Douglas Elliman Inc.
For the period ended Mar 31, 2025. Filed May 6, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 6, 2025
DOUG$1.56-0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0001878897-24-000055
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-06.
0001878897-25-000040
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 120 previous paragraphs and 89 current paragraphs.
34 unchanged; 32 reworded; 22 added; 50 removed; 4 previous and 1 current paragraphs rearranged.
Tables are not compared: 6 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
(Dollars in Thousands, Except Per Share Amounts or Stated Otherwise)
Current report
Change in Reportable Segments
Current report
We now manage our business as a single business segment. Therefore, prior business segments were recast because our Chief Executive Officer, who became CEO in October 2024 and acts as the Chief Operating Decision Maker, or CODM, began reviewing the operating performance of our business as a whole, instead of on a segment basis as was done prior to January 1, 2025.
Current report
Furthermore, the CODM now evaluates the operating results and revenue of our business as total real estate services to make decisions. As a result of this change, the nature and substance of information regularly provided to and used by the CODM have been revised. The CODM uses and compares results, which include operating loss and investment and other income, to prior periods and, based on these results, assesses business performance and identifies trends of ongoing operations on a consolidated basis.
Current report
(a)Represents amortization of stock-based compensation. For the last twelve months ended March 31, 2025, $4,181 of stock-based compensation is included within General and administrative expenses and $1,073 is included within Operations and support expenses on the condensed consolidated statements of operations. For the three months ended March 31, 2025, $1,770 of stock-based compensation is included within General and administrative expenses and $265 is included within Operations and support expenses on the condensed consolidated statements of operations. For the three months ended March 31, 2024, $3,099 of stock-based compensation is included within General and administrative expenses and $256 is included within Operations and support expenses on the condensed consolidated statements of operations. For the year ended December 31, 2024, $5,510 of stock-based compensation is included within General and administrative expenses and $1,064 is included within Operations and support expenses on the consolidated statements of operations.
Current report
(c)Represents unusual litigation expense, settlement and related expenses incurred in connection with industry-wide antitrust class action lawsuits and other matters related to employees and agents. For the last twelve months and three months ended March 31, 2025, $16,836 and $1,898 are included within General and administrative expenses on the condensed consolidated statements of operations, respectively. For the three months ended March 31, 2024, we incurred such expenses of $18,395 with $645 being included in General and administrative expenses and $17,750 being included in Antitrust litigation settlement expense in the condensed consolidated statement of operations. For the year ended December 31, 2024, we incurred unusual litigation expense, settlement and related expenses of $33,333 with $15,583 being included in General and administrative expenses and $17,750 being included in Antitrust litigation settlement expense on the consolidated statement of operations.
Current report
(d) For the last twelve months and three months ended March 31, 2025, $2,420 and $410 are included within General and administrative expenses on the condensed consolidated statement of operations, respectively. For the year ended December 31, 2024, $2,010 is included within General and administrative expenses on the consolidated statement of operations.
Current report
The primary components of our operating expenses, the changes, which are described in the following discussion of our results of operations, are summarized below:
Current report
•Sales and marketing. Sales and marketing expense consists primarily of marketing and advertising expenses, compensation and other personnel-related costs for employees supporting sales, marketing, expansion and related functions, occupancy-related costs and agent acquisition incentives.
Current report
•Operations and support. Operations and support expense consists primarily of compensation and other personnel-related costs for employees supporting agents, third-party consulting and professional services costs (not included in general and administrative or technology), commissions related to escrow transactions, fair value adjustments to contingent consideration for our acquisitions and other related expenses.
Current report
•General and administrative. General and administrative expense consists primarily of compensation, stock-based compensation expense and other personnel-related costs for administrative employees, including executives, finance and accounting, legal, human resources, communications, property management and escrow services as well as the occupancy costs for our headquarters and other offices supporting our administrative functions and, for the three months ended March 31, 2024, transition service fees paid to our former parent, Vector Group, for the use of office space and employees, professional services fees for legal and finance, insurance expenses and talent acquisition expenses.
Current report
•Technology. Technology expense consists primarily of compensation and other personnel-related costs for employees in the product, engineering and technology functions, website hosting expenses, software licenses and equipment, third-party consulting costs, data licenses of PropTech and other related expenses associated with the implementation of our technology initiatives.
Current report
Three months ended March 31, 2025 Compared to Three months ended March 31, 2024
Current report
As discussed above, effective on January 1, 2025, we began to report our financial results as a single operating and reportable segment. Therefore, the presentation of our business’s financial information for the three months ended March 31, 2025 and 2024 will be reported as one segment. For more information, see Note 11. “Segment Information” to our condensed consolidated financial statements.
Current report
Revenues. Our revenues were $253,403 for the three months ended March 31, 2025 compared to $200,239 for the three months ended March 31, 2024. The $53,164 increase in revenues was primarily due to higher commissions and other brokerage income, driven by an increased number of transactions and higher transaction values from existing home sales in both the New York City and Florida markets compared to the 2024 period.
Current report
Operating expenses. Our operating expenses were $258,752 for the three months ended March 31, 2025, compared to $241,703 for the three months ended March 31, 2024. The $17,049 increase was primarily due to higher real estate brokerage commissions of $37,509 resulting from increased revenues, partially offset by lower operating expenses, mainly related to a $17,750 litigation settlement incurred in 2024.
Current report
Operating loss. Operating loss was $5,349 for the three months ended March 31, 2025, compared to $41,464 for the three months ended March 31, 2024. The $36,115 decrease in operating loss was primarily due to increased revenues and reduced operating expenses, partially offset by higher commission expenses and the $17,750 litigation settlement.
Current report
Other (expense) income. Other expense was $935 for the three months ended March 31, 2025, compared to other income of $974 for the three months ended March 31, 2024. For the three months ended March 31, 2025, other expense primarily consisted of interest expense of $1,530, a $746 loss from changes in the fair value of the derivative embedded within convertible debt, and net losses realized on investment securities of $22. These were partially offset by interest income of $1,361.
Current report
Income tax expense. There was no income tax expense for the three months ended March 31, 2025. The income tax expense for the three months ended March 31, 2024 was $1,195.
Current report
We continue to evaluate our capital structure and current market conditions related to our capital structure. We may acquire, or seek to acquire, additional operating businesses through a merger, purchase of assets, stock acquisition or other means, or to make other revisions to our capital structure, including, if authorized by our Board of Directors and holders of our Convertible Notes, the repurchase of our common stock in open market transactions. These initiatives may limit our liquidity otherwise available.
Current report
Other litigation. Two real estate salespersons formerly associated with us as independent contractors, have, together or separately, been named as defendants in multiple complaints by women accusing them of sexual assault and related wrongdoing, and face criminal charges related to similar alleged conduct. Recently, we and our former Chief Executive Officer were named as defendants in one of these lawsuits. Plaintiffs have brought claims against us under the New York Gender-Motivated Violence Act and sex trafficking, negligence, and negligent hiring, retention, and supervision claims. We deny liability and intend to defend vigorously against these claims. We are aware that other claims may be asserted against us and possibly against certain former Company leadership arising out of the matters related to the two former real estate salespersons.
Current report
•the impact of enacted and proposed tariffs and other trade policies, and related uncertainties in the global economy resulting from such policies,
Removed paragraphs (50)
Previous report
We are a holding company and engaged principally in two business segments:
Previous report
(a)Represents amortization of stock-based compensation. $4,795, $3,611,$3,355, and$4,539 are attributable to the Real estate brokerage segment for the last twelve months ended September 30, 2024, the nine months ended September 30, 2024, and 2023, and the year ended December 31, 2023, respectively. $9,331, $7,106,$6,311, and$8,536 are attributable to the Corporate and other segment for the last twelve months ended September 30, 2024, the nine months ended September 30, 2024, and 2023, and the year ended December 31, 2023, respectively.
Previous report
(c)Represents the settlement of litigation related to the resolution on a nationwide basis of pending class action litigations against NAR and the Company.
Previous report
Recent Developments
Previous report
Management changes. On October 21, 2024, the Company’s Chairman of the Board of Directors, President and Chief Executive Officer, notified the Company’s Board of his resignation as Chairman of the Board, President and Chief Executive Officer, effective immediately. In connection with his cessation of employment with the Company, the Company cancelled 2,965,625 unvested shares of common stock subject to vesting pursuant to the Issuer’s 2021 Management Incentive Plan. On October 25, 2024, the President and Chief Executive Officer of the Company’s subsidiary, Douglas Elliman Realty LLC, was terminated effective immediately. On October 30, 2024, the Company and James D. Ballard, Senior Vice President - Enterprise Efficiency and Chief Technology Officer, mutually agreed to terminate Mr. Ballard’s employment, effective immediately. Mr. Ballard will be entitled to (i) receive cash payment in an amount equal to $835; (ii) acceleration of all unvested equity and option grants; and (iii) participation in a COBRA plan for 18 months.
Previous report
Aircraft Leases. On October 17, 2024, the Company delivered notices of termination to terminate, effective as of November 16, 2024, the Aircraft Lease Agreements.
Previous report
Convertible Debt. On July 2, 2024, we issued $50,000 in aggregate principal amount of senior secured convertible notes due on July 2, 2029 (the “Convertible Notes”) to funds advised by KLIM. The Convertibles Notes bear interest at a rate of 7.0% per annum payable in cash, or, at our election, 8.0% per annum paid in kind, due semi-annually. The convertible notes are convertible into common stock at an initial conversion rate equal to $1.50 per share, subject to certain customary anti-dilution adjustments. We intend to use the net proceeds from the sale of the Convertible Notes for general corporate purposes.
Previous report
Litigation Settlement. On April 26, 2024, we entered into a settlement agreement (the “Settlement Agreement”) to resolve, on a nationwide basis, the Gibson and Umpa cases (the “Lawsuits”). The settlement resolves all claims, on a nationwide basis, by the plaintiffs and proposed settlement class members in the Lawsuits, which includes, but is not limited to, all claims concerning brokerage commissions by the proposed settlement class members that were asserted in other lawsuits against us and our subsidiaries (collectively, the “Claims”), and releases us, our subsidiaries, and affiliated agents from all Claims. The settlement is not an admission of liability, nor do we concede or validate any of the claims asserted against us.
Previous report
Under the Settlement Agreement, we paid$7,750, into an escrow fund, on June 12, 2024 and agreed to pay two $5,000 contingent payments subject to certain financial contingencies on or before December 31, 2027 (collectively, the “Settlement Amount”). The contingent payments may be accelerated under certain circumstances. We recognized an expense of$17,750 in the nine months ended September 30, 2024.
Previous report
In addition, we agreed to make certain changes to our business practices and emphasize certain practices that have been a part of Douglas Elliman’s longstanding policies and practices, including: reminding our brokerages and agents that we have no rule requiring agents to make or accept offers of compensation; requiring our brokerages and agents to clearly disclose to clients that commissions are not set by law and are fully negotiable; prohibiting our brokerages and buyer agents from claiming buyer agent services are free; requiring our brokerages and agents to disclose to the buyer the listing broker’s offer of compensation for prospective buyers’ agents as soon as possible; prohibiting our brokerages and agents from using any technology (or manual methods) to sort listings by offers of compensation, unless requested by the client; reminding our brokerages and agents of their obligation to show properties regardless of compensation for buyers’ agents for properties that meet the buyer’s priorities; and developing training materials for our brokerages and agents that support all the practice changes outlined in the injunctive relief.
Previous report
Update on Expense Reduction. Since June 2022, our operating results have been negatively impacted by a reduction of revenues from existing home sales caused, in part, by lower listing inventory and the volatility in the financial markets as well as increases in mortgage rates. As a result, during 2023 and 2024, we have endeavored to adjust our cost structure to better fit our business, including through, among other things, reductions in personnel and incentive compensation expense, eliminating certain corporate sponsorship events, streamlining advertising expenditures and beginning a process of consolidating offices as leases expire. These efforts have been undertaken to increase the efficiency of our operations without significantly impacting the agent experience.
Previous report
During the nine months ended September 30, 2024, our real estate brokerage segment reduced its operating expenses, excluding commissions, litigation settlement, restructuring expenses and non-cash stock compensation expenses by approximately $11,900 (5.9%) as compared to the corresponding period in 2023. These reductions during the nine months ended September 30, 2024 included approximately $11,900 of general and administrative expenses.
Previous report
In 2023, we actively executed expense reduction programs that reduced expenses in our business, including our headcount by approximately 100 employees in 2023. These programs are continuing in 2024. In addition, in the second quarter of 2024, a lease on property used by one of our subsidiaries expired and it has moved its operations to a new location resulting in an approximate $4,000 reduction in annual occupancy costs on an ongoing basis.
Previous report
Revenues. Our revenues were $266,316 for the three months ended September 30, 2024 compared to $251,548 for the three months ended September 30, 2023. The $14,768 increase in revenues was primarily due to increases in commission and other brokerage revenues which primarily related to increases in commissions from existing home sales and development marketing.
Previous report
Operating expenses. Our operating expenses were $273,747 for the three months ended September 30, 2024 compared to $260,369 for the three months ended September 30, 2023. The increase of $13,378 was due primarily to an increase in real estate agent commissions of $13,288 arising primarily from increases in commissions and other brokerage revenue partially offset by declines in general and administrative expenses.
Previous report
Operating loss. Operating loss was $7,431 for the three months ended September 30, 2024 compared to $8,821 for the same period in 2023. The $1,390 decline in operating loss was due to the net impact of increases in commission and other brokerage revenues partially offset by the increases in operating expenses.
Previous report
Other (losses) income. Other losses was $20,018 for the three months ended September 30, 2024 compared to income of $1,822 for the three months ended September 30, 2023. For the three months ended September 30, 2024, other losses primarily consisted of the change in fair value of embedded derivative of $20,166, interest expense of $1,461, primarily associated with the debt issuance, and investment and other losses, primarily associated with our PropTech investments of $4. This was offset by interest income of $1,551 and equity in earnings from equity method investments of $62.
Previous report
Income tax expense (benefit). Income tax expense was $0 compared to income tax benefit of $1,869 for the three months ended September 30, 2024 and 2023, respectively.
Previous report
Real Estate Brokerage.
Previous report
The following table sets forth our condensed consolidated statements of operations data for the Real Estate Brokerage segment for the three months ended September 30, 2024 compared to the three months ended September 30, 2023:
Previous report
Revenues. Our revenues were $266,316 for the three months ended September 30, 2024 compared to $251,548 for the three months ended September 30, 2023. The increase of $14,768 was primarily related to an increase in our commission and other brokerage income, as a result of an increase in commissions from existing home sales and development marketing. The increase in revenues was driven by an increased average price per transaction of $1.61 million per homesale in three months ended September 30, 2024 compared to $1.57 million per homesale in the comparable 2023 period.
Previous report
Operating Expenses. Our operating expenses were $265,862 for the three months ended September 30, 2024 compared to $253,540 for the three months ended September 30, 2023, an increase of $12,322, due primarily to increases in real estate brokerage commissions, partially offset by reductions in general and administrative and technology expenses. The primary components of operating expenses are described below.
Previous report
Real Estate Agent Commissions. As a result of increases in our commissions and other brokerage income, our real estate agent commissions expense was $199,133 for the three months ended September 30, 2024 compared to $185,845 for the three months ended September 30, 2023. Real estate agent commissions expense, as a percentage of revenues, increased to 74.8% for the three months ended September 30, 2024 compared to 73.9% for the three months ended September 30, 2023.
Previous report
Operations and support. Operations and support expenses were $18,774 for the three months ended September 30, 2024 compared to $17,121 for the three months ended September 30, 2023. The increase is primarily related to higher professional fees in the 2024 period.
Previous report
Technology. Technology expenses were $6,025 for the three months ended September 30, 2024 compared to $5,602 for the three months ended September 30, 2023. The increase resulted from continued expense reduction efforts in 2024, which included the negotiation of existing licensing agreements in an effort to improve our technology efficiency.
Previous report
Operating income (loss)Operating income was $454 for the three months ended September 30, 2024 compared to operating loss of $1,992 for the three months ended September 30, 2023. The increase in operating income is primarily associated with the net impact of increased commission and other brokerage revenues and partially offset by increases in operating expenses.
Previous report
Corporate and Other.
Previous report
Corporate and Other loss. The operating loss at the Corporate and Other segment was $7,885 for the three months ended September 30, 2024 compared to $6,829 for the three months ended September 30, 2023. The increase was primarily attributable to increases in operating expenses.
Previous report
Nine months ended September 30, 2024 Compared to Nine months ended September 30, 2023
Previous report
The following table sets forth our revenue and operating loss by segment for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023:
Previous report
Revenues. Our revenues were $752,306 for the nine months ended September 30, 2024 compared to $741,442 for the nine months ended September 30, 2023. The $10,864 increase in revenues was primarily due to an increase in commissions and other brokerage income because of increased commissions from existing home sales.
Previous report
Operating expenses. Our operating expenses were $804,874 for the nine months ended September 30, 2024 compared to $782,368 for the nine months ended September 30, 2023. The increase of $22,506 was due primarily to the litigation settlement of $17,750 and increases in real estate brokerage commissions of $17,857 partially offset by a decline in other operating expenses of $13,101.
Previous report
Operating loss. Operating loss was $52,568 for the nine months ended September 30, 2024 compared to $40,926 for the nine months ended September 30, 2023. The $11,642 increase in operating loss was primarily due to the litigation settlement and the net impact of declines in commissions and other brokerage revenues partially offset by a decline in operating expenses.
Previous report
Other (loss) income. Other loss was $16,978 for the nine months ended September 30, 2024 compared to income of $4,226 for the nine months ended September 30, 2023. For the nine months ended September 30, 2024, other losses primarily consisted of the change in fair value of derivatives embedded within convertible debt of $20,166 associated with the issuance of the new financing debt, and interest expense of $1,475. This was partially offset by interest income of $3,989, $625 of investment and other income primarily associated with our PropTech investments, and equity earnings from equity method investments of $49.
Previous report
Income tax expense (benefit). Income tax expense was $1,368 for the nine months ended September 30, 2024 compared to income tax benefit of $8,552 for the nine months ended September 30, 2023.
Previous report
Real Estate Brokerage.
Previous report
The following table sets forth our condensed consolidated statements of operations data for the Real Estate Brokerage segment for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023:
Previous report
Revenues. Our revenues were $752,306 for the nine months ended September 30, 2024 compared to $741,442 for the nine months ended September 30, 2023. The increase of $10,864 was primarily related to an increase in our commission and other brokerage income. The increase in revenues was driven by an increased average price per transaction of $1.68 million per homesale in the nine months ended September 30, 2024 compared to $1.60 million per homesale in the comparable 2023 period.
Previous report
Our revenues from commission and other brokerage income were $714,652 for the nine months ended September 30, 2024 compared to $703,780 for the nine months ended September 30, 2023, an increase of $10,872. In 2024, our commission and other brokerage income generated from the sales of existing homes increased by $15,357 and this consisted of increases of $11,138 in our Florida market, $5,204 in the West region and $4,296 in the Northeast region, which excludes New York City; these increases were offset by declines of $5,281 in New York City. In addition, our revenues from Development Marketing declined by $4,485 in the 2024 period compared to the 2023 period.
Previous report
Operating Expenses. Our operating expenses were $784,191 for the nine months ended September 30, 2024 compared to $761,791 for the nine months ended September 30, 2023, an increase of $22,400, due primarily to the litigation settlement partially offset by declines in other operating expenses.
Showing the first 40 of 50 passages. Open the source sections for the rest.
Reworded paragraphs (32)
Previous wording
The following discussion should be read in conjunction with our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) and Audited Consolidated Financial Statements as of and for the year ended December 31, 2023 and Notes thereto, included in our 2023 Annual Report filed with the SEC, and our Condensed Consolidated Financial Statements and related Notes as of and for the quarterly period and nine months ended September 30, 2024. Any forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. Any forward-looking statements are subject to several important factors, including those factors discussed under “Risk Factors” in our 2023 Annual Report and this Quarterly Report and “Special Note on Forward-Looking Statements,” that could cause our actual results to differ materially from those indicated in such forward-looking statements.
Current wording
The following discussion should be read in conjunction with our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) and Audited Consolidated Financial Statements as of and for the year ended December 31, 2024 and Notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”), and our Condensed Consolidated Financial Statements and related Notes as of and for the quarterly period ended March 31, 2025. Any forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. Any forward-looking statements are subject to several important factors, including those factors discussed under “Risk Factors” in our 2024 Annual Report and this Quarterly Report and “Special Note on Forward-Looking Statements,” that could cause our actual results to differ materially from those indicated in such forward-looking statements. References to “Douglas Elliman” or “Company” refer to Douglas Elliman Inc. Certain references to “Douglas Elliman Realty” refer to the Company’s residential real estate brokerage business, including the operations of Douglas Elliman Realty, LLC and Douglas Elliman of California Inc., unless otherwise specified.
Previous wording
Real Estate Brokerage: the residential real estate brokerage services through our subsidiary Douglas Elliman Realty, which operates the largest residential brokerage company in the New York metropolitan area and also conducts residential real estate brokerage operations in Florida, California, Texas, Colorado, Nevada, Massachusetts, Connecticut, Maryland, Virginia and Washington, D.C.
Current wording
Douglas Elliman Realty operates the largest residential brokerage company in the New York metropolitan area and also conducts residential real estate brokerage operations in Florida, California, Texas, Colorado, Nevada, Massachusetts, Connecticut, Maryland, Virginia, Washington, D.C., Arizona, New Hampshire and Michigan. We also operate our investment business that invests in select PropTech opportunities through our New Valley Ventures subsidiary.
Previous wording
Three months ended September 30, 2024 Compared to the Three months ended September 30, 2023
Current wording
As a result, beginning in the first quarter of 2025, our business began to report our financial results as a single reportable segment. Presentation of our financial information for the three months ended March 31, 2025 and 2024, and year ended December 31, 2024 is reported as one segment. The accounting policies of the segment are the same as those described in the summary of significant accounting policies. Prior period information has been recast to conform to the current presentation.
Previous wording
(1)We calculate total transactions by taking the sum of all transactions closed in which our agent represented the buyer or seller in the purchase or sale of a home (excluding rental transactions). We include a single transaction twice when one or more of our agents represent both the buyer and seller in any given transaction.
Current wording
(1)We calculate total transactions by taking the sum of all transactions closed that our agent represented the buyer or seller in the purchase or sale of a home (excluding rental transactions). We include a single transaction twice when one or more of our agents represent both the buyer and seller in any given transaction.
Previous wording
Adjusted EBITDA attributed to Douglas Elliman is a non-GAAP financial measure that represents our net income adjusted for depreciation and amortization, investment and other income, stock-based compensation expense, benefit from income taxes, and other items. Adjusted EBITDA attributed to Douglas Elliman Margin is the quotient of (x) Adjusted EBITDA attributed to Douglas Elliman divided by (y) revenue. Last twelve months (“LTM”) financial measures are non-GAAP financial measures that are calculated by reference to the trailing four-quarter performance for the relevant metric.
Current wording
Adjusted EBITDA attributed to Douglas Elliman is a non-GAAP financial measure. Adjusted EBITDA attributed to Douglas Elliman Margin is the quotient of (x) Adjusted EBITDA attributed to Douglas Elliman divided by (y) revenue. Last twelve months financial measures are non-GAAP financial measures that are calculated by reference to the trailing four-quarter performance for the relevant metric.
Previous wording
We believe that Non-GAAP Financial Measures are important measures that supplement analysis of our results of operations and enhance an understanding of our operating performance. We believe Non-GAAP Financial Measures provide a useful measure of operating results unaffected by non-recurring items, differences in capital structures and ages of related assets among otherwise comparable companies. Management uses Non-GAAP Financial Measures as measures to review and assess operating performance of our business, and management and investors should review both the overall performance (GAAP net income) and the operating performance (Non-GAAP Financial Measures) of our business. While management considers 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, and net income. In addition, Non-GAAP Financial Measures are susceptible to varying calculations and our measurement of Non-GAAP Financial Measures may not be comparable to those of other companies.
Current wording
We believe that Non-GAAP Financial Measures are important measures that supplement analysis of our results of operations and enhance an understanding of our operating performance. We believe Non-GAAP Financial Measures provide a useful measure of operating results unaffected by non-recurring items, differences in capital structures and ages of related assets among otherwise comparable companies. Management uses Non-GAAP Financial Measures as measures to review and assess the operating performance of our business, and management and investors should review both the overall performance (GAAP net income) and the operating performance (Non-GAAP Financial Measures) of our business. While management considers 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, and net income. In addition, Non-GAAP Financial Measures are susceptible to varying calculations and our measurement of Non-GAAP Financial Measures may not be comparable to those of other companies.
Previous wording
Reconciliations of these non-GAAP measures are provided in the table below.
Current wording
Reconciliations of these non-GAAP measures are provided in the table below (in thousands).
Previous wording
(b)Represents equity in losses recognized from the Company’s investment in an equity method investment that is accounted for under the equity method and is not consolidated in the Company’s financial results.
Current wording
(b)Represents equity in (earnings) losses recognized from our investment in an equity method investment that is accounted for under the equity method and is not consolidated in our financial results.
Previous wording
The following table sets forth our revenue and operating income (loss) by segment for the three months ended September 30, 2024 compared to the three months ended September 30, 2023:
Current wording
The following table sets forth our revenue and operating loss for the three months ended March 31, 2025 compared to the three months ended March 31, 2024:
Previous wording
Our revenues from commission and other brokerage income were $254,074 for the three months ended September 30, 2024 compared to $239,255 for the three months ended September 30, 2023, an increase of $14,819. In the three months ended September 30, 2024, our commission and other brokerage income generated from the sales of existing homes increased by $6,939 in New York City, $1,143 in the Northeast region, which excludes New York City. This was partially offset by declines of $3,231 in the Florida market, and $740 in the West region. In addition, our revenues from Development Marketing increased by $10,708 in the 2024 period compared to the 2023 period and was primarily from an increase in closed sales in the Florida market.
Current wording
Our revenues from commission and other brokerage income totaled $241,143 for the three months ended March 31, 2025, compared to $188,265 for the three months ended March 31, 2024, representing an increase of $52,878. In 2025, our commission and other brokerage income from existing homes sales increased by $16,977 in New York City, $11,769 in the Florida market, $8,409 in the Northeast region (excluding New York City), and $1,143 in the West region. Additionally, our revenues from Development Marketing increased by $14,580, primarily related to the Florida market during the 2025 period compared to 2024.
Previous wording
Real Estate Agent Commissions. Our real estate agent commissions expense was $564,606 for the nine months ended September 30, 2024 compared to $546,749 for the nine months ended September 30, 2023, an increase of $17,857. Real estate agent commissions expense, as a percentage of revenues, increased to 75.1% for the nine months ended September 30, 2024 compared to 73.7% for the nine months ended September 30, 2023. The increase in real estate agent commissions expense as a percentage of revenue in the 2024 period was primarily driven by a higher percentage of our revenues was generated from locations (primarily Florida, California, Texas, Colorado and Nevada) which generally pay higher commission rates and a lower percentage of commission revenues derived from Development Marketing, which generally pays lower commission rates, during nine months ended September 30, 2024 compared to the prior year period.
Current wording
Real Estate Agent Commissions. As a result of increased commissions and other brokerage income, our real estate agent commissions expense was $186,525 for the three months ended March 31, 2025, compared to $149,016 for the three months ended March 31, 2024, representing an increase of $37,509, or 25.2%. Real estate agent commissions expense as a percentage of revenues decreased to 73.6% for the three months ended March 31, 2025, compared to 74.4% for the three months ended March 31, 2024. This decline was primarily driven by a higher percentage of commission revenues derived from the Development Marketing division as well as existing home sales in the New York City region, which generally pay lower commission rates than those generated in the Southeast (Florida) and West regions.
Previous wording
Sales and Marketing. Sales and marketing expenses were $19,240 for the three months ended September 30, 2024 compared to $20,770 for the three months ended September 30, 2023.
Current wording
Sales and Marketing. Sales and marketing expenses were $19,739 for the three months ended March 31, 2025, compared to $21,298 for the three months ended March 31, 2024.
Previous wording
Operations and support. Operations and support expenses were $55,572 for the nine months ended September 30, 2024 compared to $53,338 for the nine months ended September 30, 2023.
Current wording
Operations and support. Operations and support expenses were $17,728 for the three months ended March 31, 2025, compared to $18,799 for the three months ended March 31, 2024.
Previous wording
General and administrative. General and administrative expenses were $20,774 for the three months ended September 30, 2024 compared to $21,988 for the three months ended September 30, 2023. The decline is primarily related to reductions in personnel as well as lower incentive compensation expenses offset by higher professional fees.
Current wording
General and administrative. General and administrative expenses were $27,325 for the three months ended March 31, 2025, compared to $27,016 for the three months ended March 31, 2024.
Previous wording
Technology. Technology expenses were $17,301 for the nine months ended September 30, 2024 compared to $17,777 for the nine months ended September 30, 2023.
Current wording
Technology. Technology expenses were $5,535 for the three months ended March 31, 2025, compared to $5,843 for the three months ended March 31, 2024.
Previous wording
Loss before provision for income taxes. Loss before income taxes was $69,546 for the nine months ended September 30, 2024 and $36,700 for the nine months ended September 30, 2023.
Current wording
Loss before provision for income taxes. Loss before income taxes was $6,284 for the three months ended March 31, 2025, and $40,490 for the three months ended March 31, 2024.
Previous wording
Wecalculate our provision for income taxes based upon our estimate of the annual effective income tax rate based on full year projections and apply the annual effective income tax rate against year-to-date pretax income to record income tax expense, adjusted for discrete items, if any. During the nine months ended September 30, 2024, we analyzed the likelihood of utilizing our deferred tax assets and determined it will be more likely than not that the benefits of these deductible differences will not be realized, and as a result we established a valuation allowance for the full amount of the deferred tax assets. We refine annual estimates as current information becomes available.
Current wording
Wecalculate our provision for income taxes based upon our estimate of the annual effective income tax rate based on full year projections and apply the annual effective income tax rate against year-to-date pretax income to record income tax expense, adjusted for discrete items, if any. We did not record an income tax provision for the three months ending March 31, 2025 because we have established a valuation allowance for the full amount of the deferred tax assets. During the three months ending March 31, 2024, we analyzed the likelihood of utilizing our deferred tax assets and determined it will be more likely than not that the benefits of these deductible differences will not be realized, and as a result we established a valuation allowance for the full amount of the deferred tax assets and recorded a charge of $977. We refine annual estimates as current information becomes available.
Previous wording
As of September 30, 2024, New Valley Ventures had investments (at a carrying value) of approximately$13,037 in PropTech companies. This amounts to approximately 3% of the value of Douglas Elliman’s total assets, which totaled approximately $503 million, as of September 30, 2024.
Current wording
As of March 31, 2025, New Valley Ventures had investments (at a carrying value) of approximately$11,344 in PropTech companies. This amounts to approximately 2% of the value of Douglas Elliman’s total assets, which totaled approximately $494 million as of March 31, 2025.
Previous wording
Cash, cash equivalents and restricted cash increased by $27,746 to $157,263, which included $5,847 of restricted cash, during the nine months ended September 30, 2024 and by $37,493, which included restricted cash of $7,549, during the nine months ended September 30, 2023.
Current wording
Cash, cash equivalents and restricted cash increased by $3,164 to $145,385, which included $8,614 of restricted cash, during the three months ended March 31, 2025. This compares to a decrease of $29,449, to $100,068, which included restricted cash of $8,617, during the three months ended March 31, 2024.
Previous wording
Cash used in operations was $16,987 and $27,773 for the nine months ended September 30, 2024 and 2023, respectively. The decline in the cash used in the 2024 period was related to the receipt of income tax refunds and lower uses of working capital. This was partially offset by lower operating income in the nine months ended September 30, 2024.
Current wording
Cash used in operations was $5,617 for the three months ended March 31, 2025, compared to $27,291 for the three months ended March 31, 2024. The decline in the cash used in the 2025 period was attributable to a lower operating loss and favorable changes in working capital, primarily due to increases in other current liabilities. This was partially offset by the absence of income tax refunds and the $17,750 litigation settlement in the three months ended March 31, 2025.
Previous wording
Cash used in investing activities was $2,009 and $5,487 for the nine months ended September 30, 2024 and 2023, respectively. For the nine months ended September 30, 2024, cash used in investing activities was comprised of capital expenditures of $4,273 and the purchase of investments of $259 in our PropTech business. This was offset by $2,523 of distributions from our investments in equity securities. For the nine months ended September 30, 2023, cash used in investing activities was comprised of capital expenditures of $5,380, and purchase of investments of $515 in our PropTech business. This was offset by $408 of distributions from our investments in equity securities.
Current wording
Cash provided by investing activities was $8,781 for the three months ended March 31, 2025, compared to cash used in investing activities of $2,158 for the three months ended March 31, 2024. For the three months ended March 31, 2025, cash provided by investing activities was comprised of the proceeds from sale of short-term investments of $54,416 and proceeds from the sale of investments of $78 in our PropTech business. These inflows were partially offset by the purchase of short-term investments of $44,612, long-term investments of $67, and capital expenditures of $1,034. For the three months ended March 31, 2024, cash used in investing activities was comprised of capital expenditures of $2,081 and the purchase of investments of $85 in our PropTech business. This was partially offset by distributions of $8 from our investments in equity securities.
Previous wording
Our investment philosophy is to maximize return on investments using a reasonable expectation for return when investing in equity-method investments and PropTech investments as well as making capital expenditures.
Current wording
Our investment philosophy is to maximize return on investments by seeking reasonable expectations for return when investing in equity-method investments and PropTech investments, as well as when making capital expenditures.
Previous wording
Real Estate Brokerage Litigation. On April 26, 2024, we entered into a settlement agreement to resolve all claims on a nationwide basis in the pending class action litigations, Gibson v. NAR, No. 4:23-cv-00788-SRB (W.D. Mo.)and Umpa v. NAR, 4:23-cv-00945-SRB (W.D. Mo.) alleging claims on behalf of sellers against Douglas Elliman Inc. and our subsidiaries. Under the settlement agreement, the Company paid $7,750 into an escrow fund on June 12, 2024, and agreed to pay two $5,000 contingent payments subject to certain financial contingencies on or before December 31, 2027 (collectively, the “Settlement Amount”). The contingent payments may be accelerated under certain circumstances. The Company recognized an expense of$17,750 for the nine months ended September 30, 2024. Litigation is subject to uncertainty and it is possible that there could be adverse developments in other pending cases or that more cases, including antitrust lawsuits, could be concerned.
Current wording
Real Estate Brokerage Litigation. On April 26, 2024, we entered into a settlement agreement to resolve all claims on a nationwide basis in the pending class action litigations, Gibson v. NAR, No. 4:23-cv-00788-SRB (W.D. Mo.)and Umpa v. NAR, 4:23-cv-00945-SRB (W.D. Mo.) alleging claims on behalf of sellers against Douglas Elliman Inc. and our subsidiaries. Under the settlement agreement, we agreed to pay $7,750 within 30 business days of preliminary approval of the settlement by the court, as well as two $5,000 contingent payments subject to certain financial contingencies through December 31, 2027.
Previous wording
Management cannot predict the cash requirements related to any future settlements or judgments, including cash required to bond any appeals, and there is a risk that those requirements will not be able to be met. Management is unable to make a reasonable estimate of the amount or range of loss that could result from an unfavorable outcome of the cases pending against the real estate brokerage segment or the costs of defending such cases. It is possible that our consolidated financial position, results of operations or cash flows in any future period could be materially adversely affected by an unfavorable outcome in any such brokerage-related litigation.
Current wording
Management cannot predict the cash requirements related to any future settlements or judgments, including cash required to bond any appeals, and there is a risk that those requirements will not be able to be met. Management is unable to make a reasonable estimate of the amount or range of loss that could result from an unfavorable outcome of the cases pending against our business or the costs of defending such cases. It is possible that our consolidated financial position, results of operations or cash flows in any future period could be materially adversely affected by an unfavorable outcome in any such litigation. For more information, see Note 8. “Contingencies” to our condensed consolidated financial statements.
Previous wording
We had cash and cash equivalents of approximately $151,416 as of September 30, 2024 and, in addition to any cash provided from operations, such cash is available to be used to fund such liquidity requirements as well as other anticipated liquidity needs in the normal course of business. Management currently anticipates that these amounts, as well as expected cash flows from our operations and proceeds from any financings to the extent available, should be sufficient to meet our liquidity needs over the next twelve months. We may acquire or seek to acquire additional operating businesses through a merger, purchase of assets, stock acquisition or other means, or to make or seek to make other investments, which may limit our liquidity otherwise available.
Current wording
We had cash and cash equivalents of approximately $136,771 as of March 31, 2025 and, in addition to any cash provided from operations, such cash is available to be used to fund such liquidity requirements as well as other anticipated liquidity needs in the normal course of business. Management currently anticipates that these amounts, together with expected cash flows from our operations and proceeds from any available financings, should be sufficient to meet our liquidity needs over the next twelve months. We may acquire or seek to acquire additional operating businesses through mergers, asset purchases, stock acquisitions, or other means, or pursue other investments, which could limit the liquidity otherwise available to us.
Previous wording
On July 2, 2024, we issued $50,000 in aggregate principal amount of Convertible Notes due 2029. The Convertible Notes bear interest at a rate of 7.0% per annum, payable in cash, or, at our election, 8.0% per annum paid in kind, due semi-annually. See Note 7 Notes Payable for more information concerning our Convertible Notes.
Current wording
On July 2, 2024, we issued Convertible Notes due 2029 in the aggregate principal amount of $50,000. The Convertible Notes bear interest at a rate of 7.0% per annum, payable in cash, or, at our election, 8.0% per annum paid in kind, due semi-annually. For more information, see Note 7. “Notes Payable and Other Obligations” to our condensed consolidated financial statements.
Previous wording
As of September 30, 2024, we had outstanding approximately $3,000 of letters of credit, collateralized by certificates of deposit. The letters of credit have been issued as security deposits for leases of office space, to secure the performance of our subsidiaries under various insurance programs and to provide collateral for various subsidiary borrowing and capital lease arrangements.
Current wording
As of March 31, 2025, we had outstanding approximately $2,990 of letters of credit, which are collateralized by certificates of deposit. The letters of credit have been issued as security deposits for leases of office space.
Previous wording
As a service to its customers, Portfolio Escrow Inc., a subsidiary of the Company, administers escrow and trust deposits which represent undisbursed amounts received for the settlement of real estate transactions. Deposits at FDIC-insured institutions are insured up to $250. The escrow funds on deposit at the subsidiary were $36,061 and $41,338 as of September 30, 2024 and December 31, 2023, respectively, and corresponding escrow funds in holding of the same amount. While these deposits are not assets of the Company (and, therefore, are excluded from the accompanying condensed consolidated balance sheets), the subsidiary of the Company remains contingently liable for the disposition of these deposits.
Current wording
As a service to its customers, Portfolio Escrow Inc., a subsidiary of Douglas Elliman, administers escrow and trust deposits which represent undisbursed amounts received for the settlement of real estate transactions. Deposits at FDIC-insured institutions are insured up to $250. Portfolio Escrow Inc. had escrow funds on deposit in the amount of $30,043 and $37,967 as of March 31, 2025 and December 31, 2024, respectively, and corresponding escrow funds in holding of the same amount. These deposits are not assets of Portfolio Escrow Inc., the subsidiary of Douglas Elliman (and, therefore, are excluded from the accompanying condensed consolidated balance sheets).
Previous wording
•severe weather events or natural or man-made disasters, including the increasing severity or frequency of such events due to climate change or otherwise, or other catastrophic events that may disrupt our business and have an unfavorable impact on home sale activity,
Current wording
•effects of industry competition, severe weather events or natural or man-made disasters, including the increasing severity or frequency of such events due to climate change or otherwise, or other catastrophic events that may disrupt our business and have an unfavorable impact on home sale activity,
Previous wording
•the additional factors described under “Risk Factors” in our 2023 Annual Report filed with the SEC as updated in this report.
Current wording
•the additional factors described under “Risk Factors” in our 2024 Annual Report filed with the Securities and Exchange Commission as updated in this report.
Previous wording
Further information on the risks and uncertainties to our business includes the risk factors discussed above in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and under Item 1A, “Risk Factors” in our 2023 Annual Report filed with the SEC and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024.
Current wording
Further information on the risks and uncertainties to our business includes the risk factors discussed above in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and under Item 1A, “Risk Factors” in our 2024 Annual Report filed with the Securities and Exchange Commission.
Previous wording
Although we believe the expectations reflected in these forward-looking statements are based on reasonable assumptions, there is a risk that these expectations will not be attained and that any deviations will be material. The forward-looking statements speak only as of the date they are made, and we undertake no obligation to update any of these statements to reflect events or circumstances occurring after the date of this report. New factors may emerge, and it is not possible to predict all of the factors that may affect our business and operations.
Current wording
Although we believe the expectations reflected in these forward-looking statements are based on reasonable assumptions, there is a risk that these expectations will not be attained and that any deviations will be material. The forward-looking statements speak only as of the date they are made.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Litigation is subject to uncertainty and it is possible that there could be adverse developments in pending and other cases, including antitrust lawsuits.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Corporate and other: the operations of our holding company as well as our investment business that invests in select PropTech opportunities through our New Valley Ventures subsidiary.
Previous report — wording carried elsewhere
See Note 8 - “Contingencies” to our condensed consolidated financial statements.
Previous report — wording carried elsewhere
Loss before provision for income taxes. Loss before income taxes was $27,449 and $6,999 for the three months ended September 30, 2024 and 2023, respectively.
Previous report — wording carried elsewhere
Wecalculate our provision for income taxes based upon our estimate of the annual effective income tax rate based on full year projections and apply the annual effective income tax rate against year-to-date pretax income to record income tax expense, adjusted for discrete items, if any. We refine annual estimates as current information becomes available.