended September 30, 2023, the three and nine months ended September 30, 2023 and 2022, and the year ended December 31, 2022, respectively.

 

TABLE 3 DOUGLAS ELLIMAN INC. AND SUBSIDIARIES RECONCILIATION OF ADJUSTED NET (LOSS) INCOME (Unaudited) (Dollars in Thousands, Except Per Share Amounts)

   

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

 

 

Net (loss) income attributed to Douglas Elliman Inc.

$

(4,866

)

 

$

(3,963

)

 

$

(27,709

)

 

$

12,793

 

 

 

 

 

 

 

 

 

Restructuring

 

215

 

 

 

—

 

 

 

1,932

 

 

 

—

 

Income related to Tax Disaffiliation indemnification

 

—

 

 

 

(28

)

 

 

—

 

 

 

(581

)

Total adjustments

 

215

 

 

 

(28

)

 

 

1,932

 

 

 

(581

)

 

 

 

 

 

 

 

 

Tax expense related to adjustments

 

(66

)

 

 

—

 

 

 

(589

)

 

 

—

 

Adjusted net (loss) income attributed to Douglas Elliman Inc.

$

(4,717

)

 

$

(3,991

)

 

$

(26,366

)

 

$

12,212

 

 

 

 

 

 

 

 

 

Per diluted common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net (loss) income applicable to common shares attributed to Douglas Elliman Inc.

$

(0.06

)

 

$

(0.05

)

 

$

(0.32

)

 

$

0.14

 

 

TABLE 4 DOUGLAS ELLIMAN INC. AND SUBSIDIARIES RECONCILIATION OF REVENUES (Unaudited) (Dollars in Thousands, Except for Gross Transaction Value)

   

 

LTM

 

Year Ended

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

December 31,

 

September 30,

 

September 30,

 

2023

 

2022

 

2023

 

2022

 

2023

 

2022

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Commissions and other brokerage income

$

899,748

 

$

1,099,885

 

$

239,255

 

$

259,977

 

$

703,780

 

$

903,917

Property management

 

35,085

 

 

36,022

 

 

8,697

 

 

8,541

 

 

26,849

 

 

27,786

Other ancillary services

 

13,939

 

 

17,270

 

 

3,596

 

 

4,070

 

 

10,813

 

 

14,144

Total revenues

$

948,772

 

$

1,153,177

 

$

251,548

 

$

272,588

 

$

741,442

 

$

945,847

 

 

 

 

 

 

 

 

 

 

 

 

Gross transaction value (in billions)

$

34.0

 

$

42.9

 

$

9.3

 

$

10.2

 

$

26.5

 

$

35.4

Total transactions

 

21,360

 

 

26,573

 

 

5,913

 

 

6,796

 

 

16,584

 

 

21,797

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20231107156670/en/

Stephen Larkin, Douglas Elliman Inc. 917-902-2503 Emily Claffey/Benjamin Spicehandler, FGS Global, 212-687-8080 J. Bryant Kirkland III, Douglas Elliman Inc. 305-579-8000