Douglas Elliman Inc.

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, 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 three and nine months ended September 30, 2025. Any forward-looking statements are not historical facts, but rather they 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.

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, 2025 and Notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report”), and our Condensed Consolidated Financial Statements and related Notes as of and for the three months ended March 31, 2026. Any forward-looking statements are not historical facts, but rather they 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 2025 Annual Report and this Quarterly Report and “Special Note Regarding 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

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., and New Jersey. We also operate our investment business that invests in select PropTech opportunities through our DOUG Ventures (f/k/a New Valley Ventures LLC)subsidiary.

Current wording

We conduct residential real estate brokerage services through our subsidiary, Douglas Elliman Realty, which operates one of the largest residential brokerage companies in the New York metropolitan area and also conducts residential real estate brokerage operations in Florida, California, Texas, Colorado, Nevada, Massachusetts, Connecticut, Maryland, Virginia, New Jersey and Washington D.C. We also offer, including through our subsidiaries and ventures, development marketing services (“Development Marketing”) and ancillary services, such as mortgage, title and escrow services. In addition, we have also invested in PropTech opportunities through our DOUG Ventures subsidiary.

Previous wording

In addition to our financial results, we use the following business metrics to evaluate our business and identify trends affecting our business. To evaluate our operating performance, we also use Adjusted EBITDA attributed to Douglas Elliman, Adjusted EBITDA attributed to Douglas Elliman Margin and financial measures for the last twelve months ended September 30, 2025 (“Non-GAAP Financial Measures”), which are financial measures not prepared in accordance with GAAP.

Current wording

In addition to our financial results, prepared in accordance with U.S. GAAP, we use the following business metrics to evaluate our business and identify trends affecting our business. To evaluate our operating performance, we also use Adjusted EBITDA attributed to Douglas Elliman Inc., Adjusted EBITDA margin attributed to Douglas Elliman Inc. and financial measures for the last twelve months ended March 31, 2026 (“Non-GAAP Financial Measures”), which are financial measures not prepared in accordance with U.S. GAAP.

Previous wording

Adjusted EBITDA attributed to Douglas Elliman is a non-GAAP financial measure that represents our net income adjusted

Current wording

Adjusted EBITDA attributed to Douglas Elliman Inc. is a non-GAAP financial measure that represents net income (loss) attributed to Douglas Elliman Inc. adjusted for income tax expense, depreciation and amortization expense, stock-based compensation expense, gain on disposal of the Douglas Elliman Property Management (“DEPM”) business (including the operations of DEPM and related corporate overhead prior to its disposal), impairment of fixed assets, litigation, settlement and related expenses, net, executive severance and separation expenses, restructuring and other items (interest expense, interest income, equity in earnings (losses) from equity-method investments, change in fair value of the derivative embedded within convertible debt, loss on extinguishment of liability and investment and other (losses) gains). Adjusted EBITDA margin attributed to Douglas Elliman Inc. is the quotient of (x) Adjusted EBITDA attributed to Douglas Elliman Inc. 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 the operating performance of our business, and management and investors should review both the overall performance (GAAP net income/loss) 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/loss, and net income/loss. 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 (loss)) 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 U.S. GAAP, such as operating income (loss), and net income (loss). 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 (in thousands).

Current wording

Reconciliations of these non-GAAP measures have been provided in the table below (in thousands).

Previous wording

Computation of Adjusted EBITDA attributed to Douglas Elliman

Current wording

Computation of Adjusted EBITDA attributed to Douglas Elliman Inc.

Previous wording

(a)Represents amortization of stock-based compensation. For the last twelve months ended September 30, 2025,$1,103 of stock-based compensation is included within General and administrative expenses and$1,075 is included within Operations and support expenses on the condensed consolidated statements of operations. For the nine months ended September 30, 2025,$5,517 of stock-based compensation is included within General and administrative expenses and$804 is included within Operations and support expenses on the condensed consolidated statements of operations. For the nine months ended September 30, 2024,$9,924 of stock-based compensation is included within General and administrative expenses and$793 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 wording

(b)Represents amortization of stock-based compensation. For the last twelve months ended March 31, 2026,$6,867 of stock-based compensation is included within General and administrative expenses and$843 is included within Operations and support expenses on the condensed consolidated statements of operations. For the three months ended March 31, 2026,$1,099 of stock-based compensation is included within General and administrative expenses and$69 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 year ended December 31, 2025,$7,538 of stock-based compensation is included within General and administrative expenses and$1,039 is included within Operations and support expenses on the consolidated statements of operations.

Previous wording

(b)Represents equity in (earnings) losses recognized from equity method investment that is accounted for under the equity method and is not consolidated in our financial results.

Current wording

(c)Represents equity in earnings recognized from equity-method investments that are accounted for under the equity method and are not consolidated in our financial results.

Previous wording

(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 nine months ended September 30, 2025,$19,343 and$8,713, net of amounts recovered from insurance, are included within General and administrative expenses on the condensed consolidated statements of operations, respectively. For the nine months ended September 30, 2024, we incurred such expenses of$22,703 with $17,750 being included in Antitrust litigation settlement expense,$3,222 being included in General and administrative expenses and$1,731 being included in Operations and support expenses, in the condensed consolidated statement of operations. For the year ended December 31, 2024, we incurred unusual litigation expense, settlement and related expenses, net of $33,333 with $17,750 being included in Antitrust litigation settlement expense and $15,583 being included in General and administrative expenses on the consolidated statement of operations.

Current wording

(d)Represents unusual litigation, settlement and related expenses, net, 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, 2026,$9,590 and$3,851, net of amounts recovered from insurance, are included within General and administrative expenses on the condensed consolidated statements of operations, respectively. For the three months ended March 31, 2025, we incurred such expenses of$1,898, which is included within General and administrative expenses on the condensed consolidated statements of operations. For the year ended December 31, 2025, we incurred such expenses of $7,637, which is included within General and administrative expenses on the consolidated statements of operations.

Previous wording

(d) For the last twelve months and nine months ended September 30, 2025, expense of$1,517 and benefit of $493, net of amounts recovered from insurance, 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 wording

(e) For the last twelve months ended March 31, 2026, benefit of$709, net of amounts recovered from insurance, are included within General and administrative expenses on the condensed consolidated statement of operations. For the three months ended March 31, 2025, $410 is included within General and administrative expenses on the condensed consolidated statements of operations. For the year ended December 31, 2025, the benefit of $299 includes insurance proceeds received and is included within General and administrative expenses on the consolidated statement of operations.

Previous wording

The following discussion provides an assessment of our results of operations, capital resources and liquidity and should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this report.

Current wording

The following discussion provides an assessment of our results of operations, capital resources and liquidity and should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Form 10-Q.

Previous wording

•General and administrative. General and administrative expenses consist 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 and nine months ended September 30, 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 wording

•General and administrative. General and administrative expenses consist primarily of compensation, stock-based compensation expense and other personnel-related costs for administrative employees, including executives, finance and accounting, legal, human resources and communications, property management (prior to October 25, 2025) and escrow services as well as the occupancy costs for our headquarters and other offices supporting our administrative functions.

Previous wording

•Technology. Technology expenses consist 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 wording

•Technology. Technology expenses consist 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, technology data licenses and other related expenses associated with the implementation of our technology initiatives.

Previous wording

As discussed previously, 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 and nine months ended September 30, 2025 and 2024 will be reported as one segment. For more information, see Note 11, “Segment Information” to our condensed consolidated financial statements.

Current wording

The presentation of our business’s financial information for the three months ended March 31, 2026 and 2025 is reported as one segment. For more information, see Note 11, “Segment Information” to our condensed consolidated financial statements.

Previous wording

Revenues. Our revenues were $262,838 for the three months ended September 30, 2025 compared to $266,316 for the three months ended September 30, 2024. The $3,478 decline in revenues was primarily due to lower commissions and other brokerage income, which was driven by decreased existing home sales and revenues from our Development Marketing division compared to the 2024 period. In the third quarter of 2025, our results continued to be negatively impacted by economic pressures, which were driven by geopolitical uncertainties, including global economic policies, as well as industry-specific headwinds related to the continuation of elevated mortgage rates, when compared to recent history.

Current wording

Revenues. Our revenues were $214,333 for the three months ended March 31, 2026 compared to $253,403 for the three months ended March 31, 2025. The $39,070 decline in revenues was primarily due to lower commissions and other brokerage income, which was driven by decreased existing home sales and revenues from our Development Marketing division compared to the 2025 period as well as the absence of revenues from our property management division, which was sold in October 2025. Excluding our property management revenues for 2025, our revenues were $214,333 and $243,911 for the periods ended March 31, 2026 and 2025, respectively. Our results for three months ended March 31, 2026 continued to be negatively impacted by economic pressures, which were driven by geopolitical uncertainties, as well as industry-specific headwinds related to the continuation of elevated mortgage rates, when compared to recent history.

Previous wording

Our revenues from commission and other brokerage income were $250,354 for the three months ended September 30, 2025 compared to $254,074 for the three months ended September 30, 2024, a decline of $3,720. In the three months ended September 30, 2025, our commission and other brokerage income generated from the sales of existing homes decreased by $5,380 in New York City and $5,603 in the Florida market. Additionally, our revenues from Development Marketing declined by $478. This was partially offset by an increase in revenues in the Northeast region of $4,818 and the West region of $2,923 in the 2025 period compared to the 2024 period.

Current wording

Our revenues from commissions and other brokerage income were $211,881 for the three months ended March 31, 2026 compared to $241,143 for the three months ended March 31, 2025, a decline of $29,262. In the three months ended March 31, 2026, our commissions and other brokerage income generated from the sales of existing homes decreased by $14,726 in New York City, $7,610 in the West region and $3,744 in the Northeast region. Additionally, our revenues from Development Marketing declined by $7,121. These decreases were partially offset by a $3,865 increase in revenues for existing home sales in the Florida market for the 2026 period compared with the 2025 period.

Previous wording

Operating expenses. Our operating expenses were $273,493 for the three months ended September 30, 2025 compared to $273,747 for the three months ended September 30, 2024. The decline of $254 was due primarily to declines in real estate brokerage commissions of $6,362 arising primarily from declines in commissions and other brokerage income as well as improved margins on certain Development Marketing projects. These amounts were partially offset by an increase in general and administrative expenses of $3,561 primarily due to increases in legal and personnel expenses.

Current wording

Operating expenses. Our operating expenses were $231,844 for the three months ended March 31, 2026 compared to $258,752 for the three months ended March 31, 2025. The decline of $26,908 was due primarily to a decline in real estate brokerage commissions expense of $19,134 arising primarily from declines in commissions and other brokerage income as well as the absence of expenses from our property management division. Excluding our property management expenses for 2025, our operating expenses were $231,844 and $251,141 for the periods ended March 31, 2026 and 2025, respectively.

Previous wording

Real Estate Agent Commissions. As a result of declines in our commissions and other brokerage income, as well as a decline in our commission expense as a percentage of revenues, our real estate agent commissions expense was $192,771 for the three months ended September 30, 2025 compared to $199,133 for the three months ended September 30, 2024, representing a decline of $6,362. Real estate agent commissions expense, as a percentage of revenues, decreased to 73.3% for the three months ended September 30, 2025 compared to 74.8% for the three months ended September 30, 2024. This percentage decline was primarily driven by improved margins from our Development Marketing division in the 2025 period.

Current wording

Real Estate Agent Commissions. As a result of a decline in our commissions and other brokerage income, our real estate agent commissions expense was $167,391 for the three months ended March 31, 2026 compared to $186,525 for the three months ended March 31, 2025, representing a decline of $19,134. Real estate agent commissions expense, as a percentage of revenues, increased to 78.1% for the three months ended March 31, 2026 compared to 73.6% (76.5% excluding property management revenues) for the three months ended March 31, 2025. The increase in real estate agent commissions expense as a percentage of revenue in the 2026 period was primarily driven by a lower percentage of commission revenues derived from

Previous wording

Gross profit. We define gross profit as the remaining portion after real estate agent commissions are subtracted from our revenues. Gross profit was $70,067 for the three months ended September 30, 2025, compared to $67,183 for the three months ended September 30, 2024. The increase primarily resulted from our Development Marketing division, in which sales of developer-represented units for the three months ended September 30, 2025 contributed to an increased gross profit.

Current wording

Gross profit. We define gross profit as the remaining portion after real estate agent commissions are subtracted from our revenues. Gross profit was $46,942 for the three months ended March 31, 2026, compared to $66,878 for the three months ended March 31, 2025. The decline was primarily due to the absence of property management revenues in 2026, as well as lower commissions and other brokerage income for the three months ended March 31, 2026 as compared to the 2025 period. The decline was also impacted by the higher real estate agent commissions expense as percentage of revenues for the three months ended March 31, 2026 discussed in Real Estate Agent Commissions.

Previous wording

Operating loss. Operating loss was $10,655 for the three months ended September 30, 2025 compared to $7,431 for the same period in 2024. The $3,224 increase in operating loss was primarily due to an increase in general and administrative expenses of $3,561, which was primarily due to increases in legal and personnel expenses, and was partially offset by improved gross profit of $2,884 during the three months ended September 30, 2025.

Current wording

Operating loss. Operating loss was $17,511 for the three months ended March 31, 2026 compared to $5,349 for the same period in 2025. The $12,162 increase in operating loss was primarily due to the decline in gross profit from our brokerage business of $10,444 and the absence of our property management division of $2,015 during the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Previous wording

Other income (expenses). Other expense was $14,276 for the three months ended September 30, 2025 compared to other expense of $20,018 for the three months ended September 30, 2024. For the three months ended September 30, 2025, other expense primarily consisted of the $15,445 loss from change in the fair value of the derivative embedded within convertible debt, partially offset by the $1,225 gain from the monetization of our remaining interest in Bilt Technologies in July 2025. For the three months ended September 30, 2024, other expense primarily consisted of the $20,166 loss from the change in fair value of derivative embedded within convertible debt.

Current wording

Other income (expenses). Other income was $1,235 for the three months ended March 31, 2026 compared to other expenses of $935 for the three months ended March 31, 2025. For the three months ended March 31, 2026, other income consisted primarily of interest income of $890. For the three months ended March 31, 2025, other expenses primarily consisted of interest expense of $1,530, a $746 loss from the change in 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.

Previous wording

Loss before provision for income taxes. Loss before income taxes was $24,931 and $27,449 for the three months ended September 30, 2025 and 2024, respectively.

Current wording

Loss before provision for income taxes. Loss before income taxes was $16,276 and $6,284 for the three months ended March 31, 2026 and 2025, respectively.

Previous wording

Income tax expense. Income tax expense was $11 for the three months ended September 30, 2025. There was no income tax expense for the three months ended September 30, 2024. Wecalculate our provision for income taxes for interim reporting periods based upon our estimate of the annual effective income tax rate based on full year projections, which does not include the impact of discrete items. We then apply the annual effective income tax rate against year-to-date pretax income to record income tax expense and then adjust our provision for income tax expense for any discrete items. Because we had established a full valuation allowance against our deferred tax assets as each of September 30, 2024 and September 30, 2025, there were no discrete items for either the three months ended September 30, 2025 or 2024.

Current wording

Income tax expense. There was no income tax expense for the three months ended March 31, 2026 and 2025. Wecalculate our provision for income taxes for interim reporting periods based upon our estimate of the annual effective income tax rate based on full year projections, which does not include the impact of discrete items. We then apply the annual effective income tax rate against year-to-date pretax income to record income tax expense and then adjust our provision for income tax expense for any discrete items. There were no discrete items for the three months ended March 31, 2026 and 2025.

Previous wording

Cash, cash equivalents and restricted cash increased by $8,686 to $150,907, which included $7,904 of restricted cash, during the nine months ended September 30, 2025. This compares to an increase of $27,746, to $157,263, which included restricted cash of $5,847, during the nine months ended September 30, 2024. The decline in the increase was primarily the result of the absence of proceeds from the convertible debt issuance and was partially offset by a decline in operating loss.

Current wording

Cash, cash equivalents and restricted cash declined by $19,733 to $102,976, which included $7,005 of restricted cash, during the three months ended March 31, 2026. This compares to an increase of $3,164, to $145,385, which included restricted cash of $8,614, during the three months ended March 31, 2025.

Previous wording

Cash provided by operations was $505 for the nine months ended September 30, 2025, compared to cash used in operations of $16,987 for the nine months ended September 30, 2024. The change in the cash activity from operations in the 2025 period was attributable to a reduction in operating loss and lower liability payments (primarily cash bonuses) in the 2025 period which were offset by the net impact of increased development marketing closings in 2025 as well as the absence of an income tax refund in the 2025 period.

Current wording

Cash used in operations was $19,342 for the three months ended March 31, 2026, compared to $5,617 for the three months ended March 31, 2025. The increase in the cash used in operations in the 2026 period was attributable to an increase in operating loss as well as increased payments of compensation and income tax liabilities in the 2026 period.

Previous wording

Cash provided by investing activities was $8,266 for the nine months ended September 30, 2025, compared to cash used in investing activities of $2,009 for the nine months ended September 30, 2024. For the nine months ended September 30, 2025, cash provided by investing activities was comprised of the proceeds from sale of short-term investments of $97,677 and proceeds from the sale of investments of $1,611 in our PropTech business. These inflows were partially offset by the purchase of short-term investments of $87,873, long-term investments of $108, and capital expenditures of $3,041. 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 long-term investments of $259 in our PropTech business. This was offset by $2,523 of distributions from our investments in equity securities.

Current wording

Cash used in investing activities was $391 for the three months ended March 31, 2026, compared to cash provided by investing activities of $8,781 for the three months ended March 31, 2025. For the three months ended March 31, 2026, cash used in investing activities was comprised primarily of capital expenditures of $259 and the purchase of subsidiaries of $100 due to the acquisition of Real Estate Associates of Houston LLC. For the three months ended March 31, 2025, cash provided by investing activities was comprised of proceeds from the sale of short-term investments of $54,416 and was partially offset by the purchase of short-term investments of $44,612.

Previous wording

We continue to evaluate our capital structure and current market conditions related to our capital structure. We regularly review and evaluate potential acquisitions, joint ventures, divestitures, and other strategic transactions. For example, 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, the repurchase of our common stock in open market transactions. These initiatives may limit our liquidity otherwise available.

Current wording

We continue to evaluate our capital structure and current market conditions related to our capital structure. We regularly review and evaluate potential acquisitions, joint ventures, divestitures and other strategic transactions. For example, 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, the repurchase of our common stock in open market transactions. These initiatives may limit liquidity otherwise available to us.

Previous wording

We had cash and cash equivalents of approximately $143,003 as of September 30, 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.

Current wording

We had cash and cash equivalents of approximately $95,971 as of March 31, 2026 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.

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, 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. On July 15, 2025, all of the Lutz plaintiffs’ claims against us were dismissed. The federal antitrust claim was dismissed with prejudice, and the state antitrust, consumer protection, and unjust enrichment claims were dismissed without prejudice with 21 days to replead. The Lutz plaintiffs filed their Third Amended Complaint on August 5, 2025, which we moved to dismiss.

Current wording

Real Estate Brokerage Antitrust Litigation Settlements. On April 26, 2024, we entered into a settlement agreement to resolve all claims on a nationwide basis in the pending seller 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. That settlement agreement is currently being challenged on appeal in the U.S. Court of Appeals for the Eighth Circuit. Under the settlement agreement, we paid $7,750 and $5,000 into an escrow fund on June 12, 2024 and December 29, 2025, respectively, and have also agreed to pay $5,000 contingent payment subject to certain financial contingencies on or before December 31, 2027. The remaining contingent payment may be accelerated under certain circumstances.

Previous wording

Litigation is subject to uncertainty and it is possible that there could be adverse developments in pending and other cases, including antitrust lawsuits.

Current wording

Other litigation. Litigation is subject to uncertainties and it is possible that there could be adverse developments in the Gibson/Umpa appeals, the buyer-side class action Lutz lawsuit, the Strougo lawsuit and other pending cases. These cases include cases related to two real estate sales persons formerly associated with us, who have been accused of sexual assault and related wrongdoing, where Douglas Elliman Inc., DER and our former Chief Executive Officer have been named as defendants (Koste et al vs. Alexander et alin the Supreme Court of the State of New York and Rodriguez vs. Alexander et al in the U.S. District Court for the Southern District of Florida). We deny liability and are vigorously defending claims made against us in the Koste and Rodriguez cases. For more information, see Note 8, “Commitments and Contingencies,” to our condensed consolidated financial statements.

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 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, “Commitments and Contingencies” to our condensed consolidated financial statements.

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 us or our subsidiaries as well as 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. For more information, see Note 8, “Commitments and Contingencies” to our condensed consolidated financial statements.

Previous wording

We have various agreements in which we may be obligated to indemnify the other party with respect to certain matters. Generally, these indemnification clauses are included in contracts arising in the normal course of business under which we customarily agree to hold the other party harmless against losses arising from a breach of representations related to certain matters as title to assets sold and licensed or certain intellectual property rights and, in connection with the sale of our property management division, certain known liabilities as of October 24, 2025. Payment by us under such indemnification clauses is generally conditioned on the other party making a claim that is subject to challenge by us and dispute resolution procedures specified in the particular contract. Further, our obligations under these arrangements may be limited in terms of time and/or amount, and in some instances, we may have recourse against third parties for certain payments made by us. It is not possible to predict the maximum potential number of future payments under these indemnification agreements due to the conditional nature of our obligations and the unique facts of each particular agreement. Historically, payments made by us under these agreements have not been material. As of September 30, 2025, we were not aware of any indemnification agreements that would or are reasonably expected to have a current or future material adverse impact on our financial position, results of operations or cash flows.

Current wording

We have various agreements in which we may be obligated to indemnify the other party with respect to certain matters. Generally, these indemnification clauses are included in contracts arising in the normal course of business under which we customarily agree to hold the other party harmless against losses arising from a breach of representations related to such matters as title to assets sold and licensed or certain intellectual property rights and, in connection with the sale of our property management division, certain known liabilities as of October 24, 2025. Payment by us under such indemnification clauses is generally conditioned on the other party making a claim that is subject to challenge by us and dispute resolution procedures specified in the particular contract. Further, our obligations under these arrangements may be limited in terms of time and/or amount, and in some instances, we may have recourse against third parties for certain payments made by us. It is not possible to predict the maximum potential number of future payments under these indemnification agreements due to the conditional nature of our obligations and the unique facts of each particular agreement. Historically, payments made by us under these agreements have not been material. As of March 31, 2026, we were not aware of any indemnification agreements that would or are reasonably expected to have a current or future material adverse impact on our financial position, results of operations or cash flows.

Previous wording

As of September 30, 2025 and December 31, 2024, we had outstanding approximately $2,645 and $2,990, respectively, 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.

Current wording

As of March 31, 2026 and December 31, 2025, we had outstanding approximately $2,645 of letters of credit, 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 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 of $20,640 and $37,967 as of September 30, 2025 and December 31, 2024, respectively, and corresponding escrow funds in holding of the same amount. While 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), the subsidiary of ours 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 of $38,435 and $36,283 as of March 31, 2026 and December 31, 2025, respectively, and corresponding escrow funds in holding of the same amount. While 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), the subsidiary of ours remains contingently liable for the disposition of these deposits.

Previous wording

There are no material changes from the Legislation and Regulation section set forth in Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” of our 2024 Annual Report.

Current wording

There are no material changes from the Legislation, Regulation, Taxation and Litigation section set forth in Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” of our 2025 Annual Report.

Previous wording

In addition to historical information, this report contains “forward-looking statements” within the meaning of the federal securities law. Forward-looking statements include information relating to our intent, belief or current expectations, primarily with respect to, but not limited to, economic outlook, capital expenditures, cost reduction, cash flows, operating performance, growth expectations, competition, legislation and regulations, litigation, and related industry developments (including trends affecting our business, financial condition and results of operations).

Current wording

In addition to historical information, this Form 10-Q contains “forward-looking statements” within the meaning of the federal securities law. Forward-looking statements include information relating to our intent, belief or current expectations, primarily with respect to, but not limited to, economic outlook, capital expenditures, cost reduction, cash flows, operating performance, growth expectations, competition, legislation and regulations, litigation, and related industry developments (including trends affecting our business, financial condition and results of operations).

Previous wording

•general economic and market conditions and any changes therein, including due to macroeconomic conditions, interest rate fluctuations, inflation, acts of war and terrorism or otherwise,

Current wording

•general economic and market conditions and any changes therein, including due to macroeconomic conditions, interest rate fluctuations, inflation, geopolitical instability, acts of war and terrorism or otherwise;

Previous wording

•litigation risks, the costs associated with, and the outcome of, litigation and other proceedings to the extent uninsured, including litigation or other claims against companies we invest in or acquire,

Current wording

•litigation risks, the costs associated with, and the outcome of, litigation and other proceedings to the extent uninsured, including litigation or other claims against companies we invest in, conduct business with or acquire;

Previous 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,

Current 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; and